Premier Farnell’s half year numbers do not suggest a full-blooded recovery is under way in the distribution sector.
Revenues edged ahead 0.9% to £479.2m. Total profit was up 8.2% to £47.7m helped by a one-off restructuring charge. Adjusted profits show an 8.6% profit slide to £47.5m.
Raspberry Pi sales provided the revenues booster. Excluding sales of the $25 computer board revenues were down 1.4% in what the company describes as “subdued marketing conditions.”
Europe, Asia/Pacific and emerging markets all grew revenues, offsetting weakness in the north America and UK markets.
The good news is that the company grew its active customer base by 2.7% in the first half, and development tools sales delivered a cracking 42% sales increase year on year. It says its element14 community now has 200,000 registered users globally.
Premier Farnell Chief Executive Officer Laurence Bain commented, “Our core business has delivered a stable performance overall despite the mixed conditions that have impacted some developed markets such as North America and the UK. Focus on optimising performance saw the Group’s industry leading operating margin improve from the levels experienced at the end of the prior year, making progress towards our targeted range.
Our customer-centric strategy has attracted more customers to our business and provides the Group with greater opportunity as market conditions improve. Progress in the Emerging Markets, where sales growth outpaced our target, exemplifies this approach. We continue to enrich our customer proposition through investments in inventory and our new web platform, making good progress through the first half this year in the execution of these plans which are driving record levels of customer satisfaction and service performance. We remain confident in our ability to implement our strategic vision.
Looking ahead to the second half, we continue to have limited forward order visibility and current market conditions remain variable. However, with our proposition benefitting from the first half inventory investments and initiatives taken to optimise business performance, we expect to continue to grow our active customer base, gain market share and drive financial performance.”