Fenner's (FENR) shares rose over 4 per cent on the back of these figures after the industrial conveyor belt specialist boosted underlying operating profit by 30 per cent to £118.8m. However, weak demand earlier in the year from the US coal sector is only recovering slowly, while lower commodity prices may mean short-term margin pressure. Accordingly, broker Numis Securities has lowered forecasts for 2013 by 6 per cent and expects adjusted pre-tax profit of £103m, giving EPS of 35.8p (from £103.9m and 36.1p in 2012).
In the engineered conveyor solutions unit, turnover rose 16 per cent at £593.4m - reflecting high levels of coal and iron ore extraction. That helped the divisional operating profit to rise 38 per cent to £84.4m, with the operating margin having jumped 2.2 percentage points to 14.2 per cent. That strong performance was repeated in Fenner's advanced engineering products division, which provides such specialist parts as hydraulic seals and components for implanted medical devices. Turnover there rose from £207.6m to £237.2m and helped lifted divisional underlying operating profit 14 per cent to £43.6m, although the operating margin remained steady at 18.4 per cent.
Group cash generation remained strong at £63m - that covered £34.3m of acquisitions, helped cut net debt by £4.1m and supported a hefty dividend hike.
| FENNER (FENR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 365p | MARKET VALUE: | £706m | |
| TOUCH: | 364-365p | 12-MONTH HIGH: | 505p | LOW: 327p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 162p* | NET DEBT: | 30% | |
| Year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 438 | 36.3 | 15.5 | 6.60 |
| 2009 | 499 | 5.60 | 2.60 | 6.60 |
| 2010 | 553 | 37.2 | 14.6 | 7.20 |
| 2011 | 718 | 69.6 | 24.6 | 8.00 |
| 2012 | 831 | 88.6 | 30.3 | 10.5 |
| % change | +16 | +27 | +23 | +31 |
Ex-div: 30 Jan Payment: 4 Mar *Includes intangible assets of £221m, or 114p a share | ||||
