Electrocomponents FY profits seen 'slightly ahead' of consensus estimates

Industrial and electronics products distributor Electrocomponents said on Tuesday that it had delivered a "strong trading performance" in the third quarter of its trading year, leading it to now expect full-year profits to be "slightly ahead" of consensus estimates.

Electrocomponents said third-quarter like-for-like revenues were up 2.1% despite "toughening comparatives", while overall quarterly revenues grew 23%, partly driven by acquisitions.

The FTSE 100-listed firm added that it had also delivered "sustainable improvements" in its adjusted operating profit margin, with increasing average order values supporting operating leverage and increasing returns while also somewhat offsetting ongoing pressures from outbound freight, supply chain constraints and labour inflation.

As a result, Electrocomponents now anticipates that full-year profits will be "slightly ahead of consensus estimates" despite the firm also predicting that external challenges will likely intensify in the fourth quarter, due to the Covid-19 Omicron variant impacting labour availability across suppliers, customers and its own operations.

Chief executive Lindsley Ruth said: "Our strong trading momentum continued into the third quarter, thanks to the exceptional effort of our people as we worked closely with our suppliers and customers in the challenging environment. Our product availability and breadth, service and solutions offer and omnichannel capabilities have driven further market share gains.

"As we enter Q4 we are mindful of external pressures, including the Omicron variant and supply chain constraints, although our better than expected Q3 trading means we expect full-year profit to be slightly ahead of consensus estimate. We continue to take advantage of significant market share opportunities to drive further profitable growth."

As of 0825 GMT, Electrocomponents shares were up 3.23% at 1,213.0p.