Penny-pinching Arrow Electronics UK cashes in during FY10

Distributor's stellar 2010 UK results reveal four locations closed in cost-cutting drive

Arrow Electronics UK drove up sales and reined in costs in an impressive set of 2010 numbers.

For the 12 months to 31 December, the components player increased UK sales 27 per cent year on year to £152m, while operating profit rose 88.2 per cent to £3.9m. This equates to an operational profit margin of 2.6 per cent, up from 1.7 per cent in 2009.

During last year the broadliner incurred £534,000 in exceptional charges, largely relating to redundancies and office closures. Arrow faced costs relating to staff departures and "the release of provisions no longer required" as some operations were wound up in Scotland, Crawley, Leicester and Southampton. In December the distributor also began subletting unused space at its Bedford office.

Arrow Electronics' directors' report for 2010 sounds a note of cautious optimism for the year ahead. The firm is forecasting more top- and bottom-line growth, but will continue to keep a tight rein on spending.

"Trading conditions in the UK have recovered in 2010 from the prior-year challenges and it is expected that this recovery will continue during 2011, although at a reduced rate," said the report. "2011 profitability should show further improvements as we see a further increase in sales and cost control, although there will be investment in the business to support further growth."