The transformation of Scapa (SCPA) from self-help story into growth play continues to exceed all of its expectations. Against a backdrop of global economic uncertainty, the manufacturer of bonding tapes enjoyed success across all its geographic regions and business segments.
The expansion of its healthcare range, including the launch of a "game-changing" advanced wound-care product, drove an 8 per cent increase in the division's constant-currency sales. Management continue to invest in new products and are very excited about the acquisition of First Water, a healthcare business that specialises in hydrogels.
A customer-centric approach, meanwhile, saw Scapa's industrials segment counter challenging markets with a 7 per cent increase in constant-currency sales. Boss Heejae Chae says it was a "breakthrough" year for industrials and outlined plans to reduce the number of facilities from 14 to about eight. He expects this to drive profit growth and take margins into double-digit territory.
Overall, underlying operating profit grew 27 per cent. That reflected a percentage-point jump in adjusted group margins to 7.9 per cent, thanks to cost control, improving customer engagement and a strategic approach to pricing.
Broker Numis upgraded its adjusted pre-tax profit forecast for the financial year to March 2016 by 4 per cent to £19.8m, giving adjusted EPS of 10p (from £17.9m and 9.1p in 2014-15).
| SCAPA (SCPA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 180p | MARKET VALUE: | £ 265m | |
| TOUCH: | 179-182p | 12-MONTH HIGH: | 181p | LOW: 110p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 42p* | NET DEBT: | 6% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 192 | 6.1 | 2.4 | nil |
| 2012 | 196 | 10.5 | 4.5 | nil |
| 2013 | 209 | 9.6 | 0.8 | 0.5 |
| 2014 | 226 | 11.2 | -4.6 | 1.0 |
| 2015 | 236 | 13.7 | 6.5 | 1.5 |
| % change | +4 | +22 | - | +50 |
Ex-div: 23 Jul Payment: 21 Aug *Includes intangible assets of £39.5m, or 27p a share | ||||
