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Premier Farnell Reports Q4

Financial Highlights

  • Sales momentum from the prior quarter has continued as we delivered our highest fourth quarter sales for more than 10 years. Group sales grew 13.9% year on year and 2.0% sequentially on the prior quarter, leading to full year sales growth of 21.4%.
  • Fourth quarter Group operating profit grew 31.6% year on year to reach the highest level for more than 10 years. Full year Group underlying operating profit grew 48.1%, led by MDD Americas where full year operating profit grew 129.9% year on year.
  • In the fourth quarter our MDD division had its strongest absolute sales per day performance for the year, as sales in Europe, North America and Asia Pacific grew 23.0%, 11.0% and 12.4%, respectively, year on year.
  • Gross margin in the fourth quarter improved again, up 1.5 percentage points year on year and 0.7 percentage points on the prior quarter to 41.8%. This is the ninth consecutive quarter of sequential improvement.
  • The Group’s fourth quarter return on sales was 11.7%, up 1.2 percentage points year on year.
  • Our global MDD division delivered a fourth quarter return on sales of 13.1%, led by the improvement in MDD Americas as the division delivered a fourth quarter return on sales of 9.0%.
  • Group cash performance has remained strong, with full year underlying cash flow conversion at 91.7%.
  • The Board has recommended a final dividend of 6.0 pence per share, an increase of 15.4% on the prior year. This leads to a proposed full year dividend of 10.4 pence per share, a year on year increase of 10.6%.
  • Strategic Highlights

  • In the fourth quarter our MDD active customer base grew 5.9% year on year.
  • eCommerce accounted for 51.1% of MDD sales in the fourth quarter, the first time over half of MDD sales have come via e-channels. Progress has continued in the new year, with eCommerce sales in Europe currently running at over 70%.
  • Emerging markets of Greater China, India and Eastern Europe delivered strong sales growth in the fourth quarter of 39.8%, 74.0% and 51.2%, respectively.
  • Full year EDE year on year sales growth of 38.3% has contributed to our EDE sales penetration level reaching 53.7% – which is within our target range of 50%-70%.
  • In the year we signed 43 supplier agreements, including new partnerships with three engineering services and software organisations, and added 72,500 new EDE products.
  • We have begun to build a holistic EDE ecosystem proposition as we partnered with our first specialist prototyping partner, Pentalogix, and made the initial launch of our new rapid prototyping service.
  • The element14 community saw close to half-a-million customers visit the site in the fourth quarter. Commenting on the results, Harriet Green, Group Chief Executive, said: “We have delivered the highest level in Group sales and operating profit for the fourth quarter for more than 10 years, with year on year growth of 13.9% and 31.6%, respectively, despite the tougher comparators. Sequentially sales grew 2.0% over the prior quarter which is counter seasonal for our business. Our focus on driving market share gains and the strength of our proven global strategy underpins this acceleration in our quarterly sales performance.

    “This sales momentum from the fourth quarter has continued into the new financial year. The month of February saw the two highest day’s sales ever recorded within our European business and for the Group sales grew 8.0% year on year. This level of growth is despite the weather disruption in the US that continued from January into February and after adjusting for the impact of the TPC Wire and Cable disposal. The extent of the disruption to the electronics supply chain caused by the recent environmental disasters in Japan is not yet fully understood. However, the Group’s Japanese customer base and direct supply chain are very small, and it is clear that Premier Farnell’s significant inventory and support to all its customers and suppliers will be invaluable at this time.

    “The strength of the Group’s performance in financial year 2011 together with this positive start to the new year, underpins the Board’s decision to raise the proposed final dividend per share by 15.4%. Through driving further market share gains and the continued execution of our strategy the Group is well positioned to deliver sales growth in the new financial year that is in excess of our targeted level of sales growth.”

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