The board of Electrocomponents must be congratulating themselves. The appointment of Lindsley Ruth two years ago now looks as inspired as Chelsea’s hiring of Antonio Conte (though unlike Millwall’s Neil Harris he hasn’t won at Wembley – yet).
The parent company of RS Components and Allied Electronics has delivered on all fronts. Group revenue has increased by 4.8% on an underlying basis and 17.1% on a reported basis to £1,511.7m up from £1,291m in 2016. Operating profit grew a giddy 229.9% to £132.3m while operating margins leapt 1.8 percentage points.
The crucial eCommerce revenues, which represent 60.2% of total revenues, grew in line with the Group on an underlying basis with 4.9% revenue growth in the full year and an acceleration in H2 to 7.5%.
All regions contributed to this progress. The company reported market share gains in north Europe and north America, and the previously underperforming Asia/Pacific business reported revenue growth and a halving of losses.
In addition £18m worth of savings were delivered in 2017 and this puts the company well on track to hit is £30m cumulative annualised target by March 2018
During 2017, it was pleasing to see positive revenue trends in all our five regional hubs, with each region seeing underlying revenue growth rates improve during H2, delivering Group H2 revenue growth of 7.5% (H1 2017: 2.1%).
The current trading year is keeping pace. Revenue momentum has continued in the first seven weeks with all regions contributing.
Lindsley Ruth (pictured), Chief Executive Officer commented: “Over the last two years, we have significantly strengthened our leadership and begun to refocus the business back on what lies at its heart, the customer and the supplier. ‘Getting the basics right’ is now delivering strong top line growth, stable gross margins, improved efficiency, and significant growth in profits and cash flow. With a stronger balance sheet, we are pleased to return to growing our dividend. We have taken a major step forward.
From this stronger platform we are focused on the next step change in the performance of this organisation. Having reconfirmed our strategic priorities and identified concrete transformation initiatives to drive future performance, we remain excited about the significant potential for further improvement and growth.”