Diploma feels squeeze in electronics market

Diploma feels squeeze in electronics market
Richard Wilson
Restructuring at merged distributor SEI/Diploma has yet to make an impact on the bottom line for parent Diploma Group, which has seen a 10 per cent fall in operating profit for its electronics business in the last six months.
According to company chairman, Christopher Thomas, the restructuring of the distribution business, which includes Macro Group, has been carried out against the background of a flat and competitive market place.
“Margin pressures have continued unabated and in spite of increased sales revenues, operating profits have fallen,” said Thomas. “To put this in perspective,” added Thomas. “Our electronic component activities, though representing over 60 per cent of electronics division sales, account for only some 30 per cent of divisional profits.”
He was confident that the strategic alliance with pan-European distributor SEI and Marshall of the US would provide long term benefit to the group. Sales in Diploma’s electronics businesses grew by 18 per cent in the first half of the year to ?96m, but the impact of the components market cut operating profit by 10 per cent to ?5.7m for the same period.

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