Premier Farnell hails overseas progress

TECHNOLOGY products distributor Premier Farnell witnessed increased momentum in America and growth in Asia during its third quarter.

In an interim management statement for the period from August 4 to November 13, the group said that sales grew 2.7%% year-on-year which was also helped by a “robust performance” in Europe.

But it’s presence in the UK market was impacted by increased competition and it now expects that its full year operating margin will be “slightly below prior year levels”.

The company has now put a new “web platform” in place in Europe as it looks to achieve further growth.

Chief executive Laurence Bain said: “We made good progress in the execution of our strategy in the third quarter with underlying sales growth from element14 up 3.7% year on year.

“Gross margin declined 0.5% points reflecting softer market conditions in Asia and Europe as well as the mix of business during the quarter.

“Whilst we expect gross margin to increase in the fourth quarter, we now anticipate that the impact of a softer trading environment and lower gross margin for the year will result in full year operating margin slightly below prior year levels.

“Following the completion of the planned strategic investments over the
remainder of this year and the global reorganisation of our element14
distribution business, the Group will be well positioned to accelerate its
top-line growth and deliver profitability in line with our targeted operating margin range of 10% to 12% through-the-cycle.”