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November 10, 1993

RESTRUCTURED ELECTROCOMPONENTS PROSPERS DESPITE DIFFICULT MARKETS

By CBR Staff Writer

Electrocomponents Plc, the name behind the ubiquitous RS mail order catalogue is doing well following the disposal of its Misco computer catalogue business. The Misco sale caused the 3.9% drop in turnover, but take that out of the picture and turnover in the continuing businesses was up 13%. The picture the London-based company is one of almost unalloyed good news, though its rather curious garden-shed business is still slow. On the electronics side, however, the company reports growth in both the UK and most of the newer continental arms of RS. UK sales grew up 11% and with increased net margins. The board has decided to plough UKP35m over the next three years to support growth in the UK and expand the international business; significant amounts are to be spent on its central Corby site, and the company is building a new distribution facility in the Midlands. The company has also been gratified by the extent which the RS catalogue concept has been accepted overseas: RS International sales grew by 40%. Despite the fact that earlier in the year the company was bemoaning the state of the German economy, it now says that though the slump affected expected sales during the summer, they are now growing strongly. Similarly the French Radiospares Composants division is reported to be turning in exceptional growth, despite deepening economic gloom. However Austrian and Danish sales have been hit by the climate. Cash balances for the group rose to UKP51.9m, from UKP36.8 at the end of March. Electrocomponents has increased the interim dividend by 0.5 pence to 2.5p but says this is partly to iron out the previous disparity between interim and final payments.

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