Asian slump hits Premier Farnell profit
ELECTRONIC components distributor Premier Farnell missed first-quarter profit forecasts yesterday due to weakness in its Asia Pacific operations, sending its shares to a nine-month low of 250.4p.
Premier Farnell, whose shares had risen sharply in recent months to reach a nine-year high on the back of hopes for its exposure to global growth, said its sales in Asia Pacific fell nearly four per cent, mainly due to a disappointing performance in Singapore and Malaysia.
The FTSE 250-listed company said it had beaten its own forecasts and added it would perform in line with targets for the second quarter, but analysts said they were disappointed with the profit miss.
“Adjusted Q1 numbers from Premier Farnell were below our and the market’s expectations,” Seymour Pierce analyst Caroline de La Soujeole said, though she did not change her full-year forecasts.
“The structural growth drivers are still in place and very strong … and we are still positive on the company,” de La Soujeole said.
Premier Farnell sold its TPC division, a US distributor of industrial wire and cable, earlier this year as part of its strategy to focus on its electronic design engineer and maintenance repair and operation businesses.
For the quarter ended 29 January, the company, which sells products ranging from batteries and chargers to computer consumables and security products in Europe, North America and Asia Pacific, said pre-tax profit before exceptional items rose to £24.1m from £21.4m last year.
Analysts, on average, were expecting a profit of £26.6m for the quarter.
The FTSE 250 company, which counts Philips, Microsoft and Nokia as its customers, said sales for the first quarter rose 8.3 per cent to £252.5m.