Investment Column: Mixed fortunes in electronics
Tuesday 09 June 1998
Nevertheless, the business is not without its problems. In the UK, where Electrocomponents still makes three quarters of its sales, comparable turnover last year was up 5 per cent. Even though margins widened, profit growth only just made it into double figures. This from a company that in the past regularly posted earnings growth of 20 per cent or more.
Electrocomponents' response has been to beef up its operations in continental Europe and, more recently, Japan. On the continent, investment is paying off even though the strong pound dented the value of profits in sterling terms. But expanding in Japan will wipe pounds 30m off Electrocomponents' profits over the next five years.
This investment, and the cash Electrocomponents is pouring into its web site to allow customers to order electronically, make long-term sense but at the expense of medium-term growth. Merrill Lynch, the stockbroker, forecasts profits of pounds 128m in 1999 and reckons it will be three years before the company returns to double-digit earnings growth. On a forward PE ratio of 28 the shares, up 6.5p to 569.5p yesterday, are high enough.
The Independent's live blog of today's Premier League action
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 3 Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 4 Matthew Miller: American sentenced to hard labour in North Korea 'wanted to be Snowden II'
- 5 Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
4Chan naked photos leak: Celebrity Twitter reactions to the mass breach of privacy
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Archbishop of Canterbury admits doubts about existence of God
Portuguese academic says British are 'filthy, violent and drunk'
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