Join our community of smart investors

Hyder Consulting rides pick-up in UK projects

RESULTS: Hyder Consulting is heading in the right direction and the shares still looks cheap for its sector
November 20, 2013

Hyder Consulting's (HYC) first-half adjusted operating profit fell 11 per cent to £10.6m, reflecting the weaker Australian dollar - that offset an encouraging performance in the UK and Middle East. But UK operating profit surged 164 per cent to £3m on the back of improving market conditions. "We are seeing a strong commitment to expenditure on [UK] capital projects," says chief executive Ivor Catto. He notes that both the public and private segments are robust with positive conditions in road, rail and energy - all areas where the engineering consultancy group is well established.

IC TIP: Buy at 570p

The Middle East also turned in a strong showing with operating profit up 39 per cent to £3.8m. Road and rail projects in Qatar and Saudi Arabia are keeping the group busy and there has been a pick-up in property market activity in the United Arab Emirates. Australia was tougher as a general election brought uncertainty, but bidding activity has picked up since the election, with the Australian order book expected to benefit in the fourth quarter. The group's overall order book grew 24 per cent year-on-year to £438m.

Broker Numis Securities expects full-year pre-tax profit of £21.1m, giving adjusted EPS of 42.6p (from £21.6m and 42.3p in 2013), rising to 47.2p in 2015.

HYDER CONSULTING (HYC)

ORD PRICE:570pMARKET VALUE:£222m
TOUCH:568p-580p12-MONTH HIGH:580pLOW: 375p
DIVIDEND YIELD:2.2%PE RATIO:21
NET ASSET VALUE:226p*NET CASH:£6m

Half-year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20121509.9419.94.0
20131507.7115.94.5
% change--22-20+13

Ex-div: 11 Dec

Payment: 16 Jan

*Includes intangible assets of £44.4m, or 114p a share