Premier Farnell warns on profit

Shares in the FTSE-250 company fell more than 12 per​ ​cent to their lowest since October 2011. The stock was one of the top percentage losers on the London Stock Exchange on Thursday morning.

​Leeds-based ​Premier Farnell said it estimated operating profit of ​£​86​m to ​£​8​8m) for the year to Feb​ruary​. 1. The company reported an operating profit of ​£​91.5m​ a year earlier.

The company said in November that full-year operating margins would be slightly below prior year levels as it experienced softer trading conditions in Asia and Europe.

“Overall a slightly disappointing update from Premier Farnell with further mix/margin and currency pressures offsetting improving revenue trends ... As such it is geared to global economic recovery but for now markets remain challenging and revenue visibility is low,” N+1 Singer analysts said.

The brokerage has a “sell” rating on the stock.

Premier Farnell, which sells about half a million products through its websites including Newark, Farnell and element 14, said in June that it would combine its marketing and distribution businesses in the Americas, Europe and Asia Pacific regions to boost performance.

The company said then that it would see annual cost savings of​ £6​m to ​£​8​m.

The marketing and distribution business accounted for about 80 per​ ​cent of its total turnover​ in 2014.

Premier Farnell, which started out as a radio parts seller in 1939, said on Thursday that full-year sales per day would grow 3.3 per​ ​cent, and increased its cost saving target to between ​£​10​m and ​£12​m per year.