Latchways' (LTC) shares fell 4 per cent on the back of these half-year figures after the safety harness specialist warned that full-year profits won't meet current expectations. That reflects weaker commercial construction activity in the UK and Europe, notably for vertical safety systems used by budget constrained utility and telecom customers. Indeed, revenue here fell 47 per cent and, while new budgets are in place for next year, the second half will also face tough comparatives after strong revenue growth the previous year.
However, the safety products division - accounting for three-quarters of group turnover and 91 per cent of operating profit - saw revenue rise 4.6 per cent to £15.8m, lifting operating profit there from £3.3m to £3.7m. That was despite a drop in UK construction activity and weak demand from Wingrip projects. These weaknesses were offset by strong demand for self-retracting lifelines, where sales jumped 93 per cent, thanks to various offshore wind projects. Moreover, solid gains were achieved in the US, where personal rescue device sales helped total revenue to rise 80 per cent. Meanwhile, cost savings helped to restrict the rise in administrative expenses to just 2.6 per cent, to £6.3m, and the group operating margin rose 19 per cent to 20.3 per cent.
Broker N+1 Singer has reduced its full-year pre-tax profit forecast from £11.2m to £9.8m, with EPS cut from 73.1p to 68.4p (from £10.3m and 70.2p in 2013).
| LATCHWAYS (LTC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,349p | MARKET VALUE: | £151m | |
| TOUCH: | 1,320-1,350p | 12-MONTH HIGH: | 1,413p | LOW: 940p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 299p* | NET CASH: | £10.4m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 18.8 | 3.57 | 24.0 | 11.0 |
| 2013 | 19.7 | 4.02 | 28.4 | 12.1 |
| % change | +5 | +13 | +18 | +10 |
Ex-div: 5 Feb Payment: 7 Mar *Includes intangible assets of £6.5m, or 58p a share | ||||
