Premier Farnell choice does not convince City

Premier Farnell choice does not convince City
Alex Mayhew-Smith Electronics distribution group Premier Farnell has finally appointed a chief executive. John Hirst takes up the role which has been vacant since the beginning of the year, when previous chief executive Howard Poulson left the company. The announcement, made at Premier Farnell’s annual general meeting, did little to allay fears among investors with shares falling to a low of 298.5p from 365p, after the appointment. City analysts warned that the appointment of Hirst, who is relatively unknown, would do little to boost confidence in the company. Hirst, who is currently officer to the ICI executive in London, will take up the position at the beginning of July. Malcolm Bates, Premier Farnell’s chairman responded by saying that Hirst had the right business skills and international experience for the job. Investor gloom was also due to a warning by the company that there had been a “marked softening” in recent months in the North American and UK markets served by the company’s catalogue distribution division. The division makes up two thirds of the company’s business. Hirst’s first task will be to tackle last year’s 15 per cent fall in operating profits at the UK catalogue division. There are also indications that changes will be made in the organisation of the group’s Anglo-US activities. According to Morton Mandel, Premier Farnell’s deputy chairman, there may be reorganisation in the firm’s global component distribution business. Poulson, who was responsible for the company’s $1.85bn acquisition of US distributor Premier two years ago, said at the time that it could take as long as seven years before the full potential of the global business would come to fruition. Some investors opposed the deal at the time, arguing that the company was paying too much. Meanwhile, shares in rival electronics distributor group, Electrocomponents, fell after the company admitted that the past two months had been tough for them as well. However, shares only dropped five per cent for the company, which said that it had dealt with the market problem by adding to its products portfolio.


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