Stadium Group – 42p

12 March 2013 – Final Results

Disappointing final results have been reported by Stadium for the year to 31 December 2012.  Revenues declined to £41.0m (2011: £44.9m) and adjusted pre-tax profits fell to £1.44m (2011: £2.64m).  Earnings per share on the same basis fell to 3.1p (2011: 6.5p) and the total dividend for the year was maintained at 2.8p.  The year was difficult for the group as trading conditions remained challenging but a considerable amount of restructuring took place with the sale of the surplus Hong Kong building, the acquisition of IGT, the rationalisation of UK manufacturing operations and the consolidation of the Asian activities into mainland China.  The group also appointed a new finance director.  The costs involved in all of this restructuring were offset by the gain on the sale of the property in Hong Kong.  The effect of the restructuring will be to create a more efficient business and although current trading remains challenging both sales and profits are expected to increase this year.  Assuming adjusted pre-tax profits of £2.5m for the year for earnings per share of 5.8p the shares look good long term value even though the dividend may be reduced to 2p.  The shares remain ATTRACTIVE.

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