Reflecting the squeeze on margins that the market is applying to component distributors, London EC1-based Diploma Plc saw profit for its electronics division fall 15% to UKP6.8m on turnover up just 4.8% to UKP74.4m. According to chairman Christopher Thomas, however, the story is not all gloom and doom. He said that despite the lower world consumption of products and intense competition leading to price cutting, the Access Group managed to increase its market share and saw turnover grow by 15%. While Macro had what was described as solid sales over the year, its performance was bought down by that of its sister company Anzac which saw prices in the commodity memory area drop by 50%. However, Macro’s technical support group is getting good bookings and billings, as is the ASIC division, so that the seed corn investment which has gone into these two companies is already seeing some returns. Nortronic/DTV has had high overheads in advance of the launch of the Philips franchise which occurred in the last quarter and has put in a poor performance both because of this and because of general market conditions. Diploma’s computer-aided design and manufacture distributor ECS has reported above-expectation profits and Thomas believes that this is a company with plenty of potential. All in all, the immediate future of the market for electronics components looks bleak but, as in the building components sector in which Diploma is also active, the group is confident that it can weather the storm.
