If you followed our well-timed buy tip last month (72p, 9 February 2012), you will not have been disappointed by these record full-year returns from specialist oil services provider, KBC Advanced Technologies (KBC). In fact, with the cash pile growing from £4.5m to £5.8m on the back of strong cash generation and a 20 per cent rise in underlying pre-tax profits, the board has rewarded shareholders with a hefty 22 per cent hike in the dividend.
While market conditions worked broadly in the company's favour, KBC still had to contend with early year disruptions brought about by the Arab Spring and the Japanese tsunami. In fact, it was a pick up in utilisation rates, and consequently margins, during the second half that really fuelled the profit growth. KBC experienced contrasting fortunes within its business strands with consulting revenues up by 9 per cent to £42.7m, while software revenues slipped by 6 per cent to £13m. The software contraction was due to contract slippage at the year-end, including one large renewal, although it is anticipated that these will be booked in the current half year.
Although KBC's year-end order backlog shrank from £59m to £49m, this is still impressive and is distorted by the record $42m (£26.5m) contract with Mexico's PEMEX booked in 2010.
Cenkos anticipates adjusted 2012 EPS of 8p (7.1p in 2011).
| KBC ADVANCED TECHNOLOGIES (KBC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 89p | MARKET VALUE: | £50m | |
| TOUCH: | 88-90p | 12-MONTH HIGH: | 90.5p | LOW: 57p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 58p | NET CASH: | £5.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 38.1 | 2.90 | 3.5 | 0.75 |
| 2008 | 52.8 | 5.39 | 6.4 | 1.35 |
| 2009 | 52.6 | 4.61 | 5.4 | 1.55 |
| 2010 | 53.1 | 3.65 | 4.0 | 1.85 |
| 2011 | 55.7 | 4.93 | 5.9 | 2.25 |
| % change | +5 | +35 | +48 | +22 |
Ex-div: 2 May Payment: 15 May *Includes intangible assets of £8.87m, or 16p a share | ||||
