Shares in Oxford Instruments (OXIG) remain in the trough they fell into after September's damp AGM statement. Judging by the commentary associated with this week's interim results, the tough trading backdrop that prompted that profit warning is here to stay.
Despite this, chief executive Jonathan Flint insisted he was "really quite pleased" with the technology tools group's performance in the six months to September, thanks in part to 21 per cent organic growth in the order book since January. The long-term structural growth in demand for nanotechnology remains the biggest source of hope, amid falling constant-currency revenues in North America and Europe and a 15 per cent decline in China so far this year.
Lower cash generation and acquisitions meant net debt increased by £20.6m in the period to about 2.4 times cash profits - below the current covenant of 3.5 times cash profits. To provide "greater comfort on headroom", Oxford's creditors have agreed to extend that ratio until September 2016, when chairman Nigel Keen is set to depart. Finance director Kevin Boyd also leaves for Spirax-Sarco (SPX) in April.
Analysts at N+1 Singer expect adjusted pre-tax profit of £37.1m and EPS of 48.3p in the current financial year, up from £35.6m and 48p in the year to March 2015.
OXFORD INSTRUMENTS (OXIG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 604p | MARKET VALUE: | £346m | |
| TOUCH: | 601-604p | 12-MONTH HIGH: | 1,287p | LOW: 503p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | NA | |
| NET ASSET VALUE: | 225p* | NET DEBT: | 108% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 175 | 2.5 | 2.9 | 3.7 |
| 2015 | 165 | 6.1 | 4.9 | 3.7 |
| % change | -6 | +144 | +69 | - |
Ex-div: 10 Mar Payment: 8 Apr *Includes intangible assets of £226m, or 394p a share. | ||||
