Direct comparisons were always going to be complicated for electronics distributor Acal (ACL) after a series of disposals and acquisitions this year. Like-for-like sales fell slightly during the first half, but gradually improving economic sentiment does appear to be having a positive effect and sales returned to growth in the second quarter. Overall, that suggests the 19 per cent increase in underlying operating profit to £3.8m seen in these results can be sustained.
The basis for this optimism is that the quality and quantity of orders during the period showed signs of improvement. Over the past couple of difficult years, quantity of orders has never been a problem, but the average value fell as companies squeezed their spending on inventory. This negative process started to reverse during the half to the extent that the backlog for new orders - a key measure of market health for Acal - increased by 26 per cent to £60m, representing about three and a half months of sales for the company. In addition, higher stock-turn also benefited the cash flow statement as the amount of working capital, as a percentage of annualised sales, fell a whole percentage point to 13 per cent for the half.
Broker Oriel Securities forecasts full-year adjusted pre-tax profit of £7.6m, giving adjusted EPS of 19.3p, compared with the £5.9m and 16.8p in 2013.
ACAL (ACL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 357p | MARKET VALUE: | £112m | |
| TOUCH: | 354-362p | 12-MONTH HIGH: | 380p | LOW: 162p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | na | |
| NET ASSET VALUE: | 165p* | NET DEBT: | 3% | |
| Half-yearto 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 110 | 0.7 | 1.8 | 2.5 |
| 2013 | 113 | 3.3 | 9.6 | 2.5 |
| % change | +3 | +371 | +433 | - |
Ex-div: 24 Dec Payment: 17 Jan *Includes intagible assets of £29.4m, or 94p a share | ||||
