27 September 2012 – interim results
In the half year to 30 June, revenues at the group increased by 25% to £14.2m (2011: £11.4m) despite the challenging trading conditions. However, a change in the mix of sales has led to lower operating profit and pre-tax profits have declined to £1.4m (2011: £2.0m). Earnings per share fell to 6.7p (2011: 10.8p) but the interim dividend was increased to 1.85p (2011: 1.75p). The first half saw significant investment in hire fleet and new factory premises of £6.4m (2011: £1.7m) leading to gearing at the period end of 47% (2011: 16.8%). A very confident statement tegarding the second half which the group expects to be the most profitable in its history augurs well. Large rental contracts delayed from the first half will see the product mix move back in favour of rental with an increase in margins whilst the return of capital expenditure to more normal levels will benefit cash flow. The shares are a BUY.