If non-recurring and special items, which are largely linked to September's takeover of instrument maker Hartest, are ignored then Elektron's 2010-11 profits soared from £1.6m to £5.1m. On the same basis, operating profits advanced from £2.1m to £5.7m. The main manufacturing and development division increased profits from £2.5m to £3.9m, while other subsidiaries, including Totalcarbide (which makes tungsten 'wear' parts) and Titman (cutting technology) turned a loss of £443,000 into a £541,000 profit. Hartest chipped in five-month profits of £1.2m. Sales and pre-tax profits would have been £65.3m and £5.9m respectively if Hartest's results had been included for full 12 months.
The key to these bumper results is the sharp rise in sales and the export figures are also particularly impressive. In Asia-Pacific and China, for example, they jumped from under £4m to over £9m. And Elektron is not holding back on its expansion plans: this year R&D spending (excluding tooling) will almost double to £2.5m, while the sales and marketing budget rises £3.0m to £9.3m.
Punchy stuff. Elektron is also staying on the acquisition trail for niche engineering businesses. Broker finnCap forecasts 2011-12 sales of £70m and adjusted profits up from £5.1m to £6.7m. Unfortunately, a higher 25 per cent tax charge (it was 19 per cent) means adjusted earnings only rise 0.5p to 4.7p but the dividend is expected to be 1p a share.
ELEKTRON (EKT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 41p | MARKET VALUE: | £43.1m | |
| TOUCH: | 40-41p | 12-MONTH HIGH: | 44p | LOW: 18.25p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 14p* | NET DEBT: | 29% | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 26.0 | 0.51 | 0.51 | 0.40 |
| 2008 | 34.9 | 1.95 | 2.85 | 0.45 |
| 2009 | 35.6 | -2.27 | -2.36 | 0.46 |
| 2010 | 29.9 | 0.22 | 0.34 | 0.50 |
| 2011 | 50.0 | 3.55 | 3.00 | 0.80 |
| % change | +67 | +1514 | +782 | +60 |
Ex-div:15 June Payment:16 August Aim: Electrical equipment. *Including intangible assets of £4.73m, or 4p a share. | ||||
