KBC Advanced Technologies – 63p

26 March 2013 – final results

The group has announced final results for the year to 31 December 2012 which have revealed a 13% increase in revenue which rose to £63.1m (2011: £55.7m) with underlying pre-tax profit falling to £5.5m (2011: £5.9m) as margins came under pressure.  Adjusted earnings per share for the year turned negative due to an exceptional tax adjustment.  The group ended the year with material net cash balances, partly due to an advance payment received at the year end for a new contract.  The last year was one of significant change at the group with a number of senior management changes whilst the group also restructured its operations.  The second half was much better than the first half as a result and a record level of contract awards were won during the year, with £82.9m of orders outstanding at the year end.  The new year has started well, benefiting from the restructuring and new orders that have been received, and pre-tax profits in the current year should increase to over £7m.  We expect a gradual re-rating of the shares as investors come to realise the attractions of the group and we rate them as a BUY.

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