Premier Farnell to cut dividend and sell fire-fighting business

Premier Farnell makes the Raspberry Pi, the low-cost computer to help children get online. Picture: Andy Spencer

Premier Farnell makes the Raspberry Pi, the low-cost computer to help children get online. Picture: Andy Spencer

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​Electricals distributor​ Premier Farnell has issued another profits warning and said it will cut its dividend and sell a non-core business as it battles to fight slowing sales growth.

The Leeds-based company, which ​fell out of the FTSE 250 earlier this month after difficult trading, forecast a fall in adjusted operating profit and said it will sell its industrial products division Akron Brass in Ohio and stop direct operations in Brazil.

​The Akron Brass business makes and sells high-performance fire-fighting equipment for fire truck manufacturers, public fire services and industrial facilities.

The unit, with a high market share in North America, accounted for about 7.5 per​ ​cent of Premier’s total revenue.

The company put in place a new global structure last year, combining its marketing and​ ​distribution businesses in the hope that it would boost performance.

​But slowing sales growth continued to plague the maker of Raspberry Pi – the mini, low-cost computer created to help millions of youngsters get online and learn to code – and it announced a review of its operations in July.

​​Interim CEO Mark Whiteling said: “Is it change? Yes it is change. Is it too much change? No.”

Its marketing and distribution business accounted for about 80 per​ ​cent of turnover last year.

The company cut its interim dividend by almost 41 per​ ​cent and said it expect​s​ full-year adjusted operating profit of ​between ​​£​73​m ​and​ ​£​77​m, down from £88m last year.

Analysts at RBC Capital Markets believe there is a strong likelihood that Premier Farnell could be acquired. Mr Whiteling said the board will look at all options as part of a review.

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