Financial highlights
- Group third quarter year on year sales per day decline of 1.6%, unchanged from the second quarter, reflecting less favourable market conditions overall in September and October compared with the slight growth experienced in August.
- Latest market conditions reported by the SIA(d) show declines of 9.4% in Europe and 0.4% in Asia Pacific, with the Americas reporting growth for the first time since June 2011 of 2.6%, and AFDEC(d) reported a decline of 11.1% in the UK.
- Third quarter gross margin of 38.3% was down 0.2% from the second quarter as we continue to manage in line with market conditions.
- Operating expenses in line with prior year, after adjusting for the impact of the Embest acquisition, as cost actions offset the impact of cost increases.
- £4m of annualised cost savings were implemented early in the fourth quarter with a resultant £0.8m saving expected this year. Depending on our sales trajectory through the fourth quarter, further cost actions will be taken if momentum does not improve.
- Our return on sales, at 9.4% for the third quarter and 10.1% for the first nine months, remains industry leading.
- Operating cash generation(e) (excluding impact of adjusting items) was in line with our expectations at 83.6% of operating profit for the quarter and 111.5% year to date (2011/12: 85.7%).
