FIRST HALF HIGHLIGHTS
- Group H1 sales per day up 0.9% versus prior year. Sales excluding Raspberry Pi declined 1.4% as overall market conditions remain subdued.
- Excluding Raspberry Pi, year on year sales growth was stable through the period in our main MDD business as Continental Europe, Asia Pacific and Emerging Markets offset weakness in North America and the UK.
- Year on year sales growth trajectory in MDD Other and Industrial Products divisions slowed, primarily due to strong comparators last year.
- Activity levels across the period reflected normal seasonality.
- Operating margin improved through the period to 9.5% from adjusted Q4 levels of 9.2% reflecting initiatives to optimise business performance towards our targeted range.
- Gross margin of 37.7% was down 0.3 percentage points from the fourth quarter but stabilised through the period.
- Operating margin improvement came from management of costs and the benefit of the strategic efficiency actions taken at the end of the prior year.
- The Group has made further progress with key initiatives that underpin the three pillars of our strategy.
- Active customer base grew 2.7% (excluding benefit of Raspberry Pi).
- New web platform implemented in Canada with roll-out across North America underway.
- Investment in inventory continued in line with plans.
- Sales of development tools and kits which are critical to early stages of design grew 42.0% year on year.
- element14 Community now has 200,000 registered users globally.
- Cash performance reflected our planned investment in inventory to further support customers' requirements as well as investments in Raspberry Pi and inventory for Akron Brass following a major contract win in India.
- The Board has approved an interim dividend of 4.4p per share (2012/13: 4.4p).
Commenting on the results, Laurence Bain, Chief Executive Officer, said:
"Our core business has delivered a stable performance overall despite the mixed conditions that have impacted some developed markets such as North America and the UK. Focus on optimising performance saw the Group's industry leading operating margin improve from the levels experienced at the end of the prior year, making progress towards our targeted range.
Our customer-centric strategy has attracted more customers to our business and provides the Group with greater opportunity as market conditions improve. Progress in the Emerging Markets, where sales growth outpaced our target, exemplifies this approach. We continue to enrich our customer proposition through investments in inventory and our new web platform, making good progress through the first half this year in the execution of these plans which are driving record levels of customer satisfaction and service performance. We remain confident in our ability to implement our strategic vision.
Looking ahead to the second half, we continue to have limited forward order visibility and current market conditions remain variable.
However, with our proposition benefitting from the first half inventory investments and initiatives taken to optimise business performance, we expect to continue to grow our active customer base, gain market share and drive financial performance."
