New products, past acquisitions and greater capacity drove constant-currency sales up a tenth at Porvair (PRV) in the reported period, sending operating profit up 6 per cent to about £4.8m, as the specialist filtration group continued to make inroads into the aviation, industrial, energy, environmental laboratory and molten-metal markets.
Sales and operating profit jumped 15 per cent in the microfiltration business. That reflected double-digit growth in revenue from the aerospace and Seal Analytical business, as the group won work with Airbus and Boeing and rolled out new products. The division also launched a joint venture with Mascot Dynamics that promises to deepen its foothold in India, a key growth market. By contrast, constant-currency sales and profit slid in the smaller metal filtration business, as low metal prices weighed on equipment investment among aluminium smelters. But the division's patented products won market share in the US and Europe, and it renewed an exclusive, multiyear contract to supply aluminium filters to metals giant Alcoa.
Porvair shelled out £2.9m for peer TEM, marking its entry into the microelectronics industry. Moreover, management almost doubled capital spending to £2.7m as it fitted out new US and Chinese facilities and boosted manufacturing capacity in the UK.
Broker Peel Hunt expects pre-tax profit of £9.4m in the year to November 2016, giving EPS of 16p (from £9.2m and 15.5p in FY2015).
| PORVAIR (PRV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 335p | MARKET VALUE: | £150m | |
| TOUCH: | 330-338p | 12-MONTH HIGH: | 350p | LOW: 280p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 140p* | NET CASH: | £7.2m | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 46.3 | 4.2 | 6.9 | 1.30 |
| 2016 | 52.1 | 4.5 | 7.5 | 1.40 |
| % change | +13 | +7 | +9 | +8 |
Ex-div: 28 Jul Payment: 2 Sep *Includes intangible assets of £47.7m, or 107p a share | ||||
