Electrocomponents expects solid increase in H1 profit

FTSE 250 electronics distributor Electrocomponents said on Thursday that it expects to post a significant increase in first-half pre-tax profit following stronger-than-anticipated trading.

In a trading update ahead of its half-year results in November, the company said it now expects pre-tax profit to be around £54m versus £31.3m in the first half of last year, partly lifted by the weaker pound.

Electrocomponents now expects underlying sales growth of around 2% in the first half, with a stronger performance in the second quarter driven by a return to growth in North America and better trading trends in Asia Pacific .

The group said Northern and Southern Europe have also continued to see good growth across the period, which has offset some softness in Central Europe.

Electrocomponents said it continues to make good progress on its initiative to stabilise the gross margin and now expects the improvement in gross margins for the first half to be similar to that in the first quarter.

In addition, it said cost initiatives continue to run ahead of plan and expressed confidence in delivering at least £15m of savings during the current financial year.