Premier Farnell plc - Interim Management Statement
17th May 2013
Premier Farnell plc ("the Group"), a global leader in high service distribution
of technology products and solutions, today announces its interim management
statement for the period 4 February to 16 May 2013. The financial and
operational data set out below are in respect of the Group's first quarter
ended 5th May 2013.
The trends we reported in our fourth quarter announcement of 21 March 2013
continued into the first quarter of the current financial year with sales per
day returning to year on year growth of 2.8%, reflecting our strategic actions
to drive customer acquisition and market share and strong growth in sales of
Raspberry Pi and associated products. Excluding sales of Raspberry Pi, Group
sales declined 0.6% year on year compared to the fourth quarter year on year
decline of 6.4%.
Group sales increased 5.7% on a sequential basis as our main MDD divisions all
delivered sales growth over the fourth quarter. We were pleased that MDD
Americas year on year sales decline moderated, improving by 8.7 percentage
points from the prior quarter as a result of the actions taken to enhance its
performance, despite ongoing weakness in its end markets. Year on year sales
per day growth for the first quarter was as follows:
Sales growth(a) Q1 2013/14
MDD Europe & APAC 3.2%
MDD Americas -0.7%
MDD Other 10.4%
MDD Division 2.4%
IPD Division 7.4%
a. Sales growth is based on sales per day for continuing businesses at
constant exchange rates and for like periods.
b. Excluding the acquisition of Embest, APAC grew 3.2% year on year. The Group
acquired Embest in the second quarter of our 2012/13 financial year.
Our active customer base grew 2.0% year on year, excluding the benefit of
Raspberry Pi, as our targeted customers were attracted by our high service
proposition. As we highlighted in our full year statement, we are further
enhancing our proposition through the rollout of our new web platform, system
developments and investments in inventory, all of which are progressing as
We interact with customers in the way they prefer through our multichannel
sales strategy. Field sales and contact centre channels combine with our
leading-edge eCommerce channels, where 57.0% of sales were transacted in the
first quarter, to deliver a differentiating customer experience. Our
industry-leading element14 Community is attractive to our target customer base
with more than 20,000 new members joining in the quarter to take the total
number of registered users to over 170,000.
Conditions in our global markets remain challenging and customers continue to
act cautiously. We continue to manage our business in line with market
conditions and develop initiatives to support customer needs which, alongside
the impact of product mix, exchange rate movements and the ongoing strength of
Raspberry Pi sales, resulted in gross margin below our fourth quarter
performance. The benefit from our fourth quarter cost actions resulted in
operating margin in line with our expectations and consistent with the level
seen in the prior quarter which, after adjusting for the benefit of the extra
week, was 9.2%. The Group remains focused on managing gross margin and costs in
line with the market conditions to optimise financial performance. We continue
to anticipate that the Group's performance this year will be weighted towards
the second half as our strategic focus enables the Group to drive towards our
operating margin target.
There have been no significant changes to the Group's financial position during
the period with cash flow and net debt in line with our expectations.
Laurence Bain, Group Chief Executive Officer, commented:
"We are pleased that our actions to enhance our proposition and drive sales
have enabled the Group to return to positive growth in the first quarter.
However, current market conditions remain challenging with indicators still
weak in all our global markets.
We continue to enhance our customer proposition as we invest in inventory,
systems and our differentiating multichannel sales strategy, starting with our
new global web platform which is currently being implemented in North America.
We remain confident in our ability to implement our strategic vision and
optimise the business' performance to grow our active customer base, gain
market share and drive financial performance."
A conference call for analysts and investors will be held at 8.30am on 17th May
2013, details for which are as follows:
Participant Access: Dial in 5-10 minutes prior to the start time using the
number / Conference ID below.
Confirmation Code: 7687908
Dial-in +44(0)20 3427 1918
For further information, contact:
Laurence Bain, Chief Executive Premier Farnell plc +44 (0) 20 7851 4107
Mark Whiteling, Chief Financial
Thomas Churchill, Investor
Andrew Lorenz FTI Consulting +44 (0) 20 7269 7291
Premier Farnell's announcements and presentations are published at
www.premierfarnell.com together with business information and links to all
other Group web sites.
The 2013 Annual Report and Accounts is now available at
http://annualreport2013.premierfarnell.com. The results for the first half of
the 52 week financial year ending 2 February 2014 will be announced on 19