Farnell Electronics Plc is hoping to repeat its UK formula in the US and Singapore, and become the king of catalogue distribution of electronic components in markets that it believes are ripe for exploitation. The Wetherby, Yorkshire-based company launched catalogues in Singapore and the US on October 2 and October 9 respectively. It believes it can halve delivery times in both these markets. The US operation, based in Columbia, South Carolina will target the east coast with its colour catalogue containing around 35,000 lines. Chuck Yurko, US commercial director, claimed that catalogues in the US tend to be long lists of products and prices, offering four-day delivery. Farnell will offer photographs, full technical details and two-day delivery, he said. In Singapore, Farnell will guarantee next day delivery, or even the same day if the orders are received early enough. Farnell hopes to cover the whole of south-east Asia from its Singapore base within 12 months, according to chief executive Howard Poulson. Meanwhile, Farnell reported interim pre-tax profits up 149% at ú71.3m, on turnover that rose 11% at ú252.9m. Underlying profits were up 25% when adjusted for the ú35.3m profit from the disposal of Farnell’s manufacturing business in March (CI No 2,637). The sale boosted cash balances to ú70.2m at the half-way stage, compared with ú8.7m shortfall last time. The company has also been busy on the acquisitions front, acquiring Combined Precision Components Plc for ú30.5m in May (CI No 2,674). Farnell said CPC had been growing its catalogue-based electronic spare parts business at a compound rate of more than 15% over the past few years. The other part of the group, Farnell Electronic Services also performed well and Spelec, acquired in April for ú6.4m has been integrated into the low-volume, high margin business in France (CI No 2,650). Germany was the only blip, where profits rose sharply, but turnover fell. The shares were trading at 658 pence, up sevenpence on the day. Farnell looks set to make further acquisitions in Europe before the year is out, and should produce record figures at the year-end. However, Poulson was reluctant to shout it from the rooftops, saying merely that he was quietly confident that the year will be a good one, despite the integration costs of the new businesses. Farnell pays an interim dividend of 4.6 pence, up 21%.
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