Growing the order book has been a priority for Fulcrum Utility Services (FCRM), and it looks to be paying off. The book grew 39 per cent over the reported period to £30.3m, helped in large part by a £4.2m contract to install a gas pipe for a food manufacturing plant. Efficiency measures bolstered returns for the year, expanding the gross margin by 480 basis points to 40.8 per cent, driving adjusted cash profits from £5.3m to £7.3m.
In order to keep the momentum going, the group has been looking to diversify. In the year it gained accreditation to enter the meter asset management market. From October, it began to "adopt, own and operate" low pressure gas meters and has since entered the commercial market.
It is also looking to grow its electricity business by seeking an independent distribution network operator licence, allowing it to own electrical assets. The licence is expected to be granted by the end of December 2017 and would allow Fulcrum access to a market that analysts at Finncap estimate is worth £500m. Management is focused on growing the value of its electricity-related work, which only accounts for around a tenth of its business.
Analysts at Cenkos are forecasting adjusted profit before tax of £7.4m, giving EPS of 4.1p for 2018 (from £6.7m and 3.6p in 2017).
FULCRUM UTILITY SERVICES (FCRM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 54p | MARKET VALUE: | £90m | |
| TOUCH: | 53-54p | 12-MONTH HIGH: | 67p | LOW: 31p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 6.2p* | NET CASH: | £12.6m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 38.8 | -1.0 | -0.3 | nil |
| 2014 | 38.3 | -4.5 | -2.9 | nil |
| 2015 | 33.7 | 0.6 | 1.8 | 0.4 |
| 2016 (restated) | 36.1 | 4.3 | 3.1 | 0.9 |
| 2017 | 37.7 | 6.5 | 3.3 | 1.9 |
| % change | +4 | +52 | +6 | +111 |
Ex-div: 28 Sep Payment: 27 Oct *Includes intangible assets of £2.57m, or 1.5p a share | ||||
