Analysts in the UK don’t always publish earnings previews for quarterly or half-year periods. Therefore, the upcoming figures can only serve as an indication as to whether the companies’ full-year forecasts can be met.

Tesco (H1 earnings)

Tesco (LSE: TSCO) is the UK’s biggest supermarket. Apart from selling groceries, the retailer also has businesses in fuel, banking services, and mobile phone plans. It also has operations in several European countries. Tesco is set to reveal its H1 numbers for its six months performance ending August on 5 October.

The earnings preview for the FTSE 100 giant indicates a decline in the bottom line number for its full-year forecast. This is most likely due to the worsening cost-of-living crisis that will undoubtedly impact margins.

Excluding fuel, overall revenue saw a year-on-year decline in Q1. With fuel prices cooling since the last quarter and discounted grocers such as Aldi and Lidl taking market share, Tesco may see negative growth in this half. As such, expectations for earnings numbers on Wednesday are relatively modest. Tesco will have to surprise investors with better-than-expected numbers and margins for its share price to see any respite to its recent decline given the current market climate. This is unlikely to happen, so the supermarket will have to announce something revolutionary to sway investor sentiment.

Greggs (Q3 trading update)

Greggs (LSE: GRG) is a British bakery chain. The bakery is best known for its savoury products such as bakes, sausage rolls, sandwiches, and for sweet items that include doughnuts and vanilla slices. The Newcastle-based firm is expected to unveil its Q3 numbers for its three months performance ending September on 4 October.

Greggs doesn’t disclose revenue or earnings figures for its quarterly updates, so a direct comparison can’t be drawn this October. Rather, the pastry maker discloses metrics such as like-for-like sales and shops opened, which are useful indicators too. These can serve as an earnings preview for investors to determine whether the FTSE firm is on track to hit its ambitious growth targets by the end of the year.

Throughout the year, Greggs has acknowledged the impact of price pressures. Because of this, the board’s expectations for the full-year outcome remain unchanged as they do not expect material profit progression in the year ahead. That being said, investors will definitely be paying close attention to the outlook on Tuesday. Any downward revisions to earnings expectations could see the Greggs share price drop further as investor sentiment remains fragile after the most recent market turmoil last week.

RS (Q2 trading update)

RS (LSE: RS1) is a distributor of industrial and electronics products. Formerly known as Electrocomponents, the FTSE 100 company provides product and service solutions for designers, builders, and maintainers of industrial equipment and operations. RS is scheduled to report its Q2 numbers for its three months performance ending September on 6 October.

The distributor is only expected to release its full set of figures in its H1 earnings report on 3 November. For that reason, the upcoming trading update serves as an earnings preview for investors to get a couple of hints as to whether the FTSE company had a good first six months, and whether it’s able to hit analysts earnings estimates for the year ahead.

The news comes after an incredible month of trading for the company, which saw its shares jump 21.8%. And in the two-month period between 20 June and today, this FTSE 100 share has jumped 42%.

After the takeover rumour, JP Morgan upped the target for the firm to 1,250p, pointing to an upside of nearly 10% from current levels. Given this sudden spike in interest, here’s what I am doing about the RS Group share price right now. 

The takeover bid 

This £15-per-share bid, if successful, would take the market value of the company to £7bn. RS Group shares, currently trading at 1,150p, stand to gain over 30%. While this is an attractive upside for any investor, it is prudent to note that UK companies are often subject to bids and rumours. A lot of these rumours never materialise or the bids are rejected. 

Instead of rushing in to buy this FTSE 100 share, I will look at the fundamentals to judge if the company fits my portfolio.

Business fundamentals

The London-based electric engineering company specialises in automation systems for builders and industries. The company also produces a range of products like cables, electromechanical connectors, measurement equipment, and junction boards for IoT devices. 

Recent financials of the company look solid. While a lot of big businesses in the FTSE 100 are dealing with fluctuating commodity prices and supply chain disruptions, RS Group has been growing its margins and revenue.

