Electrocomponents Plc, the world’s largest distributor of electronics and maintenance products, said global demand started to slow in June. The shares fell to the lowest in nine months in London trading.
Group revenue increased 14 percent in the fiscal first quarter ended June 30, with the international business growing by 17 percent and the U.K. by 8 percent, the Oxford, England-based company said in a statement today.
“The slowdown signaled by the wider semiconductor market and the purchasing manager indexes is impacting,” Investec Plc analyst Guy Hewett, who has a “hold” rating on the stock, said in a note to clients. “We expect this slowdown to continue.”
Electrocomponents, which gets 70 percent of its sales outside the U.K., wants to do a similar proportion through e-commerce. The company, which introduced 15,000 new products in the quarter, does 53 percent of its business through the Internet, up from 47 percent a year ago.
The shares fell 5.7 pence, or 2.3 percent, to 238.7 pence, the lowest since Oct. 4, extending the decline so far this year to 10 percent and paring its market value to 1.04 billion pounds ($1.68 billion).
Sales in June rose 11 percent from a year earlier, compared with a 16 percent increase in May and June, Chief Executive Officer Ian Mason said in an interview. Revenue in Europe outside the U.K. increased 17 percent during the quarter, while north American sales rose 16 percent and Asia-Pacific revenue advanced 15 percent.
“The purchasing managers indexes are off their peak,” Mason said. “The U.K. has been stable throughout. It has been a good start to the financial year, although the comparators are getting harder.”
Revenue in the same quarter a year ago rose 24 percent.
“Clearly growth is slowing as the group hits tougher comparatives, but this first look at 2011/12 is ahead of our expectations,” Seymour Pierce Ltd. analyst Kevin Lapwood, who upgraded his rating to “buy” from “add,” said in a note to clients today.