Companies: ACL   

Acal's share price took a pounding as it posted weaker interims to September, with pre-tax profits dropping off by 7% to £5.5m on a 2% fall in sales to £124.4m. On the flip-side there was some dividend growth for followers to cheer, with the interim payout lifting 3% to 7.2p. The technology distribution group continued to experience tough markets during the half, although Acal did enjoy 12% sales growth and a 33% hike in EBITA at its components division. This arm of the business performed in line with expectations, enjoying the benefits of new supplier wins, and reporting bright spots in the defence, aerospace, security and medical markets, as well as signs of improvement in telecoms. Acal also enjoyed growth at the industrial controls division. Unfortunately, all this good work was offset by a 12% sales wane and a 25% EBITA slump in its IT divisions, caused by margin pressure on IT products and a slower-than-expected introduction of new products. Here, the main problem was 'significant' price erosion and margin pressure in the storage networking business. Overall, Acal's outlook looks uncertain and management urges caution 'regarding the near-term outlook', complaining there are few signs of improvement in its major markets. The shares are best avoided for now.