A double dose of cost reductions and innovation in burgeoning markets helped e2v (E2V) overcome a challenging economic environment to deliver both top-line and bottom-line growth in the six months to September. Central to this success was the technology systems and components manufacturer's core imaging unit, where a big investment strategy yielded revenue growth of 27 per cent.
By investing in cutting-edge technology, boss Steve Blair says the group has displaced competitors in a market where demand for high-quality imaging sensors, cameras and sub-systems is sky high. AnaFocus, the Spanish imaging business acquired last year to capitalise on rising appetite for high-end surveillance, continued to be a key driver of sales growth. But organic growth of 15 per cent shows the rest of the business is also thriving.
Elsewhere, trading proved more challenging. Despite some gains in radiotherapy, its radio frequency power generation division was hit by delays in winning some major defence contracts, while its semiconductor business struggled due to tepid microprocessor markets in Europe.
Fortunately, cost control and a favourable product mix saw both divisions keep operating margins stable, prompting management to continue investing in flourishing areas such as industrial automation and space. Current projects include developing technology forcing robots to shutdown in factories when humans are in close proximity. Broker Peel Hunt expects adjusted EPS of 14p in the year to March 2016.
| E2V TECHNOLOGIES (E2V) | ||||
|---|---|---|---|---|
| ORD PRICE: | 239p | MARKET VALUE: | £520m | |
| TOUCH: | 238-239p | 12-MONTH HIGH: | 268p | LOW: 158p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 78p* | NET DEBT: | 12% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 102 | 13.0 | 4.6 | 1.5 |
| 2015 | 110 | 13.8 | 4.8 | 1.6 |
| % change | +7 | +7 | +5 | +7 |
Ex-div: 19 Nov Payment: 17 Dec *Includes intangible assets of £99m, or 45p a share | ||||
