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UPDATE 1-Electrocomponents cautions on tough FY trading comparatives despite strong first-half
November 14, 2017 / 9:47 AM / 7 days ago

UPDATE 1-Electrocomponents cautions on tough FY trading comparatives despite strong first-half

(Adds details, background, shares)

Nov 14 (Reuters) - Electrocomponents Plc reported a 43.4 percent jump in first-half profit, but cautioned that trading comparatives will toughen as the year progresses.

Shares of the company, UK’s largest industrial distribution company, were down about 2 percent in morning trading.

Electrocomponents said it was on track to deliver stable gross margins in the full year ending March 31, but cautioned that the second-half number would have tougher comparatives as the year ago period included a benefit from foreign exchange.

Margins improved 0.6 percentage points to 43.4 percent in the first half of the year, helped partly by pricing changes, and lower discounting.

The company, which has been looking to cut costs, also said it remained on track to deliver annualised net cost savings of 30 million pounds ($39.33 million) by March 2018.

Electrocomponents’ headline profit before tax rose to 79 million pounds for the six months ended Sept. 30, from 55.1 million pounds in the same period last year.

The company said it would raise its interim dividend by 5 percent to 5.25 pence per share.

Revenue rose 16.4 percent to 823.8 million pounds, driven by growth across all its regions, particularly the United States. ($1 = 0.7628 pounds) (Reporting by Hanna Paul and Sanjeeban Sarkar in Bengaluru; editing by Patrick Graham and Sunil Nair)

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