29 September 2011 – interim results
The industrial services and rental group has announced interim results for the six months to 30 June showing group revenue up by 45% to £11.4m (2010: 7.8m) and pre-tax profits up by 41% to £2.0m (2010: £1.4m). These results include a first-time contribution from Tasman which was acquired in July 2010 and excluding these and other one-off costs revenues rose by 5% and pre-tax profit by 1%. Earnings per share fell slightly to 10.8p (2010: 11.5p) due to the increase in the number of shares in issue following the Tasman acquisition although the interim dividend was raised to 1.75p (2010: 1.55p) demonstrating the board’s confidence about future prospects. Strong cash flow meant that gearing reduced to 17% at the end of June (2010; 31%).
Despite the uncertain economic environment, the group’s high margin rental business continues to experience strong demand whilst there has been an increase in demand for equipment sales. Although these are lower margin, demand has been at record levels and this will help offset any downturn in rental income. The group continues to search for growth opportunities and has invested in start-up operations in the USA, France and Singapore. In addition, it has the firepower to make acquisitions should suitable opportunities arise. We maintain our recommendation of BUY.