An 8 per cent drop in Porvair's (PRV) revenue shouldn't come as a surprise given the big contracts the group's microfiltration unit booked in the preceding financial year. A fairer reflection of the filtration technology specialist's progress can be found in pre-tax profit figures, which increased by 9 per cent in the reported period to a record £9.2m.
While growth in China may be slowing, gasification - a process that converts organic or fossil fuels into synthetic gas - is going down a storm there. According to the group's finance director, Chris Tyler, that's because natural gas is very expensive in Asia.
In the reported period, Porvair benefited from the rollout of new products, growing capacity and a strong appetite for bioscience materials, aluminium filters and water analysis consumables. It also upgraded facilities and production equipment in the UK, US and China during the period. As part of its long-term strategy, the group plans to extend and revamp manufacturing plants across the business this year.
Management also intends to capitalise on Porvair's robust cash generation by making more bolt-on acquisitions. It recently acquired TEM Filter, a microelectronics specialist offering exposure to niche markets with high barriers to entry. Broker Peel Hunt expects adjusted EPS of 16p for the 2016 financial year, up from 15.1p in FY2015.
| PORVAIR (PRV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 285p | MARKET VALUE: | £128m | |
| TOUCH: | 285-295p | 12-MONTH HIGH: | 342p | LOW: 280p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 132p* | NET CASH: | £10.7m | |
| Year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 68.0 | 4.5 | 7.3 | 2.4 |
| 2012 | 76.0 | 6.3 | 10.1 | 2.6 |
| 2013 | 84.0 | 7.6 | 12.3 | 2.9 |
| 2014 | 104.0 | 8.4 | 14.4 | 3.2 |
| 2015 | 95.8 | 9.2 | 15.5 | 3.5 |
| % change | -8 | +9 | +8 | +9 |
Ex-div: 28 Apr Payment: 3 Jun *Includes intangible assets of £43.5m, or 97p a share | ||||
