(Adds analyst comments, details)
July 24 Electronics products distributor
Electrocomponents Plc reported a bigger-than-expected
decline in gross margins, sending its shares down as much as 6.4
percent and making them one of the top percentage losers on the
London Stock Exchange.
The company, whose products range from cellphone accessories
to thermometers, said gross margins in the first quarter fell 80
basis points (bp), hurt by a stronger pound and increased
discounting in the UK and the Asia Pacific region.
"The group has guided to a 200bp medium-term decline (in
gross margin) but the scale of the Q1 deterioration is
surprising," Jefferies analyst Kean Marden said in a note.
The company, in its interim management statement on
Thursday, did not report a gross margin figure for the first
quarter. The company's annual report, released in May showed a
2014 gross margin of 45.9 percent.
UBS analysts also noted the company's estimate of a 4
million pound ($6.8 million) impact from the strong pound on
full-year headline pretax profit.
The analysts cut their 2015 adjusted pretax profit forecast
to 92 million pounds from 104 million pounds.
The company, which also makes the credit-card sized
minicomputer Raspberry Pi, gets about 70 percent of its total
revenue from markets outside the UK.
Underlying sales from its international business rose about
5 percent in the quarter. UK sales declined 2 percent.
The increase in underlying sales, adjusted for changes in
foreign exchange rates and one less trading day, was driven by
an 8 percent increase in sales in North America and the Asia
Pacific region. ID:nRSX1665Na]
Shares in the company, whose brands include RS Components
and Allied Electronics, were down 6.3 percent at 242.1 pence at
0900 GMT on Thursday after hitting 241.7 pence, the lowest in
just over a year.
($1 = 0.5878 British pounds)
($1 = 0.5879 British Pounds)
(Reporting by Noor Zainab Hussain and Abhiram Nandakumar;
Editing by Ted Kerr)