For the financial year (FY) 2021/22, the firm’s revenue jumped 22.9% to £672m. Compared to 2020/21, the company managed to grow its profit margins by 26%. RS Group recorded a revenue of £2.55bn and generated a net income of £230m, which is 83% higher than the previous year.

This growth led to its share price hitting an all-time high of 1,276p in November 2021. And since 2018, the overall assets of the company nearly doubled to £2.1bn, which I think is a sign that the board is looking to reinvest excess capital judiciously. 

Concerns and verdict

RS Group share looks to be in a strong financial position. But it is susceptible to fluctuations in raw material prices. Copper prices have been trending upwards, which is a big part of electric components. The board has also identified supply chain disruptions as a potential roadblock in the coming months.

However, the company has demonstrated smart sourcing and has an efficient supply chain that has already navigated choppy waters. In fact, I am bullish on this FTSE 100 share because of its global presence and growing market share. Despite the concerns with the larger UK economy, I think the RS Group share price is attractive. If news of a takeover gets stronger, I would consider an investment at around the 1,200p level. 

Promotion to the FTSE 100

Electrocomponents supplies and distributes electronic, electrical, and industrial supplies and services to technical users and engineers across a multitude of industries. Some of these include automotive, IT, health and safety, and rail.

Electrocomponents recently joined the FTSE 100 due to a share price rally off the back of positive performance and market sentiment. As I write, shares are trading for 1,101p, whereas at this time last year shares were trading for 907p. This is a return of 17% across 12 months. Looking further back, the stock has returned close to 130% over a five-year period and has comfortably surpassed pre-pandemic levels.

Exciting 2022 ahead

All the signs point towards a fruitful year ahead for Electrocomponents. Firstly, it operates in a high growth market which is estimated to be worth close to £400bn. Even a small slice of this could be lucrative for Electrocomponents. In relation to this, there isn’t actually a single dominant player in the whole market which means there is a gap for one of the businesses, potentially Electrocomponents, to claim that mantle. It is believed that the top 50 businesses only account for 30% of the total market. There is definitely an opportunity here for Electrocomponents, and the hype surrounding its recent entry to the FTSE 100 could help boost profile and performance.

Electrocomponents currently accounts for 1% of the whole market and 5% of the UK market. It does have a competitive edge, however. It has a larger distribution network compared to most of its competitors. Electrocomponents has 12 distribution centres that serve 80 countries worldwide. This could help increase its customer base and boost performance and financials.

Electrocomponents recent and historic performance has been excellent. I understand past record is by no means a guarantee of future performance. Looking back, profits have risen an average 40% per year since 2016. Its most recent trading update, released last week for the third quarter ended December 2021, was positive too. Q3 like-for-like revenue grew by 21%. Key markets such as Germany and the US performed above expectations after re-configuring teams and investment to boost performance.

Risks and verdict

Macroeconomic factors are one of the biggest threats to Electrocomponents’ progress in 2022 and beyond. Supply chain issues as well as rising costs could affect performance and financials. This could definitely affect investor sentiment and share prices too. I noted that competitors in the marketplace are all vying for the spot to be the biggest fish in the pond. With so many players in the market, Electrocomponents could see performance affected.

I believe Electrocomponents is a worthy addition to the FTSE 100 and 2022 could be an excellent stock for my holdings. I would add the shares at current levels. It pays a dividend that would make me a passive income and seems to be on a roll in terms of performance and exceeding expectations. I think this could continue in the medium to long term ahead.

Rupert Hargreaves: Bloomsbury Publishing

Bloomsbury Publishing (LSE: BMY) is my top British growth stock for January. A rise in the demand for reading material through the coronavirus pandemic has generated windfall profits for the company over the past two years.

Bloomsbury aims to capitalise on this newfound love of reading in the years ahead. Analysts believe this will translate into earnings growth of 11% this year and 10% in 2023.

