Premier Farnell Q3 results
Total revenue declined -1.6% in Q3 to EUR 287.1 million, compared to EUR 297.3 million during the same period of 2011. Total operating profit declined -3.7% in Q3 to EUR 27.0 million, compared to EUR 29.6 million during the same period of 2011. Total profit before taxation declined -10.8%in Q3 to EUR 21.2 million, compared to EUR 23.8 million during the same period of 2011. Financial highlightsGroup third quarter year on year sales per day decline of 1.6%, unchanged from the second quarter, reflecting less favourable market conditions overall in September and October compared with the slight growth experienced in August.Third quarter gross margin of 38.3% was down 0.2% from the second quarter as we continue to manage in line with market conditions. Operating expenses in line with prior year, after adjusting for the impact of the Embest acquisition, as cost actions offset the impact of cost increases.Operating cash generation(e) (excluding impact of adjusting items) was in line with expectations at 83.6% of operating profit for the quarter and 111.5% year to date (2011/12: 85.7%).Strategic highlightsRaspberry Pi sales in the quarter of EUR 5 million increased from EUR 4.7 million the second quarter.MDD eCommerce penetration increased by 1.1 percentage points from the start of the year to the third quarter at 56.4% and exited at 57.3%.The element14 Community maintained its strong progress, receiving over 1.7 million visits and adding more than 21,000 new registered users in the quarter, with total registered users now over 138,000. Engagement on the site increased with over 100,000 interactions per week by the end of the quarter.Emerging markets’ sales grew 14.2% in the quarter benefitting from the integration of our Embest acquisition (6.4% growth excluding Embest), and now represent 9.2% of total MDD sales.Our multichannel sales transformation continues with our Krakow contact centre now officially opened.“Our active customer base exited the third quarter up 2.3% on the prior year, excluding Raspberry Pi, compared with the second quarter of 1.0%, giving us confidence in future growth opportunities.”, writes the company.“After seeing a slightly positive start to the quarter in August, market conditions remained volatile in September and October and we saw year on year sales declines in those months. As a result, our third quarter sales declined 1.6%, in line with that reported in the second quarter. In November, year on year trends in our MDD Europe and APAC region improved slightly, but the MDD Americas performance declined, partly as a result of the impact of Hurricane Sandy. After adjusting for Sandy, Group year on year sales declined 3.2% in November. We continued to manage gross margin as we develop initiatives to meet customer needs in this challenging environment. Keeping our cost base flat year on year has enabled us to continue to achieve an industry leading return on sales, 9.4% for the quarter and 10.1% for the first nine months. Our cash performance remains strong, demonstrating the resilience of our business model in challenging markets.” said Laurence Bain, Group Chief Executive.