Premier Farnell’s profits fall despite growth in fourth quarter
PREMIER Farnell, the Leeds-based electronics component firm, has seen its underlying pretax profit fall 24% from £72.5m to £54.8m over the past year.
But the company said in its results for the financial year to the end of January 2010 that it has returned to growth in the fourth quarter.
Premier Farnell said that sales and underlying operating profit grew by 6% and 3.3% respectively in the fourth quarter compared with the year before.
For the full year, revenue dropped by 10% to £795.3m.
It specialises in distributing items like batteries and microchips to companies like Phillips, Nokia and Microsoft.
The company has also seen its sales in America increase over the past eight successive months while its sales in Europe are also up 11.4% over the last quarter.
It also saw growth of 76.4% in China and 70.3% in India over the last quarter.
The board has also recommended that a final dividend of 5.2p be paid per share – which is unchanged from last time.
Harriet Green, chief executive, said: “Group sales and underlying group operating profit both returned to year on year growth during the fourth quarter.
“Our return on sales increased by over one percentage point on the third quarter, the second consecutive quarter of sequential improvement, and January group sales saw a significant increase in momentum.
“As we moved into the first quarter, which is seasonally our strongest, this performance accelerated, with Group sales growing over 15%
in February on the prior year.
“The margin enhancing characteristics of our strategy and the value our customers attribute to our high service proposition has delivered a one
percentage point improvement in our gross margin, over the prior year.
“This reflects the seventeenth consecutive quarter of gross margin stability, a true differentiator in our industry.
“Our performance over the last three years has demonstrated the strength of the assumptions which underpin our strategy.
“We will continue to focus on execution and driving our performance towards reaching the level of
sales we saw before entering the downturn, while recognising the limited visibility inherent in our business.
“With the resilience of our business and
the strength of our strategy, the board remains confident in investing for our
future as we capitalise on the opportunities within our markets and grow our
business profitably.”
