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Electrocomponents has reported 13% revenue growth in Q1 2017 as the distributor continues its progress under CEO Lindsley Ruth. All regions saw double-digit underlying revenue growth. During Q1 the company says it saw a three percentage point headwind from fewer trading days, as such constant currency revenue growth, not adjusted for trading days, was closer to 10%.
Also announced is a consolidation of Electrocomponents Oxford-based head office and its London-based digital operations into a single head office and digital hub in London Kings Cross. This will lead to an exceptional charge of around £4m in the first half of the year to March 2018.
The acceleration in Q1 revenue growth has been driven by an increase in growth in Europe and Asia. Asia and the Americas in particular, have seen strong double-digit growth against a period of weak trading comparatives. Trading comparatives for all our regions will toughen as the year progresses.
eCommerce, which represents around 60% of revenues, saw revenue growth of around 13% in Q1, with growth accelerating on the back of the step-up in investment in digital marketing initiated in H2 2017.
RS Pro has also performed well delivering revenue growth of around 8% in Q1.
There will be no let up in the efficiency drive. The company remains on track to deliver the £5 million of additional net annualised cost savings in the current financial year, giving a cumulative total of £30 million of annualised savings by March 2018.
However, during the first half of 2018 it will see an annualisation of the increase in investment in areas such as digital, talent and RS Pro that was made during the second half of 2017 to drive faster growth.
Commented Ruth : “We have had an encouraging first quarter and while it remains early days, it is pleasing to see our focus on the customer, improved execution and increased sales effectiveness driving strong results across the business. Whilst the external macro environment remains uncertain, we have a strong platform and concrete transformation initiatives and we remain confident of delivering good progress in the current financial year.“