Industrial and electronic equipment supplier Electrocomponents (ECM) saw its share price gain 1.9% to £10.95 as it lifted full year guidance after a better-than-expected showing for the six months to 30 September.
The company said it now anticipated full year revenue growth and adjusted operating profit margin to be slightly ahead of the guidance provided with our Q1 update. Although it cautioned about a stronger than usual weighting to the first half, reflecting increasing supply chain shortages and cost pressures.
The company previously guided like-for-like revenue growth of low double-digit to mid-teens for the full year, and adjusted operating profit margin returning to 2019/20 levels.
For the first half ended 30 September 2021, like-for-like revenue grew 31%, with EMEA, Americas, and Asia Pacific rising by 29%, 37% and 31%, respectively.
TRADING ‘VERY STRONG’
‘Our trading has remained very strong across all regions as we have worked closely with suppliers to ensure our product availability, delivery and service offer remain robust, which has driven further growth in both customers and average order value,’ the company said.
Electrocomponents will release its first half results on 4 November 2021.
Shore Capital analyst Tom Fraine commented: ‘We believe the company is well placed to continue to gain market share, especially in the midst of supply chain disruptions, given its market-leading stockholding capabilities.
‘We also expect the company to continue to benefit from increased electrification in industrial processes in the short and long term.’
Fraine also cautioned on valuation, noting the shares trade at a ‘significant premium’ to Electrocomponents French peer Rexel.
His counterpart at Numis, David Brockton said: ‘While the comparatives will toughen and external challenges may slow returns, the business is clearly benefiting from its focus on customer service, investment in a wide breadth of products and solutions, and omni-channel model to drive share gains. We see a long runway of growth ahead.’
