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23 Oct 2008
Avnet has hinted it will continue to dip into its pocket for acquisitions, despite posting lower profits and slower growth for its last financial quarter.
For its fiscal first quarter to 27 September, the distribution goliath saw revenues rise just 0.9 per cent year on year on an organic basis to $4.49bn (£2.79bn). Growth including acquisitions stood at 9.7 per cent.
Operating profit dropped 6.5 per cent to $154.5m, while net profit also slid from $105.5m to $92.8m.
Further reading
Chief executive Roy Vallee said demand had remained “sluggish” in several markets, continuing the multi-quarter trend of muted organic growth.
Vallee also revealed that Avnet has initiated a further $50m in annual cost reductions, which are expected to be fully implemented by the end of the distributor's fiscal third quarter to March.
But he maintained that Avnet would continue to use its cash mountain to pick off smaller rivals.
Vallee said: “While the macro environment has necessitated these cost reductions to protect our income and margins, Avnet's strong, counter cyclical balance sheet and cash generation allow us to continue to invest in strategic opportunities that create long-term shareholder value and enhance our competitive position, as evidenced by our recent offer to acquire Abacus Group.”
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