LONDON Premier Farnell plc has increase revenue of its continuing operations in its latest financial year to february 3 by 5 percent to £744.7 million. This excludes the figures for BuckHickman (a U.K. distributor of industrial tools and supplies) which was sold on April 10, 2007. Operating profit was up 9 percent to £88.0 million.
Results for the final quarter of the year were even more impressive with revenue up 7 percent to £197.7 million with operating profit up 16 percent at £20.3 million.
The North American marketing and distribution division (MDD) business had fourth quarter sales growth of 9 percent despite challenging market conditions and the company saw a second year of double digit sales growth in mainland Europe as customer acquisition targets were met.
The company's internationalization plans advancing with a business acquisition in India completed on time and now operational, sales in China up 23 percent in the fourth quarter, more local language websites launched in Eastern Europe and Asean. “The fourth quarter saw our strongest Group sales per day growth and provided a strong finish to the year, said Harriet Green, Premier Farnell's chief executive officer. “This reflects the benefits of the strategy, announced a year ago, to focus on the EDE [electronic design engineer] segment, the web and the internationalization of our high service business model. The fourth quarter saw good progress in all aspects of the strategy and, when combined with the continued gross margin stability and cost focus, led to a full year reported pre-tax profit improvement of 14%, despite the impact of exchange rates.”
“In mainland Europe we continued to demonstrate robust performance with growth of 11.2 percent in the fourth quarter, leading to a second full year of double digit sales growth, while U.K. sales grew 3.2 percent in the fourth quarter,” added Green.
“With 76 percent of the group’s sales in international markets, the particularly slow market conditions in the U.K. have had less of an impact on the group’s performance. Performance in Asia in the quarter was also strengthened, with China delivering outstanding quarterly growth of 23.4 percent.”
“Focus on the EDE segment continues to provide exciting opportunities,” said Green. “And the signing this quarter of a further nine key franchises including ISSI, ROHM and Ohmite, and four specialist, niche technology franchises continues to provide evidence of our commitment to responding to the feedback we receive from this critical customer group.”
The company added 88,000 stocked products during the year and a further 50,000 available on-demand. The company has also set up a pan-European development tool program with Altera and a global small order, online referral program with Fujitsu.
On January 31, 2008, the group acquired that part of the trade and net assets of Hynetics Electronics Private Limited used in carrying on its business in India as an existing authorised distributor of Farnell products, for a total cash consideration, including costs, of £0.9 million.
A supplier summit held in Asia during the fourth quarter had 40 attendees from the supplier community and plans for a similar supplier engagement program to support the EDEs in Eastern Europe and India are well underway.
The company's Live Edge technology challenge came to its conclusion with a virtual award ceremony and technology conference attended by engineers from across the world. The 2008 challenge will be ready to launch shortly.
In the fourth quarter MDD web sales were up 38 percent and total ecommerce sales accounting for 29 percent of total MDD sales in the fourth quarter. Some countries are already performing well above the company's 2009/10 target to transact 50 percent of business via the web. This level of European activity equates to us receiving an order every 10 seconds, constantly, throughout a 12 hour working day.
In the U.S., web sales in the fourth quarter grow by 49 percent, with a significant increase in organic search, progressive and increasing average order values; and a significant increase in both new customer and repeat visits.