Electronics distributor Premier Farnell reported a pick-up in fourth-quarter sales yesterday and said it had made a good start to its new financial year.
"We successfully outperformed the market in the UK and continental Europe, and we tracked the market in North America," finance director Andrew Fisher noted, adding this was due to effective marketing and increasing efficiency.
Premier Farnell, which sells thousands of small packages of components each day, said turnover rose to £814 million in the year ended January 29, up from £776.7 million.
For the fourth quarter, revenues were £208.4 million, up from £185 million, but this increase did not translate to pretax profit which fell to £3.3 million from £13.3 million.
Operating profit slipped to £60.3 million from £72.5 million due in part to oneoff restructuring costs.
Full year pretax profit was £38.1 million, down from £59 million.
Premier said in January that it plans to cut 175 jobs at its BuckHickman InOne unit as part of a restruc-turing of the business, with redundancies starting in April and ending in September or October. The group said it had no plans to sell the business, which markets and distributes abrasives, engineering, maintenance and welding products from more than 30 branches in the UK.
" The group had an encouraging close to the year, delivering solid growth in both sales and underlying operating profit in the fourth quarter," executive chairman Sir Peter Gershon said.
"The trading performance of the group in the first few weeks of 2006/7 has been satisfactory."
The firm was planning for "modest growth in its markets".
Premier Farnell said it had made progress in its preparation for the European Union's planned Restriction of Hazardous Substances (RoHS), which takes effect on July 1, but said "a considerable amount of work remains to be done".
"We have to migrate between 60,000 and 70,000 individual stock units. We are about 75 per cent of the way through the conversion in Europe and about 50 per cent in North America," Mr Fisher said.
Premier Farnell said products such as resistors, transformers and encoders fell under the legislation.
The group said it had started work on the reforms two years ago with the aim of leading the market and had seen a significant shift in sales along with an increase in traffic to its website.
"The approach that we are taking on RoSH is paying dividends," Sir Peter insisted.
The group is to pay a final dividend of 5 pence per share, giving a full-year dividend of 9 pence per share, the same as the year before.