A series of unusually large projects worth about £20m flattered these full-year numbers from Porvair (PRV), but even stripping them out revenues still grew 9 per cent. That reflects rising demand in key areas such as gasification, water analysis and aviation, as the filter manufacturer's strategy of taking niche positions in growing regulated markets continues to pay off.
Buoyant demand gave management the confidence to invest £5.1m in capacity expansion projects. It expects to open a new UK plant and extend a US one this spring, and plans to invest further in US and Chinese production facilities over the next year. Chief executive Ben Stocks reckons expansion will enable Porvair to continue its impressive run of slashing debt and growing earnings. Strong cash flow laid the groundwork for the group to more than triple capital spending, move into the black, raise its dividend and make several small acquisitions last year.
Order intake, too, shows no sign of slowing. Aside from a bumper $10m (£6.7m) gasification project due for shipment in 2016, Porvair announced a spare parts contract to provide filter elements to installations in the US, India and South Korea. Similar contracts are likely to follow as projects entering the commissioning phase require extra replacement parts and servicing.
Broker Peel Hunt expects adjusted pre-tax profit of £9m in 2015, giving adjusted EPS of 15.1p (from £8.4m and 14.2p in 2014).
| PORVAIR (PRV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 300p | MARKET VALUE: | £133m | |
| TOUCH: | 295-301p | 12-MONTH HIGH: | 345p | 240p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 118p* | NET CASH: | £5.3m | |
| Year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 63 | 3.1 | 5.2 | 2.3 |
| 2011 | 68 | 4.5 | 7.3 | 2.4 |
| 2012 | 76 | 6.3 | 10.1 | 2.6 |
| 2013 (restated) | 84 | 7.6 | 12.3 | 2.9 |
| 2014 | 104 | 8.4 | 14.4 | 3.2 |
| % change | +23 | +10 | +17 | +10 |
Ex-div: 29 Apr Payment: 5 Jun *Includes intangible assets of £43.2m, or 98p a share | ||||
