Speciality plastic supplier
Splitting out acquisitions and currency impacts, like-for-like revenue increased by 11 per cent and, reflecting a tight rein on costs, gross margin edged up, too. All divisions reported growth but the stand out performer was filter products thanks to robust cigarette demand, boosting underlying revenues by 17 per cent to £234m and lifting operating profits by 23 per cent to £28.9m. Mr Day said most of the growth came from China and India combined with signs of a recovery in North America, while Europe "held its own".
Acquisitions and increased capital spending caused free cash flow to dip by £9m to £44.4m, but in reflection of an upbeat trading outlook the final dividend was raised by almost 20 per cent. Broker Canaccord Genuity forecasts current year adjusted pre-tax profits of £106.5m and EPS of 35.9p (from £95.8m and 31.7p in 2012).
|ORD PRICE:||602p||MARKET VALUE:||£1.3bn|
|TOUCH:||603-606p||12-MONTH HIGH:||607p||LOW: 401p|
|DIVIDEND YIELD:||2.1%||PE RATIO:||24|
|NET ASSET VALUE:||111p*||NET DEBT:||68%|
Filtrona's shares are rated on 17 times forecast earnings, which is in line with sector peer Diploma. Management have an excellent track record, but based on EPS growth of 13 per cent this year and 10 per cent in 2014, the earnings story looks priced in. Hold.
Last IC View: Hold, 478p, 1 August 2012