Scapa Group (SCPA), presumably like its bonding and adhesive products, goes from strength to strength. The Tameside group delivered an 80 basis point improvement in margins at the half-year mark, which translated into a 15 per cent increase in trading profits to £8.5m.
With the lion's share of sales generated abroad, foreign exchange movements have a major bearing on Scapa’s financial performance. First-half profits would have been up 29 per cent at constant currencies, but the more recent depreciation of sterling against the US dollar should now bolster statutory profits.
Scapa reported progress across all its divisions and regions, with noteworthy contributions from its healthcare business and the North American markets. The healthcare business posted constant-currency revenue growth of 18 per cent, and also launched a new unit, MEDIFIX Solutions, to exploit the $5bn (£3.2bn) wearable medical device market.
Delays on cable contracts linked to the tensions in Ukraine held back revenues at Scapa's key industrial division, although it still grew constant-currency profits by over 16 per cent. Sales of retail products, such as Renfrew-branded hockey tape, continued to improve through the period, while the global distribution business bounced back from a period of inventory destocking.
Numis increased its full-year EPS estimate by nearly 4 per cent to 8p (from 7.2p in 2013-14).
| SCAPA GROUP (SCPA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 135p | MARKET VALUE: | £198m | |
| TOUCH: | 131p-138p | 12-MONTH HIGH: | 150p | LOW: 90p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | na | |
| NET ASSET VALUE: | 36p* | NET CASH: | £1.7m | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 112 | 5.8 | 2.0 | nil |
| 2014 | 115 | 6.2 | 2.7 | nil |
| % change | +3 | +7 | +35 | - |
Ex-div: - Payment: - *Includes intangible assets of £27.5m, or 19p a share. | ||||
