Electrocomponents Half-year Report Good revenue growth in uncertain market

Electrocomponents (LON: ECM) have provided Half-year Report for the year ended the 30th September 2019.

Growth driven by market share gains

· Revenue growth of 7.3%, like-for-like up 4.5%, driven by strong market share gains

· Continued outperformance from RS PRO with like-for-like revenue growth of 9.7%

· Further improvements made to our offer – electronics franchise expansion, value-added solutions, OKdo

· Another step towards best-in-class customer experience – Group Net Promoter Score (NPS)4 rose 4.2% to 54.7

Increasing investment to improve offer and drive scalability

· Good progress on strategic initiatives in technology and supply chain which will drive growth and higher returns

· Gross margin of 43.7%, down 0.7 pts in line with guidance, primarily impacted by product mix and OKdo

· Adjusted operating profit margin down 0.6 pts due to gross margin reduction and increased strategic investment

· Profit before tax (PBT) fell 4.3% due to British Steel asset write-downs; adjusted PBT down 0.4% like-for-like

Growth in interim dividend supported by strong balance sheet

· Adjusted EPS up 3.5%, down 0.6% on a like-for-like basis; EPS down 4.4%

· 11.3% growth in interim dividend, in line with policy

· Strong balance sheet with net debt to adjusted EBITDA of 0.9x

Current Trading

Over the first six weeks of H2 we have continued to outperform, delivering modest growth despite weakness in some of our key underlying markets. We saw market share gains in Industrial and strong growth in RS PRO, which were largely offset by ongoing softness in Electronics. We are continuing to invest for the longer term in supply chain and technology to drive further differentiation and share gains, while accelerating cost actions to support near-term performance. We remain well positioned to deliver good progress.

PETER JOHNSON, ELECTROCOMPONENTS PLC CHAIR, COMMENTED:

“In recent years our executive management team of Lindsley Ruth and David Egan have brought together a strong leadership team, who are executing well on a clear strategy. The first half saw good revenue growth and strong market share gains in spite of an uncertain market backdrop. We will continue to drive share and actively manage our operating costs while increasing investment in strategic initiatives to position the business for the significant longer-term market opportunity.”