Electrocomponents PLC updates guidelines despite increasing external pressures

The increase in average order values ​​supports operating leverage and increased yields, but the distributor is under continued pressure from outbound freight, supply chain constraints, and labor inflation. work

Shares of Electrocomponents PLC (LSE: ECM) were on the rise in first trades on Tuesday after the group said its “strong business momentum” continued into late 2021.

The electrical and electronic components supplier said external challenges are expected to intensify in the last quarter of its fiscal year, but still expects annual profit to be slightly above consensus estimates.

Like-for-like (LFL) revenue growth year-over-year in the October-December quarter (the third quarter of the group’s fiscal year) slowed to 21% from 26% in the quarter previous and 37% in the previous quarter. .

Overall, the group’s turnover increased by 23% compared to the previous year, with acquisitions increasing by 5% and on trading days by 1%, offset by unfavorable currency movements.

Since the start of the year, LFL’s turnover has been 28% higher than in the first nine months of the previous year.

Compared to the same period before the 2019 pandemic, third quarter revenue increased 31% on an LFL basis while for the first nine months of the current fiscal year, revenue increased by 31% on an LFL basis. increased by 25% compared to the same period of 2019.

“Our strong commercial momentum continued in the third quarter, thanks to the exceptional efforts of our staff as we worked closely with our suppliers and customers in a difficult environment. The availability and breadth of our products, our service and solution offering, and our omnichannel capabilities have further driven the earnings-sharing market, ”said Lindsley Ruth, CEO of Electrocomponents.

“As we move into the fourth quarter, we are aware of external pressures, including the Omicron variant and supply chain constraints, although our better than expected trading in the third quarter means that we expect the full-year profit is slightly higher than consensus estimates. We continue to take advantage of significant market share opportunities to pursue our profitable growth, ”he added.

Shares of Electrocomponents rose 4.3% to 1,226 pence in early trades, after hitting 1,248 pence earlier.

Shirlene J. Manley