Demand for engineering consultants, such as those provided by RPS (RPS), is highly cyclical. For the past few years, government austerity programmes in Europe and a slowdown in the natural resources sector, especially in Australia, has put a damper on profit growth. Yet RPS has performed resiliently through the ongoing downturn, as it has done in previous times of turbulence. In fact, this year it increased the dividend by 15 per cent for the twentieth consecutive year, while completing six acquisitions.
RPS also looks well placed to benefit from the looming economic upswing in Western economies. These figures for 2013 hinted towards an improvement in overall demand: underlying profit at RPS's core energy division climbed 19 per cent, while the built and natural environment division saw 6 per cent profit growth. This more than offset the 33 per cent slump in underlying profits in Australia and the Asia Pacific.
Improving end markets and full-year contributions from recently acquired companies should contribute towards decent growth again in 2014. Broker Panmure Gordon expects adjusted EPS to climb to 22.7p this year, from 20.2p in 2013.
RPS (RPS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 331p | MARKET VALUE: | £731m | |
| TOUCH: | 331-332p | 12-MONTH HIGH: | 360p | LOW: 191p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 169p* | NET DEBT: | 9% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 444 | 48.6 | 15.8 | 4.2 |
| 2010 | 462 | 42.5 | 14.8 | 4.8 |
| 2011 | 529 | 40.5 | 13.5 | 5.6 |
| 2012 | 556 | 40.2 | 11.9 | 6.4 |
| 2013 | 568 | 43.6 | 13.1 | 7.36 |
| % change | +2 | +8 | +10 | +15 |
Ex-div: 16 Apr Payment: 23 May *Includes intangible assets of £375m, or 170p a share | ||||
