3 December 2012 – interim results
In the six months to 30 September the tube manipulation specialist reported a slight decline in revenues to £11.6m (2011: £12.4m), although an improvement in margins saw adjusted pre-tax profits rise to £855k (2011: £722k). Earnings per share on the same basis were 2.07p (2011: 1.66p) and the interim dividend was raised to 0.1p (2011: 0.07p). These are clearly very good results and the group ended the period with net cash of £1.13m (2011: £0.07m). The group is making good progress in establishing its manufacturing facility in China with the first products from this expected to be shipped later this month. The group noticed a slowing in demand in the second quarter and this looks set to continue in the second half – the position is not helped by the loss of the contract with Rolls Royce referred to previously which caused the share price to fall back. The group is actively seeking to replace this lost business but it now expects pre-tax profits for the year to be at a similar level to last year excluding China start-up costs. In the year to last March the group made £1.62m for earnings per share of 3.78p. It would appear that the group’s shares have excellent recovery prospects – BUY.