LONDON Electrocomponents saw a 5.3 percent decline in revenue to £974.6 million (about $1564 million) in the financial year to the end of March compared with the previous year.
The company has seen a 10 percent growth in e-commerce sales with the share increasing from 31 percent to 36 percent, exiting at 40 percent. In North America e-Commerce revenue grew by around 45 percent in the year. The on-line customer base provides over 1.5 million unique visits per month to the RS sites.
In first eight weeks since March 31, 2009 the sales trend has been similar to the final quarter of last year. Year on year group revenue has declined by around 17 percent, the U.K. by around 14 percent and the international business by around 19 percent. Within international, continental Europe has declined by around 17 percent, North America by around 23 percent and Asia Pacific by around 15 percent.
Electrocomponents said it faced markedly different trading conditions between the first half and the second half of the year. In the first half the group achieved sales growth, cost leverage and profit growth. During the second half, general macroeconomic conditions deteriorated significantly, and this adversely impacted the group’s performance. First half underlying growth was 1 percewnt and second half decline 11 percent.
Headline profit before tax was £86.6 million (about $140 million), down 10 percent year on year. The company concluded a bank refinancing of £281 million (about $450 million) during the year with a maturity of 2012.
The company said it has taken actions to reduce costs by £18 million (about $29 million) per annum, with a reduction of around 8 percent in the workforce – around 500 employees. One-off reorganization costs, principally employee severance, of £7.1m (about $11 million) were incurred.
The business delivered a cash flow of £78million (about $125 million), which was 4 percent higher than the prior year and represented 118 percent of profit after tax.
The group's gross margin for the year was 49.5 prcent with the second half margin improving by 0.4 percent points on the first half due, the company said, to more targeted use of customer discounts, better buying and selling price increases. Year on year, the 0.7 percent points reduction in the gross margin was primarily due to increasing promotional activities, customer discounts and large customer performance in the U.K., and country mix and foreign exchange impacts in Asia Pacific.
Electrocomponents launched an electronics production packaging capability across the U.K., Europe and Asia Pacific aimed at customers with small batch production needs, allowing them to order the quantity that they need in tubes, trays and continuous strips. The range available now totals 50,000 products.
The electronics product offer has been expanded with 10,000 new products introduced during the year. In April 2009, it increased our European stocked range of Texas Instruments products bringing the total range on offer to 11,000 products, with over 95 percent of the products available in production packaging format.
On-line search-to-order conversion has increased by 60 percent across the U.K. and continental Europe due to the improved search and browse capability which was introduced during the year.