THE new chief executive of Premier Farnell said he has no plans for a drastic overhaul of the electronic components distributor as it reported falling quarterly sales and profits amid tough markets.
Former chief operating officer Laurence Bain, who took over from Harriet Green this week, said the battery-to-microchip distributor is making good progress and has a clear strategy for growth.
Mr Bain has been with the Leeds-based company for a decade and helped devise its strategy, which involves more web commerce, increasing its international presence, plus a tighter focus on the electronic design engineering (EDE) and maintenance, repair and operations (MRO) segments.
“I believe we have a really good strategy,” said the Scot, who previously worked for Motorola.
“The general strategy in key areas of focus, that’s all going to continue, but clearly as we look to move the business forward there are levers that we can use to help us optimise overall performance.”
Cost cuts will play a big part, and Premier said it has already cut year-on-year overheads by £4.5m during the three months to the start of February.
Premier opened a multi-lingual call centre in Krakow, Poland, last month. It is planned as a centre of excellence and the group is consolidating European call centre operations there.
This will result in up to 34 job losses in Leeds, leaving the group with about 1,020 staff in its headquarters.
However, Premier said it hopes to mitigate job losses by transferring some staff to other roles.
The group said first-quarter adjusted pre-tax profits slipped 13 per cent to £20.9m on sales down five per cent at £241m.
But Mr Bain said Premier’s performance beat weak markets, where industry surveys show steeper falls in sales and sentiment. He said Premier’s main EDE market is “near the bottom of the cycle”. He expects growth in its second half as comparatives become easier.
Mr Bain will consult more of his shareholders after 32.1 per cent of investors voted against the group’s remuneration report at its annual meeting on Tuesday.
“I think we do have our investors on board,” he said, adding 11 of its 12 biggest shareholders supported the executive pay package. “We will be looking to engage with them to understand why.”
Jane Sparrow, analyst at Barclays, said the results were worse that it expected and downgrades are likely.
Ms Green is joining tour operator Thomas Cook in July.