Power supply equipment maker manufacturer Chloride has been busy restructuring its business, cutting £1.5m from its annual cost base in the first half with savings of £2.5m expected from 2010. However, as a result first-half profits were dragged down by £3.5m of restructuring costs, and there will be a further £2.5m hit in the second half. The modest rise in turnover mainly reflects the benefits of acquisitions and favourable exchange rate movements.
Western Europe remains the group's primary revenue source, accounting for over half of sales, and turnover here fell by 14 per cent in constant currency rates as customers in manufacturing and financial services held back from new purchases of equipment used to guard against power cuts. These are used typically on trading floors and floodlight stadiums. However, this also meant that customers spent more on maintaining existing installations which meant service revenues held up well. The flip side is that a higher proportion of service revenue in the sales mix, coupled with lower product margins, due to the competitive market conditions, dragged operating margins down from 13.5 per cent to 11.5 per cent.
Analysts at Investec Securities expect full-year normalised pre-tax profits to fall 10 per cent to £39.1m, giving EPS of 10.1p (2009: £43.6m/11.5p).
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| CHLORIDE(CHLD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 163p | MARKET VALUE: | £426m | |
| TOUCH: | 162-164p | 12-MONTH HIGH: | 189p | LOW: 107p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 46p | NET DEBT: | 29% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 152 | 17.6 | 4.68 | 1.85 |
| 2009 | 153 | 10.4 | 2.78 | 1.90 |
| % change | +1 | -41 | -41 | +3 |
Ex-div: 11 Nov Payment: 2 Dec *Includes intangible assets of £93m, or 36p a share | ||||
