Electrocomponents has reported a sharp 14% decline in revenues for April and May as the impact of COVID-19 begins to bite.
The company has posted revenues of £1.95 billion, year ending March 31 2020, up 3.7% from £1.88 billion in 2019.
Operating profit edged ahead 2.1% to £205.3 million.
The company says demand levels have been negatively impacted as the COVID-19 lockdown measures became more extensive across key markets.
EMEA revenues have fallen 18%, with Northern Europe declining 19%. The Americas saw a like-for-like decline of 10%. A more optimistic picture emerges in Asia/Pacific where sales dipped just 2%.
Revenue decline has eased slightly as lockdown measures are lifted in some of the company’s key markets.
The supply side of the business remains robust and tightly managed with all of the company’s distribution centres (DCs) open and operating effectively.
Comments Lindsley Ruth (pictured), Electrocomponents Chief Executive Officer, “Electrocomponents delivered a strong performance in the year ended 31 March 2020 against an uncertain market backdrop and the impacts of the COVID-19 pandemic which started to impact trading volumes towards the end of the year. During the current crisis our focus has been to safeguard the health and wellbeing of our employees, support our communities and continue to provide a reliable service to customers and suppliers, including many operating in critical industries.
We face this new challenge with a robust balance sheet and a clear Destination 2025 strategy. Our digital leadership, global distribution network and highly committed team differentiate us. We are taking tactical action to protect profit and conserve cash, while also accelerating key strategic initiatives to drive scale and efficiency to ensure we come out of this crisis strongly and well positioned for long-term value creation.”
A strong contributor to the full year results was own brand business RS Pro which posted year on year revenue growth of 8.9%.
Group gross margin was 43.7%, down 0.8 points due to product mix and the launch and growth of OKdo, the Group’s single board computer business.
The company says it is well positioned for future opportunities and market share gains.
It has made strong progress on its Destination 2025 strategy to drive sustained growth and higher returns longer term alongside technology upgrades and a distribution centre expansion programme.