A game of two halves is how management at AZ Electronic Materials see 2012 as a tough end to last year continues in the months ahead. That caused the company's share price to dip 8 per cent post results, but all the growth drivers remain in place and a sharp recovery is expected in the second half.
Shares in the memory chip materials company had risen as much as 28 per cent since we picked the company as our takeover tip of the year (249p, 5 Jan 2012), so a little cooling off is understandable. Chip firm Elpida filing for bankruptcy protection won't have helped, either. Still, underlying cash profits grew 16 per cent to $261m (£165m) and margins were steady at 33 per cent.
Star of the show was AZ's integrated circuit (IC) niche unit where increasing demand for flash memory drove sales up a third to $352m and had cash profit margins at the core IC materials division nudging 41 per cent in the second half. Progress was less spectacular at the smaller Optronics business given demand from television manufacturers for its photoresist chemical slowed towards the end of the year, leaving divisional profits down 4 per cent.
Analysts at Deutsche Bank expects underlying EPS of 36¢ in 2012 compared with 35¢ last year.
AZ ELECTRONIC MATERIALS (AZM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 288p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 288-289p | 12-MONTH HIGH: | 338p | LOW: 202p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 18 | |
| NET ASSET VALUE | 197¢* | NET DEBT: | 46% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009** | 500 | -310.0 | -151.0 | nil |
| 2010 | 682 | -90.6 | -56.9 | nil |
| 2011 | 792 | 126.0 | 25.3 | 12.3 |
| % change | +16 | – | – | – |
Ex-div: 28 Mar Payment: 11 May *Includes intangible assets of $1.08bn, or 283¢ a share **Prior to flotation £1=$1.58 | ||||
