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Cosalt's swing into profitability suggests that its new strategy - of focusing on safety and protection services and equipment for the oil and gas sector - is paying off. The group has sold its loss-making schoolwear business, Banner, for £4.5m while its holiday business, Holiday Homes, is on the market with a value of £6m.
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Meanwhile, last year's purchase of lifting and inspection business, GTC, has been fully integrated. Cosalt announced with these figures that it will acquire North Sea-based complementary business Myhre-Maritime for £12m in July. New management has also come on board with chief executive Mark Lejman having taken over from Per Jonsson in May. A new finance director, Mike Reynolds, and a non-executive director, Yarom Ophir, have also joined the group.
Cosalt has become a strong player in the North Sea and, increasingly, in Europe with management eyeing acquisitions to strengthen its European foothold, as well as to provide entry into the US and the Far East. Landisbanki expects full-year EPS 22.4p, rising to 29.1p in 2009.
COSALT (CSLT) |
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|---|---|---|---|---|
| ORD PRICE: | 296p | MARKET VALUE: | £73.2m | |
| TOUCH: | 293-298p | 12-MONTH HIGH: | 410p | LOW: 281p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 187p* | NET DEBT: | 60% | |
| Half-year to 27 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 32.0 | -0.07 | 1.49 | 6.0 |
| 2008 | 49.6 | 0.78 | 1.77 | 6.0 |
| % change | +55 | - | +19 | - |
Ex-div: 3 Sep Payment: 10 Sep *Includes intangible assets of £40.8m or 165p a share |
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IC View:
Cosalt is looking increasingly focused on robust markets. Add that to the decent yield, and the fact that the shares trade on a not especially demanding 10 times 2009's forecast earnings, and they're long-term good value.
Last IC View: Good value, 362p, 19 May 2008
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