23 April 2014 – interim results
As predicted in last month’s trading update, the group has reported lower than expected profits in the six months to 28 February with revenues down to £359.8m (2013: £391.3m) and underlying pre-tax profits declining to £29.6m (2013: £35.8m). Earnings per share on the same basis declined to 10.4p (2013: 11.9p), although the interim dividend was increased to 4.0p (2013: 3.75p). Although the Advanced Engineered Products business performed reasonably well, particularly in oil and gas, the Engineered Conveyor Solutions business suffered from caution in the US coal mining industry. The overall results were adversely affected by negative currency movements due to the strength of sterling against both the US and Australian dollar, the two major currencies in which the group generates revenues. Despite these disappointing results, a better performance is expected in the second half. Nevertheless, we believe there are better opportunities to invest elsewhere and we reduce our recommendation to HOLD.