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Electrocomponents sees half-year profit up 27 percent

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(Reuters) – Electrocomponents Plc <ECM.L>, the UK’s largest industrial distribution firm, on Thursday forecast a 27 percent jump in first-half adjusted pretax profit, led by strong growth in its own-brand business RS Pro.

Shares of the 90-year-old company rose 5.5 percent to 758 pence by 0715 GMT and were the best performers on the FTSE Midcap Index <.FTMC>.

The company, which has been cutting costs and simplifying its business structure, especially in Asia Pacific, said it plans to invest in both digital and customer acquisitions in the region.

RS Pro, the company’s own-brand electric and automation tools business, outperformed the group with like-for-like revenue growth of 12 percent in the first half ended Sept. 30, Electrocomponents said.

The company has been beefing up the high-margin RS Pro unit, which sells various electrical products from screwdriver sets to switches.

Electrocomponents said it remains on track to deliver 4 million pounds of cost savings in the current financial year under a turnaround led by Chief Executive Officer Lindsley Ruth, who took charge in 2015.

The turnaround has propelled the company’s stock over the last couple of years to levels last seen around the dotcom bubble and led to a threefold increase in like-for-like revenue.

Electrocomponents, which supplies Raspberry Pi – a low-cost credit card-sized computer, expects adjusted pretax profit to rise to 100 million pounds for the six month period, from 79 million pounds a year ago.

(Reporting by Shariq Khan and Muvija M in Bengaluru; Editing by Sunil Nair)

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