Performance lights the way for Premier Farnell

ELECTRONIC components distributor Premier Farnell today said its business strategy was working as it posted improved annual performance.

Leeds-based Premier Farnell saw pre-tax profits increase from £62.3m to £71.2m for the year ended February 3 on the back of increased revenues of 5% to £744.7m.

Chief executive Harriett Green said performance over the fourth quarter of the financial year had seen record sales per day growth achieved by Premier, which supports millions of engineers and purchasing professionals globally through its distribution network.

Ms Green said: “This reflects the benefits of the strategy, announced a year ago, to focus on the EDE (electronic design engineers) segment, the web and the internationalisation of our high service business model.

“The fourth quarter saw good progress in all aspects of the strategy and, when combined with the continued gross margin stability and cost focus, led to a full year reported pre-tax profit improvement of 14%, despite the impact of exchange rates.

“We have made a good start to the new financial year and have carried the momentum from the fourth quarter into the first quarter.

“The proposed dividend increase reflects the board's confidence in our strategy, the increasing benefits that the strategy is bringing to the group and confidence in the global opportunities on which Premier Farnell continues to capitalise.”

The company, which sells products ranging from batteries to microchips, said it had achieved double digit sales growth in Europe for the second year as well as developing its plans to develop further afield.

In January, Premier bought the assets and goodwill of Hynetic Electronics Private, based in India. Premier said Hynetic would carry on trading as an existing authorised distibutor of Premier's products in India following the deal. Sales in China were up 23% in the fourth quarter.

Premier said it was receiving web orders in Europe for its products every 10 seconds and had added 88,000 stocked products, and a further 55,000 on-demand, to its portfolio. Premier said this emphasised its committment to meeting the needs of electronic design engineers, who give company bosses advice on what they need to order.

Premier has increased its final dividend by 4% to 5.2p per share, to give a full year dividend of 9.2p per share, the first increase in 10 years.