Threats to the funding of London Underground upgrades and a weak Spanish economy weighed heavily on Invensys shares, despite a generally upbeat set of full-year results. Indeed, the order book grew by an underlying 10 per cent to £2.30bn and the dividend doubled to 3p a share.
However, the earnings performance was mixed across the group with operating profit at the operations management arm - Invensys' biggest division and the most exposed to private sector spending - falling 28 per cent to £92m. While rail held firm, with underlying profits up 1 per cent to £141m. The problem now is that the rail side looks heavily exposed to potential public spending cuts across Europe, particularly the UK, where value-for-money arguments are raging over the Crossrail project.
What we said: Buy
When: 29 April 2010
Price: 338p
Tip performance to date: -16%