Electrocomponents reports strong revenue and profit growth in the six months to the end of September driven by its performance improvement plan.
Revenues at £706.3m were up 12.7% aided by foreign exchange and extra trading days with underlying revenue growth of 2.1%. Underlying revenue growth increased to 3.1% in Q2 (0.9% Q1) as North America and Asia returned to growth.
Gross margins improved 0.3% points driven by initiatives on pricing and discounting discipline.
Reported PBT of £54.5m was up 174% aided by a significant reduction in the exceptional charge year on year. Headline H1 PBT of £55.1m was up 76% and 45% on an underlying basis.
- 'Simplify - Operate for Less' actions drove a 2.3% points underlying improvement in operating margins to 8.2%.
- Strong headline free cash flow was up £50.1m year on year, with improved stock turn 2.8x (H1 2016: 2.5x).
- Reported EPS was 9.0p up 190%. Headline EPS was 9.1p up 75% or 57% on an underlying basis.
- Interim dividend maintained at 5.0p.
Chief executive Lindsley Ruth said: ""One year on from the launch of the Performance Improvement Plan, I am extremely pleased by the progress we are making to put the customer back at the heart of this business, increase accountability and operate for less. As a result of our actions we have seen significant growth in both profits and cash flow during the first half of our financial year. However, while we have taken a major step forward, we are only just at the beginning of this journey and still a long way from best in class. We remain extremely focused on delivering a further step change in the performance of this organisation and are excited about the significant potential for further improvement and growth."