Of course, this growth is not guaranteed. Rising inflation could cause consumers to cut back on spending on non-essential items like books. Despite this headwind, I would buy the stock for my portfolio.

Rupert Hargreaves does not own shares in Bloomsbury Publishing.

Zaven Boyrazian: Frontier Developments

Frontier Developments (LSE:FDEV) is a game development studio and publishing house. It’s responsible for a popular collection of titles, including Elite Dangerous and Jurassic World Evolution.

The stock took a significant hit in 2021 after management lowered its revenue guidance due to underperforming sales. However, its first entry of the Formula 1 franchise is coming out later this year, along with multiple other projects through its publishing arm.

Personally, I think the lineup of new releases could drastically boost sales again. And with further franchise titles coming out in 2023, including Warhammer, the stock looks like it has excellent growth potential in my mind.

Zaven Boyrazian owns shares in Frontier Developments.

Royston Wild: B&M European Value Retail 

City analysts don’t expect B&M European Value Retail (LSE: BME) to record ripping earnings growth in the near term. In fact, they’re expecting profits to reverse over the next 12 months or so as supply chain costs balloon. It’s my opinion, however, that earnings could actually surprise positively as shoppers seek out bargains in this high-inflationary environment. Indeed, B&M’s trading statement in early January showed profits exceeding analyst estimates.

This FTSE 100 share is unlikely to be a flash in the pan. Discount grocers Aldi and Lidl have grown rapidly over the past decade as consumers prioritise value. Encouragingly, B&M is expanding rapidly to make the most of this opportunity, too.

Royston Wild does not own shares in B&M European Value Retail.

G A Chester: Gym Group 

Low-cost operator Gym Group (LSE: GYM) was expanding and delivering strong revenue and cash-flow growth before the pandemic. Inevitably, government-mandated shutdowns had a negative impact on the business. 

There remains some risk from coronavirus, but I think Gym is cheaply valued on its pre-pandemic cash flows. Furthermore, it’s well funded to exploit an unprecedented growth opportunity coming out of the pandemic. 

Due to large numbers of store closures in UK towns and cities, the company has been offered dozens of high-quality sites on attractive terms. Management has never seen the property market so favourable and is taking full advantage to accelerate expansion. 

G A Chester has no position in Gym Group.

Ed Sheldon: Sage

My top British growth stock for January is Sage (LSE: SGE). It’s a leading provider of cloud-based accounting and payroll solutions with a focus on small and medium-sized businesses.

I’m bullish on Sage for a couple of reasons. Firstly, I expect the company to benefit from the ongoing global economic recovery. Better economic conditions should lead to higher demand for the company’s accounting solutions.

Secondly, the valuation seems very reasonable. Currently, Sage sports a forward-looking P/E ratio of around 32. By contrast, US rival Intuit currently trades at around 50 times this year’s forecast earnings.

One risk to consider here is competition from Intuit and other players such as Xero. I think this risk is baked into the valuation, however.

Edward Sheldon owns shares in Sage and Xero.

Roland Head: Electrocomponents

Profits at industrial and electronic parts supplier Electrocomponents (LSE: ECM) have risen by an average of 40% per year since 2016.

According to CEO Lindsley Ruth, trading was strong during the third quarter. He now expects results for the year to 31 March to be ahead of broker forecasts. My sums suggest we could see earnings growth in excess of 40% in 2021/22.

The main risk I can see is that with the stock trading on 26 times forecast earnings, any disappointment could cause the shares to slide. However, I expect further growth.

Roland Head does not own shares of Electrocomponents.

Christopher Ruane:  S4 Capital

After strong growth for most of 2021, digital ad group S4 Capital (LSE: SFOR) fell in the final quarter. It had a weak start to 2022. Like S4 boss Sir Martin Sorrell, I have increased my holding this month.

