About the only bright spot in Electrocomponents full year results was a four per cent uptick in sales in the first seven weeks of the new financial year, though even that is tempered by a two per cent decline in the UK. International business is up six per cent helped an impressive 11 per cent sales surge in Europe and a decent four per cent increase in North America. Asia Pacific sales are down one per cent.
All eyes will now be on newly-appointed Group Chief Executive Lindsley Ruth. He will lay out his plans to return the company to growth in November this year.
Two immediate areas of concern will be gross margins which dipped 1.3%, partly due to currency fluctuations and the previously strong UK operation where contribution fell eight per cent on lower sales and lower margins.
Group pre-tax profit dropped five per cent YoY to £96.1m on sales up 3.5 per cent to £1.27bn.
Peter Johnson, Chairman didn’t hold back on the full year numbers.
“2015 financial performance was not good enough and something we are determined to improve. We are pleased to welcome Lindsley Ruth as our new Group Chief Executive and the Board will support him as he assesses what changes are needed to the strategy and its implementation in order to deliver a much improved performance going forward.”
Operational success include a six per cent increase in eCommerce sales, where share now represents 59% of total Group sales and the completion of the company’s SAP-based IT system global roll-out in Japan.
Last word goes to the new CEO.
“I was delighted to be appointed as Chief Executive of the Group,” said Lindsley Ruth. “I believe strongly in the business model, but there remains much to do and these results demonstrate the challenges we face. We have strong brands, good geographical reach and market-leading positions. I have been impressed by the quality and attitude of the people within the business and I am excited about working with them to make the most of the significant potential within the business. “My immediate focus is to reduce complexity, increase accountability and accelerate the pace of change to drive faster growth and improved shareholder returns.”
In a separate announcement Electrocomponents said Simon Boddie, Group Finance Director would be leaving the company.
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