Good exposure to the tenanted housing sector has helped shield Galiform from the effects of weak consumer demand and a slow new housing market. Sales in the group's UK Howden Joinery operation fell just 3.4 per cent to £756m and margins rose due to improvements in purchasing and manufacturing.
Galiform trades from a network of 462 nationwide depots but plans to open up to 30 new sites. Based on an investment of around £500,000 a site, management reckons there is scope to open more than 600 depots in the UK. Trading in France was flat but with just 12 depots a decision is being made on whether to expand its efforts or seek a buyer for that business.
Good cash generation and the £35m reduction in stock levels has returned Galiform to a net cash position. A new £160m bank facility has also been secured to 2014.
On the negative side Galiform still has 54 legacy properties dating back to the sale of MFI and these are at various stages of exit, but have an annual rent and rates liability of £17.6m in 2010.
Numis Securities expects adjusted pre-tax profits of £70m and EPS of 7.5p (2009: £68.7m/8.3p).
GALIFORM (GFRM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 83p | MARKET VALUE: | £ 523m | |
| TOUCH: | 82-83p | 12-MONTH HIGH: | 94p | LOW: 13p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 10 | |
| NET ASSET VALUE: | * | NET CASH: | £1.7m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 622 | 29.8 | 1.1 | 2.0 |
| 2006 | 733 | 25.0 | 1.0 | nil |
| 2007 | 977 | 44.4 | 8.8 | 0.5 |
| 2008 | 806 | 79.1 | 9.2 | nil |
| 2009 | 770 | 68.6 | 8.3 | nil |
| % change | -5 | -13 | -10 | - |
*Negative equity shareholders' funds | ||||
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