One risk is the cost of integrating acquisitions eating into profits. But the company continues to grow aggressively, acquiring another US agency this month. For 2022 it is targeting 25% growth in both gross profit and net revenue. S4 is set to benefit from growing spend on digital advertising. 

Christopher Ruane owns shares in S4 Capital.

Paul Summers: Biotech Growth Trust

Last year was pretty awful for shareholders of minnow-focused Biotech Growth Trust (LSE: BIOG). As a patient, long-term investor, however, I’ve been taking this period of selling pressure as an opportunity to load up.

Whether 2021 will see a return to form is hard to say. On an optimistic note, directors believe the valuations given to small-cap stocks in the sector are now “very compelling”. A rise in merger and acquisition activity, the passing of price legislation in the US and increased regulatory approval of drugs (held up by the pandemic) could also spark a recovery.

Paul Summers owns shares in Biotech Growth Trust

Harshil Patel: Alpha FX 

My top British growth stock for January is financial solutions company Alpha FX (LSE:AFX). It’s a founder-led British business focused on two areas: foreign exchange risk management and alternative banking. 

Trading has been strong, and the company has proven sales and profit growth over several years. I like that it has a diversified client base and client numbers are also growing.  

I’d say not only is Alpha FX a growth stock, but it’s also a good quality business with a double-digit profit margin. 

With a market capitalisation of under £1bn, I reckon it has much room to grow further.  

Harshil Patel does not own shares in Alpha FX.

Nonetheless, I think this often overlooked UK tech stock could have an amazing 2022. It could even, in my opinion, earn investors a bigger overall return than Nvidia in 2022.

Outperforming Nvidia

The stock I’m thinking of is GB Group (LSE: GBG). It provides global digital identity and location services. That helps organisations validate and verify the identity and location of their customers. In a digital age, it’s very well placed to keep growing.

The most recent half-year results showed a 5.4% improvement in revenue to £109.2m. Its organic revenue at constant currency was ahead 12.6% at £108.7m.

It aims to be a global leader in its field and analysts seem confident. Barclays has set a target price of 1,000p for the company, compared to the GB Group share price of 729p at the time of writing.

The recent fall in the share price, I think, makes buying the shares all the more tempting. That’s especially as GB Group remains a growth share, despite its recent slowdown in revenue growth. When looking at its growth year-on-year, it’s in an attractive niche that also pays a dividend.

But the shares are expensive. As such, any slowdown in growth could see the share price slide. As with all tech, it’s reliant on innovation in a very competitive industry. There’s always a risk that newer and better technologies from rivals could undermine the company’s appeal and new competitors could emerge. That could potentially hurting margins. 

Another strong tech stock

Electrocomponents (LSE: ECM) is another under-the-radar share I really like. I owned some of the shares many moons ago, but recent results have once again caught my eye. The latest interim results showed like-for-like revenue growth of 31% year-on-year, or 22% versus two years ago, at the electrical products distributor.

It’s another company well positioned to grow as technology evolves, I feel. Electrocomponents has many strong customer partnerships. It says it has 1.2m customers in 32 countries, so it’s a serious global business and isn’t reliant on just a few companies for its revenues, as some other tech companies are. It has a long history too as it was founded in 1937. 

Analysts at Berenberg raised their target price from 890p to 1,230p following the results, showing their view on its improving prospects. Electrocomponents isn’t flashy or well known so its share price growth is likely to be steady compared to some of the better known technology companies. However, overall I think it is a very good business, as shown by its revenue growth. I may add it to my own portfolio. 

Of course, there’s no knowing if GB Group will do better than Nvidia in 2022. No investor has a crystal ball. The point isn’t to say that Nvidia can’t also be a very profitable investment, it’s an exciting company. However, I prefer GB Group with its lower P/E ratio and because it’s not involved in the under-pressure computer chip production industry.

Overall, I  just think GB Group has a lot of potential, could be set for a fantastic 2022 and I’m very much considering buying the shares.

