Fulcrum Utility Services (FCRM) chief executive Martin Donnachie is right to claim his team "has proved itself adept at turning this business around". The question now - particularly in light of a modest 2 per cent rise in revenue at the half-year stage - is where the top-line growth will come from.
Not that these financials disappointed the market. Shares in the energy and multiutility services group rose 28 per cent on results day, which brought news of a further £0.5m cost reduction, a maiden half-year dividend and a more than doubling of underlying cash profit to £2m. But if it wants further growth, Fulcrum knows it needs more projects such as the recent framework contract extension with British Gas, or the £4m deal to connect four whisky distilleries in Speyside with Scotland's gas network.
To do this, Mr Donnachie has doubled the size of his business development team and launched a new group focused on multiutility contracts for housing. The company also wants to continue building its lucrative estate of pipeline assets at current levels. In the six months to September, Fulcrum expanded its portfolio by 8 per cent, thereby increasing its annualised gas transportation income from £0.9m to £1.1m.
Following upgrades, broker Cenkos expects full-year adjusted pre-tax profit and EPS of £3.3m and 1.9p, respectively, up from £1.6m and 0.9p for the 12 months to March 2015.
FULCRUM UTILITY SERVICES (FCRM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 25p | MARKET VALUE: | £39.1m | |
| TOUCH: | 25-25.5p | 12-MONTH HIGH: | 25p | LOW: 7p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 1.8p* | NET CASH: | £5.6m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 16.8 | -0.2 | -0.1 | nil |
| 2015 | 17.1 | 1.6 | 1.0 | 0.3 |
| % change | +2 | - | - | - |
Ex-div: 24 Dec Payment: 22 Jan *Includes intangible assets of £2.7m, or 1.7p a share | ||||
