Electrocomponents Plc delivered a good performance with strong like-for-like revenue growth

Electrocomponents PLC

Electrocomponents Plc (LON:ECM), today announced results for the first half ended 30 September 2018

Highlights

H1 2019

H1 2018

Change

Like-for-likechange

Revenue

£911.8m

£823.8m

10.7%

9.8%

Adjusted2 operating profit

£104.0m

£81.2m

28.1%

25.9%

Adjusted2 operating profit margin

11.4%

9.9%

1.5 pts

1.4 pts

Adjusted2 profit before tax3

£100.2m

£79.0m

26.8%

24.9%

Adjusted2 earnings per share

17.2p

13.0p

32.3%

30.5%

Adjusted2 free cash flow

£34.0m

£17.4m

95.4%

Net debt

£139.0m

£124.5m

Net debt to adjusted2 EBITDA

0.6x

0.7x

Interim dividend

5.3p

5.25p

Profit before tax

£93.0m

£75.7m

22.9%

Earnings per share

15.9p

12.4p

28.2%

Continued focus on customer driving market share gains

· Revenue growth of 10.7%, like-for-like revenue growth of 9.8%, with market share gains in all three regions

· Digital like-for-like revenue growth of 9.7% and an acceleration in RS Pro like-for-like revenue growth to 12.2%

· Strong double-digit revenue growth and initial contribution from IESA with encouraging new contract wins

· Driving best-in-class customer experience – Group (ex IESA) Net Promoter Score4 up 3.8% to 52.5

Profitability improvement

· Gross margin rose 1.0 percentage point to 44.4%, up 0.7 pts on a like-for-like basis, 0.3 pts of accretion from IESA

· Revenue growth and cost control increased adjusted operating profit conversion ratio to 25.7% (H1 2018: 22.7%)

· Adjusted operating profit margin rose to 11.4% (H1 2018: 9.9%), with improvement in all three regions

· PBT up 22.9% and adjusted PBT up 24.9% on a like-for-like basis

Growth in EPS and interim dividend

· EPS of 15.9p up 28.2%; adjusted EPS up 30.5% on a like-for-like basis

· Adjusted free cash flow of £34.0 million up 95.4%; net debt to adjusted EBITDA of 0.6x (H1 2018: 0.7x)

· Interim dividend of 5.3p (2018: 5.25p); 40% of 2018 full-year dividend in line with policy

Update on Performance Improvement Plan Phase II

· Introduction of new simpler regional structure driving a more agile, scalable and customer-centric organisation

· Progress on global shared services and automation strategy; regional centre of excellence opened in China

· On track to deliver total annualised savings of £12 million by 31 March 2021, and £4 million by 31 March 2019

LINDSLEY RUTH, ELECTROCOMPONENTS CHIEF EXECUTIVE OFFICER, COMMENTED:

“We are making progress on our journey to become first choice for customers, suppliers and employees and have delivered a good performance in the first half with strong like-for-like revenue growth, market share gains and improved profitability. Our teams worldwide are focused on delivering a best-in-class experience for customers and we believe the opportunity to drive continued market share gains and further improvement remains significant.

We have seen a good start to the second half of the year with around 7% like-for-like revenue growth in the first seven weeks of H2. While the external environment in some of our key markets is uncertain, we remain focused on driving organic performance, growing our market share in all three regions and managing our cost base. We aim to continue to augment organic growth with opportunistic value-accretive acquisitions as we drive continued consolidation in our large fragmented industry. We continue to be well positioned to make strong progress in the current financial year.”

 

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