Premier Farnell takes profits hit

ELECTRONIC components supplier Premier Farnell saw first half pre-tax profits cut by more than 50% as it felt the impact of restructuring costs and increasingly competitive markets.

The Leeds-based business recorded pre-tax profits of £31.8m as turnover fell 3.3% to £479.2m. Adjusted pre-tax profits – stripped out of restructuring costs – came in at £39.7m, down 15.7% on last year.

This year the company has seen both its chief executive and finance director leave, joining Thomas Cook and Whitbread respectively.

New chief executive Laurence Bain said:  `’In very challenging global markets we continue to show resilience and make strategic progress. At a global level we have now had four consecutive quarters of stable sales per day within a market that continued to decline. With our customer base increasing further in the second quarter and our year on year sales performance improving from Q1 to Q2 in Europe and the Americas – the business continues to perform well on a comparative basis.

“Despite the global markets remaining uncertain and with very limited forward order visibility, I am confident that the Group is well positioned to leverage opportunities in our target markets.

“In August we were encouraged by the return to year on year growth of 0.4%. We remain cautious, but by providing our customers with unparalleled service and with continued focus on optimising share gains, gross margin, costs and cash, and with easier comparators in addition to the benefit of a 53rd week we continue to expect growth to return in the second half.”

The company compared its performance favourably with data suggesting the industry had contracted more than 10% in the US and Europe.

Last week, Premier Farnell agreed a deal that will see the pioneering Raspberry Pi computer manufactured in the UK.