Premier Farnell plc, a global leader in high service distribution of technology products and solutions, has announced its interim management statement for the period February to 16 May 2013.
The trends reported in Premier Farnell's 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 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 the distributor's main MDD divisions all delivered sales growth over the fourth quarter. The 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.
Premier Farnell's active customer base grew 2.0% year on year, excluding the benefit of Raspberry Pi. As highlighted in its full year statement, the company is further enhancing its proposition through the rollout of a new web platform, system developments and investments in inventory, all of which are progressing as planned.
Field sales and contact centre channels combine with Premier Farnell's leading-edge eCommerce channels, where 57.0% of sales were transacted in the first quarter, to deliver a differentiating customer experience. The 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," the company said in a release.
Conditions in 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," Premeir Farnell said in a release. "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 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."