Web and globalisation strategy working for Premier Farnell

ANOTHER quarter, another strong set of results from Leeds-based manufacturer Premier Farnell.

The electronic compenents distributor reported a 12.4% increase in like-for-like profit before tax (excluding gains on the purchase and cancellation of preference shares) from £16.3m to £18.1m for the three months ended August 3.

Revenue also rose by 5% from £178.9m in the same quarter last year to £195.8m.

The company sells products ranging from batteries to microchips and supports millions of engineers and purchasing professionals globally through its distribution network.

It attributed its continuing success in a difficult market to investment in its strategy of “differentiation”, which includes focusing on higher growth opportunities in electronic design engineering (EDE), the web and internationalisation.

EDE centric product sales in Asia are up by more than 17% year-on-year as the with EDE now accounting for 50% of China’s total sales.

The group has continued to expand its global technology centres, which provide round the clock design support, and in Q2 added 15,000 lines of new product to its portfolio.

Premier’s web business has also performed well with web purchases now accounting more than 30% of MDD sales globally.

Web sales growth is evident across the business with Newark up 42% on the prior year, and 30% of China’s sales now coming via the website, which is fully translated into Mandarin.

During the quarter Premier officially launched its new Indian website and implemented a multi-language search facility in Poland. It will shortly launch a new website in Slovenia with more East European developments planned.

Harriet Green, Premier’s group chief executive, said that the manufacturer was “evolving” as all elements in its strategy became further embedded in its business.

“We have seen progress in the quarter as the execution of our strategy – focused on the electronic design engineering segment, the web and internationalisation – continues to differentiate us in the industry,” she said.

“The success we have seen in higher growth markets and in providing customers with the value they demand encourages us to invest further. This, combined with our operational execution leads the board to anticipate further progress in the second half in line with its expectations.”