Premier Farnell reports slowdown

SHARES in electronic parts distributor Premier Farnell plunged this morning after the group issued a profits warning.

The Leeds-based group, which missed first-quarter profit forecasts due to lower sales in Asia, blamed the effects of the global economic slowdown for a decline in its fortunes.

Premier said there had been a slowdown in all its main markets last month, particularly in Europe and north America.

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It said profit growth would be “marginally lower” than previously hoped and that second-quarter revenues would also come in below targets.

“As a result of the rapid change in the global business environment since our last statement, and recognising the limited visibility in our business model, the board now expects second-quarter revenue growth will be less than the targeted range of six to eight per cent over the prior year,” it said.

Premier Farnell shares were down 19 per cent at 203p in early morning trade, their lowest since March 2010.

RBC Capital Markets analyst David Greenall, who has an “underperform” rating on the stock, said: “We already knew Premier Farnell’s growth rates were slowing down. What is surprising is that they have deteriorated so much more, so quickly.”

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Premier’s shares have fallen by around 35 percent over the last six months.

Last month the group insisted its strategy is on track despite shedding eight per cent of its market value after it missed first quarter profit forecasts.

The group blamed problems in its Singapore and Malaysia operations for driving total sales in its Asia Pacific region down 3.7 per cent in the three months to the end of January.

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