Electrocomponents PLC Trading update (7301B)
April 06 2017 - 2:00AM
UK Regulatory
TIDMECM
RNS Number : 7301B
Electrocomponents PLC
06 April 2017
Electrocomponents plc today issues a trading update for the year
ended 31 March 2017, ahead of publishing full-year results on 23
May 2017.
Revenue growth(1)
Region Quarter to Mar Year to Mar
2017 2017
Northern Europe 5% 5%
Southern Europe 5% 4%
Central Europe 6% 2%
------------------- --------------- ------------
Total Europe 5% 4%
Asia and Emerging
Markets 9% 4%
North America 16% 7%
Group 8% 5%
We have continued to make strong progress in the final quarter
of the year. As a consequence we expect our results for the full
year ended 31 March 2017 to be ahead of our previous expectations,
with headline profit before tax ahead of the current market
consensus range(2) .
-- Q4 revenue growth accelerated to 8% leading to revenue growth of 5% for the full year.
o Our end markets remain strong and the business is executing
well, as we continue to improve our go-to-market approach and sales
effectiveness. Revenues in the quarter have also benefitted from a
more favourable competitive environment in the quarter.
o The acceleration in Q4 revenue growth has been driven by a
strong recovery in growth in North America and Asia Pacific, and
continued robust growth in Europe.
o RS Pro, our own-brand business, which accounts for around 12%
of revenues saw revenue growth of around 5% in Q4.
o eCommerce, which represents around 60% of revenues saw revenue
growth of around 8% in Q4, broadly in line with the Group growth
rate.
-- We expect a similar year-on-year percentage point improvement
in the full-year gross margin to that seen in the first-half gross
margin. During the final quarter our own actions on price and
discount discipline and foreign exchange benefits have offset an
unfavourable geographic mix, which relates to faster growth in our
lower gross margin North American hub.
-- We continue to make good progress on our cost initiatives and
are on track to deliver GBP18 million of net savings in the year to
March 2017. However, strong revenue momentum and share price
appreciation will lead to higher employee-related incentive costs
in the year.
-- As we look into 2018, we are also using the strong growth
momentum as an opportunity to invest in talent and innovation to
drive faster growth in the business in the medium term.
-- FY 2017 revenue and profits have seen a significant benefit
from foreign exchange(3) and additional trading days(4) . As
previously guided, in FY 2018 we expect to see an adverse impact on
revenues and profits from fewer trading days compared with FY
2017(4) .
Enquiries:
David Egan Group Finance Director 01865 204000
Polly Elvin Investor Relations and Corporate PR 01865 207427
David Allchurch / Martin Robinson Tulchan Communications 020 7353 4200
Notes:
(1) Revenue growth rates, unless otherwise stated, are adjusted
for trading days and currency movements ("underlying sales
growth").
(2) The market consensus range for headline PBT for the year to
March 2017 is GBP122.3 million to GBP124.2 million. This range only
includes estimates from analysts that have updated forecasts since
our latest trading update on 10 February 2017.
(3) Our profits remain sensitive to movements in exchange rates
on translation of overseas profits. Positive currency movements
increased H1 profit before tax by around GBP7 million and we expect
them to increase full-year profit before tax by around GBP18
million. Every 1 cent movement in the Euro will have a GBP1.0
million impact on profits. Every 1 cent movement in US $ will have
a GBP0.3 million impact on profits.
(4) During the year to March 2017 we expect to see around GBP10
million benefit to revenues from additional trading days compared
with FY 2016. In the year to March 2018 we expect to see an adverse
impact of around GBP20 million on revenues from fewer trading days
compared with the year to March 2017.
Electrocomponents plc - Conference Call Dial
in Instructions
Date: Thursday 6 April
UK Time: 08.00h call
Telephone number: +44 (0) 1452 55 55 66
PIN: 97347958
Chairman: Lindsley Ruth
Electrocomponents plc - Replay Dial in Instructions
(available until 13 April 2017 at 10.30h)
Telephone number: +44 (0) 1452 55 00 00
PIN: 97347958
LEI: 549300KVXDURRKVW7R37
This information is provided by RNS
The company news service from the London Stock Exchange
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