Advanced Power Components (LON:APC) founded in 1982 is an AIM listed specialist distributor of electronic components. As a business, APC is split into a number of autonomous units, who supply a wide range of specialist components and equipment to a range of customers within different sectors such as, aerospace, defence, display technology and specialist industrial and commercial markets. More recently Advanced Power Components has followed a diversification strategy and has a controlling interest in two businesses within the energy saving products and technologies market.
Following a busy year end and having recently announced a significant £1.5m LED lighting contract with a supermarket chain for the Minimise brand, Mark Robinson the APC Chief Executive Officer has taken time out to discuss various aspects of the business, including, market assessment, positioning for growth, QV Controls, Minimise energy saving products and technologies including the much talked about imop™ and LED range:
Q1. What’s your general assessment as to the FY12 performance of APC and the electronic components market in general, are margins under pressure and do you foresee further consolidation?
In terms of the electronic component distribution business I would have to say that the financial year recently completed was disappointing. However, we shouldn’t lose sight of the fact that overall the Company would have been more profitable had we not made the decision to invest profits generated in our distribution activities to further develop our position in the sustainability sector.
The UK’s electronic component distribution market in general remains relatively weak and although we are only active in relatively specialist sectors we have seen pressure in the aspects of our business more associated with industrial and commercial markets. In these areas the available business has undoubtedly reduced and margins have tightened as a result. It seems likely that this pressure will continue through the rest of 2012 at least but we anticipate some improvement in market conditions when the general economy eventually starts to recover.
As regards further consolidation, historically there has always been an element of consolidation following a downturn and I don’t expect anything to be different this time around. We are continually on the look-out for opportunities to further develop the distribution side of our business but valuing businesses based on what might be considered to be exceptionally bad market conditions is very difficult and we remain acutely aware…
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