The good news for Morgan Crucible is that NP Aerospace, in which the engineering group increased its stake from 49 per cent to 60 per cent, saw turnover boosted by 159 per cent to £186.2m, and this helped to push overall group net cash flow up from £111.2m to £134.5m. It also helped to boost group turnover and reduce net debt, while management retains sufficient confidence to maintain the dividend payout.
But the group's core divisions saw sales fall 3 per cent in technical ceramics to £206m and by 9.8 per cent to £345.2m in insulating ceramics. Measures taken to reduce costs, notably a reduced headcount, generated one-off costs of £12m. What's more, net finance charges rose from £12.7m to £29.3m, reflecting the cost of acquiring NP Aerospace and the Carpenter business. And the net interest charge on pension scheme net liabilities rose to £4.3m from an income of £100,000 the previous year.
On a brighter note, there have been signs of an improvement in order intake since the year-end, but the real growth for now is likely to come from NP Aerospace - the rest of which will be purchased over the next three years - where demand for its body and vehicle armour products is expected to grow significantly.
KBC Peel Hunt is forecasting 2011 adjusted pre-tax profits of £53m and EPS of 13.6p.
| MORGAN CRUCIBLE(MGCR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 166p | MARKET VALUE: | £449m | |
| TOUCH: | 165-166p | 12-MONTH HIGH: | 195p | LOW: 67p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 68p* | NET DEBT: | 137% | |
| Year to 3 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 610 | 14.3 | 18.1 | 2.50 |
| 2007 | 678 | 51.8 | 12.9 | 4.50 |
| 2008 | 693 | 71.7 | 19.1 | 6.75 |
| 2009 | 835 | 82.8 | 22.2 | 7.00 |
| 2010 | 943 | 31.4 | 7.10 | 7.00 |
| % change | +13 | -62 | -68 | - |
Ex-div: 19 May Payment: 9 Jul *Includes intangible assets of £297m, or 110p a share | ||||
