Excellence in Business Awards 2011: Customer focus at heart of a spreading web

Its chief executive Harriet Green has led the 70-year-old electronics distributor through a complete transformation in the last five years.

The judges said: “Premier Farnell is a company that’s doing business across the world. It’s in a tough market but it continues to make stable profits.

“The company has changed the way it does business. It’s all about customer service.”

The judges praised Premier Farnell for its high levels of enterprise and competitiveness along with management, innovation, performance, customer service and employee motivation within the workplace.

The judging panel were particularly impressed by the robust engagement programme to make Premier Farnell a great place to work.

Other areas of success for the business were the recent launch of the state-of-the-art gym facility at the Leeds-based site and the sponsorship of David Stone, the double gold medal Paralympian who hopes to compete at the 2012 Paralympics.

David Gaskin, finance director of Farnell Europe, who received the award from Deputy Prime Minister Nick Clegg, said: “We are absolutely delighted to win this accolade and I would like to thank all our teams for making this happen.

“This is a fabulous recognition for the organisation and its employees.

“We are absolutely delighted, it’s a great honour for the company. We have faced tougher markets recently, but we’re confident about the future.

“It’s all about customer focus.”

Premier Farnell believes its switch to e-commerce should help it to save £15m in the second half of this year as the global economic environment shows no sign of easing.

Ms Green is focusing on cost cutting in order to meet profit targets.

“The conversion to the web is a key part of our strategy,” she said.

“Over 50 per cent of our trading is e-commerce in Asia, it’s 73 per cent in Europe and 40 per cent in North America.”

In addition to the switch to web sales, which has involved the closure of branches in the US, cost savings are being made from the lower cost of packaging and shipping as sales have gone down, a reduction in hiring new people and a cut down on travel.

Despite the reduction in recruitment, the global workforce has risen by 11 per cent.

In Leeds the headcount has risen by 23 per cent over the past two years.

Premier, which sells products ranging from batteries and chargers to computer components and security products in Europe, North America and Asia Pacific, said a two per cent fall in August sales indicates that the economic environment is still tough.

“We will focus on our growth margin and cost plans, while investing in the business,” said Ms Green.

“I don’t know if it’s long term slower growth, or whether it’s double dip, ” she added.

“My own personal view is we’re in a slower, global grind-it-out growth. The good thing is, as we saw in 2009, we’re a very robust organisation.”

She added that the decision to keep the interim dividend at 4.4p shows the group’s confidence in its profitability.

“We’re a screamingly good yield,” she said.

The group, which reported second quarter sales growth of 1.4 per cent, made £2.1m of cost savings in the period.

“In taking these actions quickly and effectively we believe we will ensure maximisation of our sales, operating profit and cash positions to drive towards achieving our expectations this year,” said Ms Green.

Analysts are expecting full-year pre-tax profits of around £94m.

Analyst Adrian Kearsey at Evolution said: “While the second quarter results clearly show a mid cycle slowdown, somehow the collapse in earnings, predicted by the share price, has not materialised.”

The global economic slowdown, especially in North America and Europe, has been exacerbated by companies overstocking following the Japanese tsunami.

Most of Premier’s products are shipped the same or the next day and the company counts Microsoft, Philips and Nokia among its customers.

E-commerce now makes up 55 per cent of Premier’s business.

The group has also been building its element14 online design community, which has been dubbed “a Facebook for electronic design engineers”.

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