Sales boom lifts Electron House

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The Independent Online
Electron House, the electronic components distributor, pleased investors with a 29 per cent increase in the interim dividend against a background of sharply increasing demand.

Robert Leigh, chairman, said demand for electronic components in 1994 rose by an estimated 20 to 25 per cent. It helped Surrey-based Electron to record a 54 per cent jump in taxable profits to £2.5m (£1.6m), on sales up 27 per cent to £58.9m against £46.2m last time.

Earnings per share increased by 60 per cent to 6p (3.74p). The dividend for the six months to November rises to 1.55p (1.20p).

The shares advanced 5p to 170p as Electron reported second-half order books were 21 per cent ahead of last year. "We have over 15,000 customers and more and more electronic components are being used wherever you look," Mr Leigh said.

The components division raised profits from £2.7m to £3.3m on sales growth of 35 per cent. Traditionally, about a quarter of Electron's sales are with Intel, the world's biggest maker of semiconductors.

The systems businesses reduced their losses to £78,000 from £296,000, and have been breaking even since October. Electron said systems should make a profit for the full year.

Mr Leigh said difficulties encountered in the late 1980s in the semiconductor industry - now two-thirds of the group's business - were unlikely to be repeated.

He said the vastly increasing cost of producing sophisticated components was producing huge barriers to entry to electronics manufacturing.

This helped distributors because it meant there was little risk of general over-supply. "It can cost $1bn to build a microprocessor factory and this means only the biggest players can participate."

Electron's main UK market saw profits rise to £1.8m (£1.4m), while advances were also recorded in Australia and New Zealand.