The financials are grim, the decision-making at least on the right track. Premier Farnell’s results coincided with a second profit warning in two months. First half pre-tax profits have tanked 16% to £30.6m.
What Interim Chief Executive Officer Mark Whiteling describes as, “the slowing momentum seen in the second quarter has continued in the start of the seasonally weaker second half.”
“Accordingly,” he says, “we now anticipate second half operating profit performance to be lower than previous expectations, with full year adjusted operating profit now expected to be in the range of £73m to £77m.”
First half revenue at Premier Farnell rose 4% to £498.6m.
An operations review has already begun. Two quick decisions have been made. Akron Brass, a fire fighting equipment maker, which has to be a distraction for an electronic component seller, will be sold. And a direct operation in Brazil, where the economy is struggling, will be closed down.
“The review announced in July is progressing rapidly,” commented Premier Farnell Chairman Val Gooding. “The review has highlighted the extent of change in the business that is necessary to allow it to compete effectively in an increasingly digital market. Further work is required to determine the scale, timing, benefits and costs involved, and the Board expects to be in a position to provide this information at the time of its Q3 trading update in December 2015.”
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