28 September 2011 – interim results

In the six months to 30 June, sales have risen by 6% to £10.2m (2010: £9.6m) although adjusted pre-tax profits have fallen slightly to £505k (2010: £564k).  The fall in profit is largely due to increases in raw material costs although the effect of these has now been largely mitigated.  Basic earnings per share fell to 12.8p (2010: 17.2p).   Net cash at the end of the period has increased to £1.1m (2010: £0.5m) despite the group maintaining its investment programme.  The group has stated that despite the increased cost of raw materials it expects full year profits to be well ahead of current market forecasts.  We have upgraded our pre-tax profit forecast to £1.1m for earnings per share of around 33p – the shares are too cheap and are a BUY.