Something’s going right for the distributor. And it’s not just a recovery from a year overshadowed by the pandemic in 2020. In fact, Electrocomponents sailed through last year with just a small dent in profits.

Decent operational progress

I think the strong move up in the share price reflects decent operational progress in the business. And City analysts predict robust, double-digit advances in earnings for the current year to March 2022 and for the year following that. But estimates can change if conditions alter for the business, so I’m not going to make investment decisions based only on those assumptions.

But I like several things about this business. The first is its wide international reach. The company describes itself as “global omnichannel provider of product and service solutions for designers, builders and maintainers of industrial equipment and operations.”  It stocks more than 650k industrial and electronic products and offers around 3m more that it doesn’t hold on its shelves. And my guess is the firm’s many customers from more than 80 countries appreciate the choice. The directors reckon the business enjoys a “market-leading reputation for service excellence.”

And evidence suggests that claim is likely true. For example, a second feature I like is the company’s multi-year record of steady, incremental annual growth in revenue, earnings, operating cash flow and shareholder dividends. I can’t think of a better way for a company to verify the growth of its business than to post good financial results.

So I find it encouraging to see more decent figures reported today. For the half-year to 30 September, revenue lifted by 33% compared to the equivalent period last year. And adjusted earnings per share shot up by 80%. The directors pushed up the interim dividend by 5%.

A positive outlook

Looking ahead, the company said momentum across all its trading regions continued into the first five weeks of the second half. The directors reckon ongoing growth in market share and strength in underlying markets is driving the progress.

However, it isn’t easy for the company to execute its operations at the moment. The external environment is “very challenging” because of supply chain difficulties causing shortages. And inflation is pressurising freight and labour costs. And I reckon there’s potential for such issues to derail progress and cause the business to miss its expectations for earnings. Indeed, nothing is certain when it comes to investing in stocks.

Meanwhile, the forward-looking earnings multiple is just over 24 for the trading year to March 2023. And the anticipated dividend yield is around 1.6%. That’s not a bargain valuation and, as such, adds more risk for investors. But it shows Electrocomponents has been recognised by the investment community for its long record of growth.

However, I reckon there’s likely to be more to come from this business because I’m bullish about the potential for general economic growth. So I’d aim to buy some of the shares on dips and down-days to hold for the long term as the growth story hopefully continues to unfold.

Post-pandemic boom

Kitchen supplier Howdens Joinery (LSE: HWDN) looks a good bet for promotion, especially after today’s well-received update on trading.

Having benefited from the home improvement boom, Howdens announced that this momentum had continued into the second half of its financial year. UK revenue from 13 June to 30 October 2021 was just under 21% higher than in the same period last year. This brings year-to-date revenue growth to a stellar 37.7%.

Positively, this performance wasn’t confined to Howden’s home market either. International sales growth was also strong, up 16.6% over the three quarters and 39.2% year-to-date. 

Based on this, Howdens now believes pre-tax profit for the full year will come in “around the top end of current analyst forecasts”. This would be somewhere in the region on £360m. That all sounds rather good to me. So, would I buy today?

Well, despite having climbed 43% in value over the last 12 months alone, HWDN shares still look pretty fairly valued. A forecast price-to-earnings multiple of 21 before markets opened for a high-quality market leader doesn’t seem excessive. After all, the company regularly posts excellent returns on capital.  

Then again, recent momentum could slow, particularly if consumers begin tightening their purse strings. Indeed, Howdens already expects a “more normalised trading pattern and performance in 2022“. There’s also inflation to ponder, even if the company appears to have been successful in passing on higher costs to its customers so far. 

Whether these headwinds are enough to delay Howden’s entry into the FTSE 100 is hard to say. As a Foolish investor focused on long-term returns, however, I must say that I continue to regard this company as a classy outfit. I’d have no issue taking a position in the stock today.

Primed for FTSE 100 promotion?

Another FTSE 250 growth stock that could potentially be moved to the FTSE 100 in the next reshuffle is industrial and electrical equipment distributor Electrocomponents (LSE: ECM).

