may be 51 in stockmarket years, but that's been no barrier to an extended share price run more akin to a young tech company.
This stalwarthas now risen by almost 300% since 2015, with today's 11% post-results surge keeping Electrocomponents on course to revisit the 800p level last seen during the dotcom boom.
The latest rally for the supplier of more than 500,000 industrial and electronic components comes after full-year profits bettered expectations, even though this guidance was only upgraded six weeks earlier. The surplus of £173.1 million was 35.2% higher than 2017.
There was the added bonus for investors of a major acquisition - remarkably, the company's first in two decades - and the launch of the second phase of its performance improvement plan.
Source: interactive investor Past performance is not a guide to future performance
Taken together, Numis Securities thinks there's reason to add between 9% and 11% to its full-year 2019 and 2020 earnings per share (EPS) forecasts, taking them to 34.6p and 38.8p respectively.
Analyst Julian Cater also lifted the broker's target price from 705p to 780p. He pointed out that Electrocomponents' growth had been well ahead of underlying markets, driven by a 6% increase in customer numbers and steady growth in average order value.
Margins continues to impress, increasing by 0.6 percentage points in the last financial year to 44%. This progress was achieved despite no second-half repeat of the FX benefit seen a year earlier.
The company, which has moved its head office from Oxford to a new digital hub and HQ in King's Cross London, also benefited from £30 million of annual savings from the first phase of the performance improvement plan launched in 2015.
Electrocomponents will now look for a further £12 million of savings by March 2021, with £4 million in the current financial year. This will be generated through a new simpler regional structure and more customer-centric organisation.
The acquisition of IESA for £88 million will enable it to offer additional capabilities to corporate customers in areas such as sourcing, transaction process and inventory and stores management. The deal is expected to be EPS accretive in its first full year of ownership.
Strong free cash flow of £105.1 million in the last financial year helped cut net debt to £65 million from £112.9 million. The total dividend of 13.25p per share is 7.7% higher than a year earlier and covered 2.1 times by adjusted earnings.
The company also reported an encouraging start to the 2019 financial year, with strong revenue growth in the first seven weeks despite tough trading comparatives. All trading regions are continuing to see good revenues growth and market share gains.
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