Electronics company Laird continues to face stiff head winds as component customers continue to retrench and 2010 is likely to remain very unpredictable.
Despite wiping £45.9m off its operating overheads, the streamlined Laird company was still forced to slash its second half dividend by more than 40 per cent as operating profits halved. There was a distinct improvement in both its performance materials and wireless systems divisions with second half sales jumping 11 per cent and 27 per cent to £95.6m and £47.5m respectively on the first six months. But the mobile handsets arm, which accounts for two-thirds of company revenue, remains under huge pressure. The division, which makes electromagnetic shielding for handsets, saw revenues slump from £142m in the first six months to £120m between July-December and sustained recovery is unlikely until late this year at best.
Having raised £89m through last year's 1-for-2 rights issue, Laird has avoided any immediate threat to its banking arrangements and helped slash borrowings. Also, cash generation last year of £49.7m may fund the odd bolt-on acquisition as Laird targets expansion into the Far East and into new products, including PC notebooks and netbooks. Broker JP Morgan Cazenove is looking for pre-tax profits of £40m and EPS of 11.6p for 2010 (£27m and 9.6p respectively for 2009).
Laird (LRD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 130p | MARKET VALUE: | £347m | |
| TOUCH: | 130-131 | 12-MONTH HIGH: | 200p | 48p |
| DIVIDEND YIELD: | 5% | PE RATIO: | na | |
| NET ASSET VALUE: | 218p* | NET DEBT: | 8% | |
| Year to 31 December 2009 | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 490 | 34.3 | 15.1 | 9.60 |
| 2006 | 371 | 39.6 | 16.3 | 10.30 |
| 2007 | 564 | 51.5 | 21.4 | 11.50 |
| 2008 | 635 | 26.5 | 7.0 | 10.30 |
| 2009 | 529 | 2.7 | -1.7 | 6.00 |
| % change | - | - | - | - |
Ex-div: 05 May Payment: 04 Jun *Includes £542m of intangible assets or 204p a share | ||||