Half-year numbers from the £5.3bn market cap company are due on Thursday. As things stand, I don’t expect much in the way of bad news for those already invested. 

Last month, ECM stated that trading had been strong in all regions in which it operates. In fact, total like-for-like revenue growth over the six-month period has already been estimated at 31%. That’s despite the Covid-19 ‘pingdemic’ and cost pressures many businesses are wrestling with. This led the company to predict that full-year revenue growth and adjusted operating profit margin would now be “slightly ahead” of previous guidance.

Shares change hands for almost 26 times forecast earnings. That’s not exactly cheap considering the pretty average margins in this line of work (roughly 8%).

Like Howdens, ECM will face tricky comparatives going forward, too. Profit is also likely to be “more weighted to the first half”. To me, this suggests things are as good as they’re going to get for now. 

Still, I can see why investors have been bidding the price up over the last 12 months. This presents as another well-run company with minimal debt. As such, it’s one I’d at least consider buying regardless of which index it features in. 

With that in mind, I’m on the lookout for companies that have to potential to produce large returns for investors in the years ahead. In my opinion, there’s one sector in particular that’s stuffed full of these businesses. 

Investing in the stock market rally 

One sector that’s benefitted more than most from the pandemic is technology. In the space of a few months, the tech sector has seen the sort of growth that previously would have taken several years.

There are only a handful of UK shares available to play this theme. One is Electrocomponents (LSE: ECM). This business is a global omnichannel partner for industrial customers and suppliers who design, build or maintain industrial equipment and facilities. It offers a range of tech solutions to help clients improve the customer experience, productivity and efficiency. 

Business has been on the up this year, and the company is using the extra profits to expand. It has recently announced two new acquisitions for a total of £160m. These should help complement growth in the years ahead. 

Electrocomponents has a strong track record of profits growth through acquisitions and organic expansion. Net profit has grown at an annual rate of 25% for the past six years. 

Based on its past success, I reckon this growth can continue. That’s why I suspect the stock could be a great purchase in the current stock market rally. Electrocomponents seems to me to be one of the few UK shares that can capitalise effectively on the global tech boom. 

A tech leader

Another UK tech stock I’d buy to profit from the stock market rally is Avast (LSE: AVST). Technology is becoming more and more advanced. Unfortunately, criminals are becoming more advanced as well. Some 65,000 attempts to hack small- to medium-sized businesses (SMBs) occur in the UK every day. 

This is where Avast comes into play. The company provides anti-virus software. As the world becomes more reliant on technology, this technology is going to become ever more critical. 

Therefore, I think the company is likely to see strong earnings growth for years to come. As one of the world’s best-known security software providers, Avast already has a strong brand which consumers trust. That should work in the firm’s favour to drive growth.

Indeed, thanks to its current position in the market, analysts are already forecasting a near 50% leap in earnings this year. As companies and consumers have been forced to move online in the pandemic, they have rushed to secure their systems with a brand they know well.

I think this is a sign of things to come, which is why I reckon Avast is one of the best UK shares to buy right now and hold forever. 

I ventured into the dank and cobwebby basement this morning at Motley Fool towers to rummage around the archives. After blowing off the dust, I discovered my previous article on the company was published at the beginning of February. Back then, I was cautious on the stock believing the valuation had raced ahead of itself and the business was vulnerable to cyclical shocks to the downside.

Profits down

It has to be said the shares have zig-zagged up a bit since February and now stand at around 624p, and that’s after today’s setback. The price compares to around 567p when the previous article came out last winter.

So, what are investors worried about in the firm’s news release today? Revenue rose by 7.3% in the six months to 30 September compared to the equivalent period the year before.

We can strip out the effects of currency movements and additional trading days that the company engaged in by looking at the like-for-like figure, which lifted by 4.5%. The directors said in the report its industrial sales “more than offset” a weaker performance from electronics. 

