15 September 2011 – interim results

The group has produced excellent interim results for the six months to end July, with revenues rising 67% to £34.4m and pre-tax profits befroe exceptional items rising by 35% to £3.33m.  Earnings per share on the same basis were 6% higher at 2.38p as a higher tax charge and increase in the number of shares in issue took effect and the interim dividend was raised by 8% to 0.27p.  Net debt fell to £3.98m at the end of the period from £4.27m at the end of January.

These results have benfited from the acquisition of Hartest Holdings and the group has now established a solid platform on which to build.  Further progress is expected in the second half helped by the introduction of new products, further geographical expansion and the continuation of the streamlining of the UK business.  We are maintaining our forecast for the year ending 31 January 2012 at £6.7m for earnings per share of 4.7p which puts the share on a prospective p/e ratio of just 6.0x.  This is far too low and we believe the shares are due a serious re-rating and maintain our share price target of 66p.  BUY.