Although Hayward Tyler's (HAYT) management had expected the financial year to March 2017 to be heavily second-half-weighted, even it expressed disappointment in the first-half profit numbers, after the group swung to an operating loss of £5.6m, compared with a profit of £2m in the comparable period last year.
The new factory in Luton, opened over the summer, has led to a significant rise in overheads, but so-far revenue generated by the site has failed to keep pace with the rising costs. As a consequence, gross profit margins contracted by a full 20 percentage points to 14 per cent.
Reported group revenue was on the rise, but it was boosted by the contribution from Peter Brotherhood, acquired in October 2015. On a like-for-like basis, revenue actually fell by a quarter. Although management can't point to any overriding reason for this fall "there have been a number of small problems", including a hot US summer and an earthquake in South Korea.
And yet the outlook is positive, and management remains confident of meeting its full-year revenue and operating profit guidance. Broker FinnCap has, however, downgraded its full-year forecasts to reflect higher debt, which has caused a rise in interest payments. Adjusted pre-tax profits and EPS for the March 2017 year-end are now expected at £6.3m and 8p respectively (from £5.1m and 8.1p in FY2016).
HAYWARD TYLER (HAYT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 80p | MARKET VALUE: | £44m | |
| TOUCH: | 78-81p | 12-MONTH HIGH: | 96p | LOW: 70p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 37.1p | NET DEBT: | 89% | |
| Half-yearto 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 21.8 | 1.6 | 3.3 | 0.55 |
| 2016 | 23.1 | -6.7 | -9.7 | 0.58 |
| % change | +6 | - | - | +5 |
Ex-div: 12 Jan Payment: 23 Feb | ||||
