Electrifying turnaround for once struggling parts distributor

THE British distributor of Raspberry Pi Electrocomponents surged to a 14-year high after it posted bumper half-year profits and hiked its fullyear cost savings target.

In the six months to September 30, underlying profits jumped 76pc to £55.1m, smashing last year’s figure of £31.3m, thanks to the sharp depreciation in the pound following the EU referendum and cost cuts. It also lifted its cost-savings target to £30m by March 2018, higher than a previous target of £25m.

The dramatic improvement in the interim figures can largely be attributed to chief executive Lindsley Ruth, who joined the FTSE 250 company in April 2015 and was given the onerous task of turning around the struggling electronics distributor.

Following the results, broker Numis revised its target price to 420p from 350p, while Peel Hunt upgraded its rating to “add” from “hold” and also upped its target price to 420p.

Although the mid-cap stock enjoyed currency tailwinds, Henry Carver, of Peel Hunt, said the self help and underlying trading momentum are “undeniable” and “a testament to the effectiveness of the management team”. Shares recorded their biggest one day rise since 2002 – up 81.4p, or 22pc, to 451.4p. On the wider market, the

FTSE 100 ended the day down 18.94, or 0.28pc, at 6,775.77 as the dollar’s strength weighed on miners. The dollar rose as investors bet on a December rate hike after Fed chairman Janet Yellen said the US central bank could raise rates “relatively soon” during her congressional testimony on Thursday. As the dollar strengthens it makes greenback-denominated commodities, such as copper and gold, more expensive to other currency holders.

In its wake, shares in precious metal producer

Fresnillo dropped 95p to £12.89, Randgold Resources slipped 295p to £57.90, and Polymetal International surrendered 26p to 762½p. Antofagasta shed 21½p to close at 666p, Anglo American fell 37p to £10.90, Rio Tinto tumbled 87p to £29.34, Glencore closed 5.8p lower at 261.9p and BHP Billiton lost 15½p to £12.64.

Meanwhile, Rolls-Royce fell for a third straight session after its nonexecutive director Alan Davies stepped down and Emirates revealed it had issues with an engine order. The FTSE 100 stock tumbled 41½p to 657½p.

Retailer Next was also among the laggards, down 105p to £50.90, following comments by its chief executive. Speaking to Bloomberg Television, Lord Wolfson said consumers should expect prices on the high street to increase by “5pc at most” from January as the pound’s weakness begins to feed through.

On the other side, shares in Costa Coffee and Premier Inn owner Whitbread rose 79p to £36.04 after broker Stifel lifted its rating from “hold” to “buy”.

Finally, shares in social housing investment trust

Civitas enjoyed its first day on the main market, rising 3p to 103p.