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Electrocomponents guides investors on impact of Trump tax

The company anticipates a minimal impact for the current financial year, though the group’s effective tax rate percentage is anticipated to belower in the next period
Donald Trump
Trump's tax changes came into effect this week

Electrocomponents Plc (LON:ECM) told investors that the US tax changes are expected to have a minimal impact on the group’s effective tax rate for March 31.

The company noted that it previously guided that the tax rate would be in line with the effective rate in the first half which was 28%.

READ: Electrocomponents making strategic progress but still fully-valued at this price

Nonetheless, the company also said it expects that the changes will result in a non-cash exceptional tax credit as a result of the revaluation of deferred tax balances.

READ: Electrocomponents shares up as it delivers stronger-than-expected revenue growth and upgrades profit forecast

Looking to the upcoming financial year, to end March 2019, Electrocomponents anticipates that the changes will reduce the group’s effective tax rate percentage to the mid-twenties.

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