It has been an eventful year for Eurodis Electron Plc. Following its merger with the Eurodis companies of Elektrowatt AG of Switzerland (CI No 2,702) and subsequent change of name from Electron House Plc, the European electronics distributor was faced with the unexpected announcement in December that Elektrowatt wished to sell its newly acquired 42% […]
It has been an eventful year for Eurodis Electron Plc. Following its merger with the Eurodis companies of Elektrowatt AG of Switzerland (CI No 2,702) and subsequent change of name from Electron House Plc, the European electronics distributor was faced with the unexpected announcement in December that Elektrowatt wished to sell its newly acquired 42% stake. The period of uncertainty that ensued was not resolved until April, when it emerged that its plans to sell the stake to an unidentified German manufacturer had run into trouble over price (CI No 2,893). The shares have now been placed with institutions in London and Elektrowatt continues to hold convertible preference shares. The enlarged company turned in pre-tax profits of 18m British poundsfor the year from 6m pounds last time on revenue up 141% to 298m pounds, which includes 10 months trading from the Eurodis Group. During the period the Australian and New Zealand businesses were sold for 17.7m pounds and the Eurodis Group was acquired in August for 56m pounds in shares. Under its new guise, in November the firm sold Swiss systems company Eurodis Technology AG and the following month off-loaded its 51% stake of UK systems company Bytech Systems Ltd to its management for a combined price of 1m pounds. In January the 7m pound acquisition of French electronic component distributor TC-DIS was completed. And finally, in June 70% of the equity of Melcom SRL of Italy was acquired for 5m pounds.
The acquisitions have helped Eurodis strengthen its customer and products base and have launched the company as a major pan-European player in the component distribution industry. Inevitably, it has been a year of consolidation for the company. To reduce overheads the Swiss office was merged with the UK, which produced an annual cost saving of about 1.5m pounds and further investment has been made in the capacity and efficiency of the central European Logistics Center in Holland. Demand for electronic components slowed down towards the end of last year, but the company said its involvement in price-sensitive and volatile products remained relatively small. Processors for personal computers and memory components generally account for only about 13% of sales and less than 10% profits. As expected, the formation of a pan-European group has created new franchise opportunities for the group. New lines signed during the period included SGS-Thomson in Germany and four Eastern European countries, Philips Electronics NV in Switzerland and Eastern Europe as well as Italy and Linear Technology Inc, General Instrument Corp and International Rectifier for Eastern Europe. It expects difficult conditions to affect most or all of this half, but market growth should build up in the second half. Chairman Robert Leigh said profitability of the enlarged group is not yet at a satisfactory level; a final of 3pence, up 15% will be paid.