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UPDATE 2-Electrocomponents ups profit view after strong Q4

Published 04/07/2011, 04:22 AM
Updated 04/07/2011, 04:24 AM

* Sees full-year pretax marginally ahead of previous view

* Sales in final quarter up 17 percent

* Says business in Japan not directly affected by earthquake

* Shares up 1.3 percent

(Adds CEO comment, analyst reaction, shares)

By Paul Sandle

LONDON, April 7 (Reuters) - British electronics parts supplier Electrocomponents Plc said it was on track to marginally beat its profit expectations for the full year after sales grew 17 percent in the final quarter.

The company, which sells products ranging from batteries and cables to IT books and safety equipment, said on Thursday full-year sales would exceed 1 billion pounds ($1.6 billion) for the first time, helped by growth online.

Pretax profit consensus for the year to end-March is for 112.2 million pounds, according to a Thomson Reuters I/B/E/S poll.

Chief executive Ian Mason told reporters profit would be slightly ahead of consensus, but would not beat it by as much as 5 percent.

The company, which ships 40,000 orders a day, is growing online sales to help boost profit.

"E-commerce revenue grew by 34 percent (in Q4) and now represents 53 percent of group sales," Mason said. "We are well on our way towards hitting our 70 percent target."

Shares in the company, which competes with Premier Farnell, were 1.3 percent higher at 271.7 pence at 0810 GMT, outperforming a 0.3 percent weaker index of medium-sized companies.

Analyst Andy Brown at Panmure Gordon said positive trading momentum had continued into the fourth quarter.

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"Gross margin had been maintained, while a better performance on costs means that full-year results will be marginally ahead of previous management expectations," he said.

"While this may prompt small upgrades, the shares have had a good run so we stay neutral."

The group said its business in Japan was not directly affected by the earthquake in mid-March and its team in the country had continued to meet its customers' and suppliers' needs.

Mason said the breadth of the group's suppliers would limit any the impact of any parts shortages. "We have about 2,500 suppliers so if we have an issue with one supplier we have alternatives we can offer our customers," he said. (Additional reporting by Neil Maidment; editing by Ben Hirschler) ($1 = 0.6116 pound)

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