Alent (ALNT) has made a decent start to the year and the underlying trend is unquestionably positive, particularly at the higher-margin assembly materials division. That's encouraging and underpins our optimistic stance. But the pace of progress is and the strong pound remains a problem.
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Sales grew by 3.7 per cent in the first quarter and margins rose nearer to UBS's forecast of 22.9 per cent this year. Crucially, demand is up at Alent's core automotive and electronics markets, although a 6.5 per cent currency hit left reported sales down 3 per cent. UBS expects flat underlying operating profit of £94m in 2014, rising to £102m next year, giving adjusted EPS of 26p.
