May Gurney's full-year figures revealed that strong growth from maintaining the UK's utilities and railways was compensating for ongoing public sector weakness. Group underlying pre-tax profit rose 17 per cent to £28.4m and management pushed though a chunky dividend hike – leaving the share price rating looking too low.
Increased spending on repairs and maintenance in the regulated water and gas sectors – together with the completed integration of the Turriff acquisition – meant that cash profit from the regulated unit grew by a hefty 58 per cent to £12.3m. That helped offset a weaker performance in the public sector business, where cash profits rose just 3 per cent to £17.8m after performance was hit by cuts to the schools budget and by problematic local council rubbish collection contracts – which are taking longer than expected to achieve profitability. Still, the group order book rose 7 per cent to £1.5bn and should deliver 76 per cent of expected revenues for 2012-13. What's more, there's a £4bn pipeline of bidding opportunities in the group's core markets.
Partly reflecting public sector sluggishness, broker Investec Securities has trimmed 2013's forecasts slightly and now expects pre-tax profit of £29.5m, giving EPS of 31.1p (2012: 24.8p).
MAY GURNEY INTEGRATED SERVICES (MAYG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 240p | MARKET VALUE: | £169m | |
| TOUCH: | 240-245p | 12-MONTH HIGH: | 305p | LOW: 220p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 132p* | NET CASH: | £11m† | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 437 | 17.0 | 18.2 | 4.60 |
| 2009 | 470 | 5.20 | 3.9 | 5.10 |
| 2010 | 483 | 18.4 | 19.6 | 5.50 |
| 2011 | 571 | 18.8 | 19.8 | 6.60 |
| 2012 | 695 | 19.3 | 20.5 | 8.42 |
| % change | +22 | +3 | +4 | +28 |
Ex-div: 20 Jun Payment: 31 Jul *Includes intangible assets of £79m, or 113p per share †Excludes obligations under finance leases | ||||
