2 December 2010 – preliminary results

The group has announced its preliminary results for the year to 30 September, showing revenue up by 12% to £144.7m (2009: £129.0m), whilst adjusted pre-tax profit has increased to £7.0m (2009: £6.5m).  Fully taxed and diluted earnings per share were 6.5% higher at 17.0p (2009: 16.0p) and the total dividend was raised by 9% to 4.8p (2009: 4.4p).  Net cash resources at the year end were £5.4m (2009: £6.3m).  The order book is at similar levels to last year at £115m.

These are excellent results given the challenging market conditions and represent the group’s fifth successive year of growth.  The Energy division has traded satisfactorily during the year, increasing operating profits, whilst Defence has traded exceptionally well almost doubling its operating profits.  The Process division has traded below expectations although steps have been taken to address this.  We continue to believe that the prospects for the group are excellent going forward – it is well positioned in key sectors in growth markets and should be a major beneficiary of the Nuclear New Build programme.  However, a cautious statement regarding prospects for 2011 with the possibility that big projects are deferred put a dampener on the shares which have hardly moved on the announcement.  Despite this, we continue to believe the shares have excellent long term prospects and maintain our recommendation of BUY.