Source - LSE Regulatory
RNS Number : 2087V
Electrocomponents PLC
13 April 2021
 

Electrocomponents plc today issues a trading update for the year ended 31 March 2021, ahead of publishing full-year results on 25 May 2021

 

LINDSLEY RUTH, CHIEF EXECUTIVE OFFICER, COMMENTED: "We are very pleased with another strong performance in the fourth quarter. The business demonstrated its resilience and agility once more, rising to the combined challenges of lockdown, Brexit and extreme weather conditions in Texas with trading not missing a beat; Group performance continued at a similar rate to the third quarter until mid-March. The last two weeks of the period saw a material improvement in revenue growth against weaker comparatives when most of EMEA entered the first COVID-19 lockdowns. We expect profit for the year ended 31 March 2021 to be around the top end of the consensus range(1).

 

The response of our people to the challenges faced this year has been exceptional and our outperformance continues to demonstrate the strength of our differentiated proposition which is resonating with both our customers and suppliers, delivering market share gains and deeper customer relationships. However, we remain highly mindful of the external pressures such as continuing freight inflation, COVID-19 uncertainties, translation headwind from sterling's strength, Brexit and ongoing unwinding of weak comparatives, but also excited about the trading opportunities we see. Looking forward to the year ahead, we are well positioned to deliver ongoing growth in line with expectations through continued organic and strategic investment, whilst operational efficiencies will drive margins as we continue on our Destination 2025 journey."

 

Like -for-like revenue growth(2)

Region

Q3 to Dec 2020

Q4 to Mar 2021

 

Year to Mar 2021

EMEA

8%

12%

 

1%

Americas

9%

13%

 

1%

Asia Pacific

10%

12%

 

5%

Group

8%

12%

 

1%

 

·      Strong revenue performance across Q4 with continued market share gains

Group Q4 like-for-like revenue growth of 12%, of which c. 4% benefit from weaker COVID-19 comparatives

Within EMEA, UK momentum improved from end of January, resulting in high single digit growth in Q4

Our other EMEA markets grew double digits due to tougher COVID-19 impacts in March 2020

Strong performance in the Americas, overcoming the negative impact from extreme weather in February

Growth in Asia Pacific underpinned by strong double-digit increase in Greater China

RS PRO revenue grew 18% like-for-like (c. 5% benefit from COVID-19 comparatives); full year up 10%

Digital like-for-like revenue grew 12% (c. 4% benefit from COVID-19 comparatives); web revenue rose 14%

 

·      Full year 2020/21 profit expected to be around the top end of the consensus range(1) following stronger end of year revenue growth

Second half gross margin likely to be lower than first half due to continuing cost pressures in freight, a regional mix effect and inventory provisions (including c. 100bp year-on-year hit from deflated PPE products)

Operating costs affected by ongoing COVID-19 related charges in freight and labour and a higher cost to serve post Brexit, accounting for additional c. £9 million in H2

RISE programme on track, delivering c. £7 million of operational savings this year

 

·      Cost pressures in 2021/22 include ongoing freight inflation, COVID-19 uncertainties, Brexit and translation impact of stronger sterling(3)

 

·      Continued focus on cash generation to support organic and inorganic strategic growth

Addition of John Liscombe Limited in February, the third acquisition this financial year

All acquisitions performing in line with expectations, with future cross-selling opportunities on track

Pipeline of strategic inorganic opportunities is strong, and we retain a rigorous focus on value creation

 

LEI: 549300KVXDURRKVWR37

 

Enquiries:

 

 

David Egan

Chief Financial Officer

020 7239 8400

Lucy Sharma

VP Investor Relations

020 7239 8427

Martin Robinson / Olivia Peters

Tulchan Communications

020 7353 4200

 

Notes:

1.        Consensus for the year ended 31 March 2021 is adjusted profit before tax is £175.2 million within a range of £171.1 million - £179.8 million (source: Electrocomponents.com/investors/analyst-coverage).

2.        Like-for-like revenue change is change in revenue adjusted to eliminate changes in exchange rates and trading days year on year. Acquisitions are only included once they have been owned for a year, at which point they start to be included in both the current and comparative periods for the same number of months. 2019/20 is converted at 2020/21 average exchange rates for the period.  

3.        Our profit remains sensitive to movements in exchange rates on translation of overseas profits. Average exchange rates for the year ended 31 March 2021 for euro and US$ respectively were €1.12 and $1.31 respectively. Every 1 cent movement in the euro has a circa £1.5 million impact on annual profit. Every 1 cent movement in the US $ has a circa £0.4 million impact on annual profit.  

4.        In the year ending 31 March 2022 we expect to see a positive impact of around £9 million on revenue from additional trading days compared with the year ended 31 March 2021.  

 

 

Electrocomponents plc - Conference Call Dial in Instructions

 

Date:

Tuesday 13 April

UK Time:

08.00

Chair:

David Egan

 

 

 

Participant pre-registration link:

The link can be used to pre-register in advance and also at the time of the call. 

https://www.incommglobalevents.com/registration/client/7155/electrocomponents-trading-update/

 

Participant dial in via an operator:

 

Telephone number:

+44 20 3936 2999

PIN:

621694

 

 

 

 

 

 

 

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