logo-loader

Electrocomponents shares rise as it reports double-digit revenue growth

Last updated: 05:27 05 Jul 2018 EDT, First published: 03:24 05 Jul 2018 EDT

electrocomponents
The company said all five regions continued to see good growth

Electrocomponents PLC (LON:ECM) saw its shares rise on Thursday morning as the electronics distributor said it continued double-digit revenue growth and improved profitability.

In a trading update, the FTSE 250-listed firm said for the first quarter ended 30 June 2018, like-for-like revenue growth “remained strong at 10%.”

READ:Electrocomponents powers higher after making strong start to new fiscal year

The company said all five regions continued to see good growth, with Americas region growing the fastest, driven by market share gains in a strong underlying market.

Lindsley Ruth, Chief Executive Officer, said: "The year has started well with our continued focus on the customer, digital leadership and sales effectiveness driving strong results across the business.”

She added: “We are making good progress on our initiatives to further simplify the way we operate in order to drive a more efficient and scalable operating model. All this means we are confident of delivering further strong progress in the current financial year."

In a note to clients, city broker Peel Hunt downgraded the stock to 'Hold' from 'Add' but upped its target price to 710p from 690p, saying: "The shares have seen a deserved rerating in the last couple of years and we fundamentally back this management team to deliver over the long term; however, with plenty of execution risk still in the equity story, and for what is still an essentially cyclical business, we believe the current price is rich for an entry point.

They added: "Everything moves in the right direction when the trading environment is strong, but it is unlikely that backdrop will be sustained for the whole journey back to mid-teens operating margin, in our view. We therefore bring our recommendation back to Hold, despite increasing our target price to 710p, in line with the upgrade."

In mid-morning trading, Electrocomponents shares were up 1.6% to 739.8p.

--Adds broker comment and updates share price--

Ramp Metals Launches Drilling Program in Pursuit of High-Grade Nickel in...

Ramp Metals CEO Jordan Black joined Steve Darling from Proactive to introduce the company to the public domain and share exciting developments in the mining industry. With a background as a geotechnical engineer and experience in venture capital, including a notable role in taking GoldSpot...

25 minutes ago