Electrocomponents will stockpile £30 million worth of inventory to protect RS Components against any potential impact from Brexit. The investment will cover fast-moving product lines in the UK and Europe.
The distributor added that it had applied for an Authorised Economic Operator accreditation, which will ensure reduced checks of its shipments crossing the UK-EU border, and that it may need to change product sourcing and supply routes to deal with additional Brexit-related tariff and duty costs.
“Based on our assessments we believe that over time the vast majority of inventory needed to meet our EU customer needs could be sourced and retained directly within the EU post the UK’s exit,” the company said.
The announcement was made alongside a sparkling H1 performance which saw revenues climb 10.7% to £911.8m and profit before tax rocket 26.8% to £100.2m.
Digital like-for-like revenue growth has risen 9.7% and RS Pro like-for-like revenue growth has accelerated 2.2%.
Lindsley Ruth (pictured), Chief Executive Officer at Electrocomponents commented: “We are making progress on our journey to become first choice for customers, suppliers and employees and have delivered a good performance in the first half with strong like-for-like revenue growth, market share gains and improved profitability. Our teams worldwide are focused on delivering a best-in-class experience for customers and we believe the opportunity to drive continued market share gains and further improvement remains significant.
We have seen a good start to the second half of the year with around 7% like-for-like revenue growth in the first seven weeks of H2. While the external environment in some of our key markets is uncertain, we remain focused on driving organic performance, growing our market share in all three regions and managing our cost base. We aim to continue to augment organic growth with opportunistic value-accretive acquisitions as we drive continued consolidation in our large fragmented industry. We continue to be well positioned to make strong progress in the current financial year.”