Filtrona did rather better than the headline figures suggest with operating profits at constant currencies ahead at three of its four divisions and down by only just 1 per cent overall to £56.2m on an underlying basis. The collapse at the pre-tax line was due to £8.9m of restructuring costs and a £1.9m charge for fees as Filtrona was trumped on a major acquisition by a private equity house.
The porous technologies business, which makes fibre bonded components for a range of products including air fresheners and printer cartridges, had a stellar year as Filtrona launched new lines and won significant business in the printer market. Restructuring at the company’s Jarrow based filters operation has helped cut costs as production has shifted to lower cost facilities in Budapest. The group's security products business managed to increase margins due to a better product mix and also replaced the lost UK passport contract with new authentication work.
Strong cash generation and the £54m net cash proceeds from the sale of its US plastics business helped cut borrowings. Capital expenditure will double this year to nearer £20m but there is still plenty of headroom on its £186m borrowing facilities for potential acquisitions.
Cazenove has upgraded its 2010 pre-tax profits and EPS forecasts by 8 per cent to £52.1m and EPS of 16.7p (2009: £46.2m/14.8p).
FILTRONA (FLTR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 192p | MARKET VALUE: | £ 395m | |
| TOUCH: | 191-193p | 12-MONTH HIGH: | 205p | LOW: 106p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 75p* | NET DEBT: | 66% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 514 | 50.0 | 14.4 | 6.40 |
| 2006 | 517 | 52.2 | 15.3 | 6.90 |
| 2007 | 494 | 51.7 | 15.3 | 7.60 |
| 2008** | 432 | 46.7 | 17.1 | 7.78 |
| 2009 | 444 | 32.3 | 5.8 | 7.78 |
| % change | +3 | -31 | -66 | - |
Ex-div:14 Apr Payment:30 Apr **restated *Includes intangible assets of £98.1m, or 48p a share | ||||
