Alumasc dividend untouched

The sigh of relief that accompanied Alumasc' s decision to announce an unchanged dividend - a key reason for owning the shares - was clearly audible in the City and worth a 13 per cent hike in the share price. Otherwise, it was left to the precision engineering division to offset further weakness in building products and drive a 4 per cent increase in underlying profit before tax to £4.3m.

Indeed, growing demand from the mining sector for diggers and dumper trucks helped steer revenue at the early cycle precision business back to pre-recession levels, up 53 per cent to £36.7m, and more than double operating profits to £3m. Supplying weight-saving components used in engines and transmission systems to firms like Caterpillar - its largest customer accounting for 16 per cent of sales - means that exports now account for 20 per cent of revenue.

Chief executive Paul Hooper is keen to sell more overseas, especially at the building products unit where a £0.5m bad debt and sharp reduction in operating margins meant profit fell 30 per cent to £3.4m on rising sales. Cuts in government spending on construction have hurt Alumasc and signs are the industry won't recover until 2013 at the earliest.

Broker finnCap expects current year EPS of 10.7p (8.3p in 2011).

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