Premier Farnell plc 14 June 2012
Results for the First Quarter of the 53 week Period Ending 3
February 2013
Key Financials £m Q1 12/13 Q1 11/12 Q1
Continuing operations £m £m Growth (a)
(unaudited)
Total revenue 241.0 252.5 -5.0%
Adjusted operating profit (b) 26.0 28.5 -8.6%
Restructuring costs / gain on (7.5) 17.8
business disposal (b)
Total operating profit 18.5 46.3 -60.2%
Adjusted profit before tax (b) 20.9 24.1 -13.3%
Total profit before taxation 13.4 41.9 -68.0%
Adjusted earnings per share (b) 4.1p 4.7p -12.8%
Basic earnings per share 2.6p 8.9p -70.8%
Free cash flow (c) 21.8 6.6 230.3%
Sales per day maintained at stable levels since Q3 last year;
continued focus on margin and costs
Financial highlights
- Continued delivery of industry leading return on sales with first
quarter at 10.8% (2011/12: 11.3%), and underlying operating profit for the
quarter of £26.0m (2011/12: £28.5m).
- Stability in sales per day (SPD) maintained for the third
consecutive quarter, despite contracting markets, resulting in a year on year
decline of 5.0% in the quarter against strong comparator growth of 8.3% last
year.
- Both Europe and Asia Pacific showed strong sequential growth of
2.1% and 8.5%, respectively with Asia Pacific returning to year on year
growth. North America was 2.7% lower, sequentially, as we continued our
strategic transformation away from commodity MRO.
- Following investment in our high service proposition, first
quarter gross margin increased by 0.7% on the fourth quarter to 39.8%
(2011/12: 40.7%) and above our long term average.
- Overhead costs for the first quarter were 29.0% of sales
(2011/12: 29.4%) representing a year on year reduction of £4.3m, with focus on
cost efficiency through the remainder of the year.
- Operating cash flow conversion in the quarter was strong at
116.5%(e) (2011/12: 61.1%) giving free cash flow of £21.8m for the quarter
reducing net debt to £212.3m (Q4 2011/12: £237.1m).
Strategic highlights
- Global MDD eCommerce penetration increased by 2.4 percentage
points year on year to 56.1%.
- Continued progress as a digital enterprise, with 2.7m visits in
the quarter to our element14 community as it played an important role in the
global launch of Raspberry Pi which will add in excess of 60,000 new customers
for the second quarter.
- Continued growth in our active customer base of 2.1% in the first
quarter.
- International growth markets contributed 23.2% of total sales
within which first quarter sales to our emerging markets increased by 6.5%
year on year giving three year compound growth of 48.0%.
- Following the launch in Q3 of version six of CadSoft EAGLE, our
design engineering software, CadSoft product sales increased by 95.4% year on
year in the first quarter.
- Our new multi-lingual, pan-European outbound
telesales call centre in Krakow, Poland, is on track for a phased launch
following its opening on 28th May. As previously announced, £7.5m of
exceptional costs, principally in relation to this project, were incurred in
the quarter and will be recovered over a 3-4 year payback period.
- On 24th May the Group announced the resignation
of Harriet Green after six years as Chief Executive Officer and the
appointment of Laurence Bain. Laurence joined the Company in 2002 and has been
Chief Operating Officer since July 2002. He has played a key role in the
development and delivery of the Group's strategy.
Commenting on the results, Laurence Bain, Group
Chief Executive, said:
`'Global quarterly sales per day have been
maintained at a stable level since the decline in the global electronics and
technology markets that impacted us in June last year. In the first quarter we
saw sequential growth in both Europe and Asia Pacific and a reduction in the
Americas as that business continues its progression from commodity to
strategic MRO and EDE. Although at this stage of the cycle EDE markets remain
challenging, MRO sales per day continued to progress on a year on year basis.
Sales in May were stable against Q1 resulting in an improved year
on year performance of -2.4%. We continue to manage costs carefully and
maintain gross margin stability whilst investing in support of our strategy
and our people. As comparators become easier from the middle of the year and
with the benefit of a 53rd week we expect growth to return in the second half.
However as we have limited forward visibility and in light of the economic
outlook we remain cautious.
With continued focus on providing great service to the engineering
community, our multichannel strategy, led by the web and growth in emerging
markets, I believe that the Group will go from strength to strength.''
