Speciality chemicals group Alent (ALNT) has the wind in its sales. Chief executive Steve Corbett told us he expects the electronic equipment industry, which accounts for about 70 per cent of Alent's sales, to grow by close to 3 per cent this year. This might seem modest, but it marks a big upswing after previous years of decline. With the future looking positive, debt slashed by £42m, improving cash flow and better margins, management has announced a special dividend of 15p a share - equating to a total yield of 6.9 per cent.
Overall, half-year net sales, which exclude commodity metals, grew 4 per cent at constant exchange rates, as both the company's divisions performed well. Surface Chemistries reported a 14 per cent rise in adjusted operating profit, to £21.4m, as a strengthening semiconductor market pushed sales of high-margin copper damascene up 12 per cent. Demand for printed circuit boards also increased as the electronics market picked up. Volumes of solder paste were particularly robust, rising 9 per cent in the period.
Profitability improved too, as management focused on higher-margin business. At constant currencies adjusted operating profits rose 8 per cent to £44m. As with other exporters, however, the growth was wiped out by forex movements, so that reported profits showed little movement. Bank of America Merrill Lynch consequently expects EPS of 24p for the full year, flat on 2013.
| ALENT (ALNT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 346p | MARKET VALUE: | £964m | |
| TOUCH: | 344-348p | 12-MONTH HIGH: | 392p | LOW: 297p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 112p* | NET DEBT: | 33% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 349 | 40.3 | 10.5 | 2.89 |
| 2014 | 316 | 41.8 | 10.8 | 3 |
| % change | -9 | +4 | +3 | +4 |
Ex-div: 24 Sep Payment: 17 Oct *Includes intangible assets of £280m, or 100p a share | ||||
