London SW1-based Electrocomponents Plc saw profits slide in the second half of 1991. Pre-tax profits fell 6% to UKP55m on turnover that managed a 5% nudge up to UKP416m. The tale is a familiar one – heavy restructuring, cost-cutting. At the interim stage (CI No 1,555), RS Components was reported to be sustaining the group […]
London SW1-based Electrocomponents Plc saw profits slide in the second half of 1991. Pre-tax profits fell 6% to UKP55m on turnover that managed a 5% nudge up to UKP416m. The tale is a familiar one – heavy restructuring, cost-cutting. At the interim stage (CI No 1,555), RS Components was reported to be sustaining the group financially, though chairman Sir Keith Bright anticipated a drop off in sales due to a decline in the UK retail market and poor export figures following the Gulf War – to counteract some of the effects of the recession, the division launched new catalogue products in November and March. Profitability at RS Australia was also hard hit by recession. A building expansion programme has now been completed at RS, which has cost UKP21m over two years. The restucturing programme was implemented to focus the group on the catalogue market served by RS and Misco. In April, RS Components GmbH began operation in Frankfurt – the Stuttgart operation will close in September and certain operations will be moved to Frankfurt. And, following the expansion by acquisition into Sweden and Canada, Misco International started up in France in January. Misco Germany performed well, while Misco’s performance in the UK was disappointing, as in the US which turned in a loss. Pact International and Wellco, which the company acquired from BTR Group, have now been merged to boost representation in a difficult market. In the US, Mesa Systems was sold at a loss for $6m to North Atlantic Industries in November, and negotiations are under way for the sale of Mesa Distribution. The Washington office was closed as planned. In December, the board decided to sell or close the Electro Lighting Group – so far two parts of the division have been sold and the main distribution and retail divisions will be closed in the summer – total net losses amount to UKP12.2m; job losses totalled 1,400. Capital expenditure for the year reached UKP23m, most of which was used in the RS building expansion programme. After taking this into account, as well as some UKP40m spent on acquisitions, the company’s strong cash flow enabled borrowings to be kept down to UKP16.8m.