Q1 2007 Premier Farnell Plc Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good morning, ladies and gentlemen. Welcome to the Premier Farnell quarter one conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would now like to turn the call over to your host, Harriet Green.

HARRIET GREEN, CEO, PREMIER FARNELL: Good morning and welcome to the Premier Farnell results for the end of the first quarter. I am Harriet, the CEO of Premier Farnell and I am joined today by Mark Whiteling, our CFO, who will be taking you through some of the numbers in more detail and Lawrence Bain, our Chief Operating Officer, who will join us in taking questions at the end of the presentation.

The first quarter has been one of significant improvement as we continue to embed our new strategy that we announced last October. Embedding it into the business and delivering against the commitments that we made at that time. The results themselves continue to make good progress against last year and as such are very encouraging.

I would like to begin by sharing a summary of our highlights for the period, which ended the 29 of April. The implementation of our strategic plan is progressing well as we work to evolve and strengthen our position in the target areas. You will remember this is the focus on the global electronic design engineering market continues with further investments to attract and retain this critical customer group.

We have increased our stocked product range of the higher technology lines, added new niche franchises and focused on data and information excellence. All of these are critical in creating stickiness and effectively supporting this customer group where the challenges of shortened design cycles and time-to-market of their own products remain central.

Another important driver for all customers is the quality and speed of information and product availability via the Web. We launched our state-of-the-art Web front-end in the US during the fourth quarter with excellent results and during the first quarter, we rolled out the new platform across Europe and Asia and we are already starting to see the results of a strong global system. Web sales in the quarter are up 32% against the prior year, a growth trend we expect to continue.

Early in April, we successfully launched Premier Electronics, our newest business in greater China and completed the effective disposal of BuckHickman to the BSS Group, both within the time scales committed.

Finally this month, we launched a unique global environmental design challenge, Live Edge, the first contest of its kind targeting design engineers and attracting quite literally thousands of approaches every day.

Turning to the financial highlights, these again present a solid picture. Gross margin was up 0.4 of a point at 39.8% and this represents our sixth consecutive quarter of gross margin improvement. Overall sales growth in the quarter was up 4% on the prior year with sales per day accelerating through the period and setting new records in some parts of Europe.

Operating margin improved to 12.1% in the quarter compared to 11.7% in the prior year, further evidence of our robust cost control and strong operational gearing at 22%. Profit before …