Filter manufacturer Porvair's (PRV) declaration in December that earnings would beat forecasts assured a muted reaction to full-year numbers. Expect further growth this year, as well as a splurge on capacity upgrades to ensure the trend continues.
A better second half at the smaller metals filtration division, driven by the buoyant US automotive industry, made up for a poor start to the year; annual pre-tax profit there ended flat. But the big news was at the core microfiltration unit, where profit leapt 29 per cent to £8.6m. The growth should continue: three big gasification contracts signed in the past few years - Posco, Reliance Industries and the UK government - should generate a one-off boost to revenue of about £20m this year. It will be back to normal in 2015, but likely replacement work every few years should provide a steady stream of recurring revenue.
Cash advances, which helped Porvair finish the year free of net debt for the first time, are being pumped back into the business. Capital expenditure will triple this year to £6m, most of which will bankroll site consolidation in the UK.
Broker Peel Hunt expects adjusted pre-tax profit of £8.6m in 2014, giving adjusted EPS of 13.7p (from £7.8m and 12.7p in 2013).
PORVAIR (PRV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 293p | MARKET VALUE: | £128m | |
| TOUCH: | 290-295p | 12-MONTH HIGH: | 320p | LOW: 164p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 23 | |
| NET ASSET VALUE | 109p* | NET CASH: | £0.6m | |
| Year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 55.2 | 1.1 | 1.6 | 2.3 |
| 2010 | 63.6 | 3.1 | 5.2 | 2.3 |
| 2011 | 68.1 | 4.5 | 7.3 | 2.4 |
| 2012 | 76.5 | 6.3 | 10.1 | 2.6 |
| 2013 | 84.3 | 7.8 | 12.7 | 2.9 |
| % change | +10 | +25 | +26 | +12 |
Ex-div: 30 Apr Payment: 6 Jun *Includes intangible assets of £42.5m, or 97p a share | ||||