So far, so steady. But things didn’t go well for the firm with profits. And I’m going to look at the ‘best case’ figures, which I reckon are the adjusted ones. Indeed, the unadjusted figures show bigger declines. Operating profit came in an adjusted 1.5% higher, but the like-for-like figure dropped 2.1%. The operating profit margin slipped back by 0.6% and 0.8% when considering like-for-likes.

Meanwhile, adjusted free cash flow plunged just over 59% and net debt shot up almost 59% to nearly £221m. The balance sheet reveals to us that the increase in net debt is primarily due to more borrowings rather than falling cash levels.

Asset write-downs

Part of the outcome with profits occurred because Electrocomponents was caught up in British Steel Limited’s compulsory liquidation on 22 May. British Steel owed the firm money for goods it had already received and, sadly, the situation has led to £10.4m of assets being written down. Such setbacks are one of the risks and harsh potential realities of being in most businesses, from the smallest sole-trader to the biggest international conglomerate.

But the company is also ploughing capital back into its operations in order to remain competitive. There’s a transition programme, for example, moving operations from catalogue-led sales to digital sales, which is sucking funds into new IT systems.

However, some of the margin attrition is down to “product mix,” which I reckon is something to keep an eye on. Shrinking profits could be an early signal of tough trading ahead in a market where price-slashing and lower-margin goods are needed to stimulate sales.

Yet the directors slapped more than 11% on the interim dividend, suggesting confidence in the outlook and their expectation of “continued growth and outperformance over the medium term.” But I remain cautious on the stock for now.

Reaching for growth

One such company is Hollywood Bowl (LSE: BOWL), I believe. Just this week, it said it expects profit growth to be over 10% in the year to 30 September. It means full-year profit will exceed market expectations and that may result in higher payments to shareholders — both very positive pieces of news for the share price.

The 10-pin bowling centre operator said that all revenue streams contributed to the improving performance, which I think bodes well for the future. Hollywood Bowl also said product innovations, new bowling alley openings, refurbishments and a rebrand had paid off. It’s reassuring for investors that management has taken the right actions to achieve growth. 

The shares have a P/E of around 18, so high, but not excessively so for the rate of growth the company is seeing and investors get rewarded with a modest dividend as well. The yield is currently around 2.8% but with potential to grow as profits climb.

Solid dependable results

Another company that has been releasing positive news is electrical distributor Electrocomponents (LSE: ECM). It said earlier this week that first-half like-for-like revenue grew 5% on the back of a strong performance in its industrial division.

The latest positive news follows on from full-year results for the period ending 31 March 2019 which saw operating profit rise 16.5% and the full-year dividend jump up 11.7%.

The distributor is part of a market estimated to be worth £400bn and it’s one of the few truly global players with dominant market share. Growing that market share is something management is focusing on, which should help accelerate further growth in the future.

Looking at the five-year record of Electrocomponents, it’s clear management has been doing a great job. Revenue has risen from £1.27bn in 2015 to £1.88bn in 2019. Operating profit has near enough doubled over the same period.

Given this performance and future potential, I don’t think the shares are expensive trading on a P/E of under 17.

Going cheap

The last of the trio of high-performing companies I like is financial and administration services outsourcer Equiniti (LSE: EQN). Its shares look very cheap to me on a P/E of only around 11, despite a huge jump in profits at the group.

The outsourcer reported profit before tax of £11.6m for the six months ended 30 June, storming 222% higher than the same period last year, as revenue climbed 8% higher to £275.1m.

Other highlights from the results were: the double-digit growth from the US division, new client wins and strong customer retention. Alongside the positives of the business model which include recurring revenues and attractive margins I think there’s a strong platform for future growth at the group. 

The FTSE 250 company’s results followed a trading update earlier in the year which also contained positive news, showing clear momentum. That update stated in the outlook that the group’s activities are largely protected from wider economic conditions, so it kept its expectations for 2019 unchanged.