Hot Features
Premium
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
Premier Farnell (LSE:PFL) is what is known in the trade as a “high-service distributor”. The high service bit was discussed in yesterday’s post (fast delivery, very broad range, small fiddly orders, knowledgeable staff, etc.). They are mostly focused on the R&D market – electronic design engineers – but have branched out.
The core business is marketing and distributing time-critical electrical and other technical components and goods for engineers who (a) design electronic systems, (b) maintain them, or (c) repair them.
Overview of electronic distribution
The world electronic distribution market has sales of around £300bn. It splits into three parts:
1. High-service distribution. This is small quantities of components delivered fast to those conceptualising, designing and prototyping electronic innovations, plus servicing, maintaining and repairing. Worldwide sales of this segment are £20bn. This is the Premier Farnell’s traditional market segment (it has sales of under £1bn). There are many small players and so despite having only around 5% of the world market both Electrocomponents and Premier Farnell are leaders. PF offers 600,000 products, with Electrocomponents offering slightly less.
2. Volume distribution. The distinction between high-service and volume is blurring as more business moves online, but this segment is more focused on greater volume for scheduled manufacture. PF is targeting small production runs by supporting innovation from design to prototyping then production, e.g. a low volume production run of aerospace electronics or medical electronics. It offers 40,000 products.
3. Mass volume. Serviced by component manufacturers directly.
Premier Farnell’s Divisions
The main brand for high-service low-volume business is element14 which has geographic branding as follows:
• Farnell element14. Serves 28 European countries.
• Newark element14. Supplies USA, Canada and Mexico with 500,000 in-stock products.
• Element14. Ten countries in Asia Pacific. The hubs are Singapore, Shanghai and Sydney.
• Farnell Ne………..
To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1.
