Alumasc (ALU) delivered its best performance since the recession as product innovation, new staff and further forays into the buoyant London and south-east construction markets drove underlying operating profit up 16 per cent to £9m. Investors cheered the news, sending shares in the building product supplier up 7 per cent on results day.
New products and systems accounted for a fifth of full-year sales. Management's recruitment of "high calibre" staff also played a key role in driving growth. That was especially true for the group's roofing and walling segment: new talent helped it break into higher-growth markets and spurred a 22 per cent rise in divisional revenue.
Chief executive Paul Hooper is confident that the appetite for materials will remain hearty, especially as the UK construction market is forecast to continue growing. He also reckons Alumasc can capitalise more on demand for building products following the sale of the struggling precision engineering business and Pendock Profiles unit.
Those disposals, coupled with a 37 per cent jump in operating cash flow, pushed Alumasc's bank balance into the black. Management plans to use the war chest to make acquisitions and continue investing in new products and facilities. Broker Peel Hunt forecasts adjusted EPS of 19.5p in the year to June 2016 (up from 18.4p in full-year 2015).
| ALUMASC (ALU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 171p | MARKET VALUE: | £61m | |
| TOUCH: | 168-173p | 12-MONTH HIGH: | 179p | LOW: 116p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 45p* | NET CASH: | £0.9m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 107 | 5.4 | 10.7 | 10.0 |
| 2012 | 111 | 0.4 | 1.2 | 2.0 |
| 2013 | 117 | 2.8 | 5.3 | 4.5 |
| 2014 (restated) | 89 | 6.1 | 13.4 | 5.0 |
| 2015 | 98 | 7.0 | 15.0 | 6.0 |
| % change | +10 | +15 | +12 | +20 |
Ex-div: 1 Oct Payment: 28 Oct *Includes intangible assets of £19.3m, or 54p a share | ||||
