Stagnant home improvement markets weighed on demand for Tyman 's (TYMN) door and window components in 2015. Fortunately, self-help measures more than compensated for flat top-line growth, driving underlying operating profit up 12 per cent to £51.4m.
Tyman implemented price increases across most of its product lines in North America, helping it to widen the divisional underlying operating margin from 16.5 per cent to 18.3 per cent. Stronger pricing discipline initially resulted in the group losing some customers, only to win them back towards the end of the year. The icing on the cake was the $8.5m (£6m) of cost and revenue synergies realised from the integration of Truth Hardware, 70 per cent more than was previously expected.
The UK business benefited from price rises, too, as well as success launching new kit including PVC window hardware. Efforts to widen the product range will be further enhanced by the acquisition of burglar alarms and CCTV specialist Response Electronics.
Tyman also acquired Giesse, an Italy-based manufacturer of hardware for aluminium windows and doors. The deal promises to extend its portfolio and give access to new regions including India and Turkey. Broker Liberum reckons Giesse could add about 9 per cent to EPS in its first full year.
Liberum expects adjusted pre-tax profit to increase from £44.9m in 2015 to £46.7m in 2016, the latter giving EPS of 19.5p.
| TYMAN (TYMN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 286p | MARKET VALUE: | £481m | |
| TOUCH: | 286-287p | 12-MONTH HIGH: | 339p | LOW: 221p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 62 | |
| NET ASSET VALUE: | 182p* | NET DEBT: | 27% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 230 | 1.3 | 6.2 | 3.5 |
| 2012 | 229 | -25.8 | -17.1 | 4.5 |
| 2013 | 298 | 0.8 | 0.6 | 6.0 |
| 2014 | 351 | 11.9 | 5.6 | 8.0 |
| 2015 | 353 | 15.6 | 4.6 | 8.8 |
| % change | +1 | +31 | -18 | +9 |
Ex-div: 21 Apr Payment: 20 May *Includes intangible assets of £340m, or 202p a share | ||||
