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KBC remains robust

RESULTS: KBC Advanced Technologies remains flat but the outlook is more encouraging
March 16, 2010

Revenue and underlying pre-tax profits at refineries-focused engineering consultant KBC Advanced Technologies remained flat against 2008's record results. However, a stronger second half (£30.8m of orders against £24.5m in the first half) and an increased backlog suggest better times may lie ahead. Although chief executive George Bright described the industry as still being in turmoil, customer spending on capital projects held up better than expected, particularly in developing regions such as Asia and South America.

IC TIP: Hold at 49p

KBC's major growth area in the year was its refinery simulation software, which grew revenue by 88 per cent. The software is now installed in over 170 sites and positions the group as a world leader. Consulting revenue was weaker than expected, particularly for operating projects where the industry invested less than expected on operational improvements. Growth in contract awards and the order book are positive indicators for 2010, although competition has increased and pricing pressure remains an issue.

The cost savings programme delivered around £2.8m on an annualised basis. Broker Arbuthnot Securities expects 2010 pre-tax profits of £5.1m and EPS of 5.9p.

KBC ADVANCED TECHNOLOGIES (KBC)
ORD PRICE:49pMARKET VALUE:£28m
TOUCH:48-50p12-MONTH HIGH:50pLOW: 30p
DIVIDEND YIELD:3.2%PE RATIO:9
NET ASSET VALUE:51p*NET CASH:£3.98m

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200528.5-2.03-4.2nil
200635.41.742.10.50
200738.12.903.50.75
200852.85.396.41.35
200952.64.615.41.55
% change--14-16+15

Ex-div: 5 May

Payment: 18 May

*Includes intangible assets of £8.3m, or 15p a share

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