Electrocomponents sales growth dips in key markets

Electrocomponents’ sales growth in continental Europe kept the company’s revenue up, despite a slow start to July in its key markets.

The FTSE 250 listed company released its first half trading update on Friday.

It showed overall revenue growth in the second quarter dropped to 3% as a result of a slowdown in North American revenues.

Revenue stateside dropped 3% in the quarter due to a weakening US manufacturing output.

Revenue for the UK was down 1% for the second quarter running, which has impacted the company’s overall sales growth for the half to 4%.

It company is also expecting a year-on-year decline in gross margin for the first half of the year of approximately 1.7%.

Electrocomponents said foreign exchange accounts for approximately two-thirds of the decline and it is continuing to look at pricing, purchasing and discounts as well as tightening its control of operating costs, which rose approximately 3% in the period.

Group chief executive Lindsley Ruth praised the performance of the continential Europe business.

“[It] has performed exceptionally well with double digit revenue growth across all its key markets. Strong growth here is set against the impact of the well documented slowdown in the North American market.”