Electrocomponents plc (LON: ECM) today issued a trading update for its first half ended 30th September 2019 ahead of publishing half-year results on 12 November 2019.
| Like-for-like revenue growth(1) | |||
| Region | Q1 to June 2019 | Q2 to Sept 2019 | H1 to Sept 2019 |
| Northern Europe | 7% | 4% | 5% |
| Southern Europe | 5% | 5% | 5% |
| Central Europe | 3% | 1% | 2% |
| Emerging markets | 9% | 56% | 33% |
| Total EMEA | 5% | 6% | 5% |
| Americas | 0% | 7% | 3% |
| Asia Pacific | 1% | 3% | 2% |
| Group | 4% | 5% | 5% |
· Continued strong performance in Industrial led to 5% like-for-like Group revenue growth in both Q2 and H1.
o Further growth and market share gains in EMEA despite increased macro uncertainty.
o Improved growth in Americas driven primarily by sales force initiatives.
o RS PRO accelerated through the half with 10% like-for-like revenue growth in H1.
o Digital revenue growth performing broadly in line with Group in H1.
· As highlighted in Q1, we expect H1 gross margin to be down year on year, by around 0.8 percentage points, impacted primarily by mix. We expect a more modest year-on-year decline in H2 as strong growth in OKdo(2) will be partially offset by purchasing and pricing actions.
Lindsley Ruth, Electrocomponents plc CEO, commented:
“Our relentless focus on customer service, digital leadership and sales force effectiveness has been key in driving market share gains even in these more uncertain markets. We continue to invest in strategic initiatives to position the Group to deliver sustained growth over the longer term. We are pleased with our performance in H1 and remain on track to deliver good progress for the year.”
Notes:
- Like-for-like revenue growth is growth in revenue adjusted to eliminate the impact of acquisitions, 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 is converted at 2020 average exchange rates for the period.
- As previously announced, OKdo launched in April 2019 to improve the Group’s offer in the fast growing markets of single-board computing (SBC) and Internet of Things (IoT). Raspberry Pi added c. 1% to Q2 Group like-for-like revenue growth but had limited impact on H1.
- Our profit remains sensitive to movements in exchange rates on translation of overseas profits. Average exchange rates for the year ended 31 March 2019 for euro and US$ respectively were €1.13 and $1.31 respectively. Every 1 cent movement in the euro has a circa £1.4 million impact on annual profit. Every 1 cent movement in the US $ has a circa £0.5 million impact on annual profit.
- In the year ending 31 March 2020 we expect to see a positive impact of around £10 million on revenue from additional trading days compared with the year ended 31 March 2019.
