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Enodis’s chief executive David McCulloch says that his company’s profit performance illustrates why it is in so much demand.
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This month, the catering equipment maker rejected US group Manitowoc’s £948m, 258p a share offer in favour of a bid from the Illinois Tool Works (ITW) for 280p. In the past, it has also fielded interest from US group Middleby and UK-listed Aga Foodservice.
| ENODIS (ENO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 283p | MARKET VALUE: | £1.04bn | |
| TOUCH: | 283-284p | 12-MONTH HIGH: | 288p | LOW: 124p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 54p | NET DEBT: | 63% | |
| Half-year to 29 Mar |
Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 365.4 | 26.3 | 4.30 | 1.40 |
| 2007 | 394.6 | 22.2 | 2.60 | 2.00 |
| % change | +8 | -16 | -40 | +43 |
Ex-div:28 May Payment:23 Jun *Includes intangible assets £198m, or 54p a share |
||||
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The group’s profit after tax increased 11 per cent on the same period a year ago, after excluding £5m restructuring charges and a one off tax charge of just over £4m.
This doesn’t sound exceptional, but Mr McCulloch says that the group has produced consistent profit growth in its bottom line in the mid-teens due to three factors: its broad product line, brand recognition and finding solutions for customers (which he calls innovation).
He is upbeat about winning a contract to provide McDonalds with a fryer that uses 40 per cent less oil, saving franchisees costs in changing to fat-free oil.
The likelihood is that Mr McCulloch's work for minority shareholders is at an end. Market action suggests that the bid from ITW (which is not conditional on trading) will be the final one and that Manitowoc will not come back for another bite. Neutral ratings from brokers Arbuthnot and Citigroup suggest that analysts are of the same thinking. Sit tight.
Last IC View: Sit tight, 226p, 10 April 2008
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
