Farnell sales strong despite the impact of shutdown in the US

For the first two weeks of October, the US government entered a shutdown and stopped most routine operations, denting consumer confidence and freezing spending.

Leeds-based Premier said that all regions across the world reported growth in sales between August 5 and November 11, except the Americas which saw a 0.3 per cent fall.

Analyst Robin Speakman, at Shore Capital, said: “This report shows growth at or slightly above our expectations for the third quarter period in all regions except for the Americas, which reverted to a flat year-on-year performance. Management infer, to our minds, that this was due to the US shutdown in the period.”

Premier’s chief executive Laurence Bain said: “Americas’ sales per day were broadly flat year on year in the third quarter, despite the impact of the Federal Government shutdown, as we implemented our targeted sales and marketing initiatives.”

Strong sales of the Raspberry Pi mini computer have boosted sales over the past year.

In order to give guidance on underlying trading, Premier said that once Raspberry Pi sales are excluded, group sales grew 2.1 per cent year on year in the third quarter, an improvement on the 1.4 per cent decline in the first half.

Over nine months, group sales excluding Raspberry Pi declined 0.3 per cent year on year, reflecting the tougher market conditions in the first half. The Raspberry Pi is a credit-card sized computer that plugs into a TV and a keyboard.

Despite its small size the Pi is a capable little PC which can be used for many of the things that a desktop PC does, such as spreadsheets, word-processing and games.

It also plays high-definition video.

Raspberry Pi has proved very popular in schools where the mini computers are used to teach children the basics of IT in a fun way.

European sales per day grew by 4.1 per cent year on year in the third quarter.

Mr Bain said that Continental Europe continued to perform well and the UK returned to growth, following new marketing initiatives.

Premier said Asia Pacific delivered a strong performance in the third quarter with sales up 10.5 per cent year on year, boosted by the key emerging markets of China and India.

Customer initiatives helped Asia Pacific to grow its active customer base by 13.5 per cent by the end of October.

“We expect to grow our active customer base, gain market share and position the business for enhanced financial performance,” said Mr Bain.

Premier has seen lower sales in areas hit by public sector costs, primarily in defence.

As a result it is targeting segments where it sees stronger growth such as energy, energy conservation, wireless power and healthcare.

Mr Bain said the group sees “significant opportunities” in healthcare following the launch of devices that can track the state of people’s health on a continuous basis and send the information to an app. A new web platform has been implemented in Canada and roll-out across North America will be underway soon.

Premier said the new platform provides a better online experience and includes several features that make shopping easier.

Analyst Kean Marden, at Jefferies, said: “Revenue growth was stronger than expected in the third quarter, but cost, trading day and foreign exchange headwinds mean we are trimming 2014 earnings per share by two per cent.

“However, improving momentum augurs well for next year and our 2015 estimates remain unchanged.”

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