There were no leakages in BSS results as the plumbing and building supplier's business model, which has a large exposure to repair and maintenance spend, is proving very resilient in the economic downturn. Underlying operating profits gushed up 4 per cent to £68.1m, and the dividend was held.
BSS has worked hard to increase market share and keep costs under control, so while the group's costs-to-sales ratio rose from 17.6 per cent to 18 per cent, gross margins edged up thanks to cost reductions equivalent to £12m a year. And while government-related work may slow in the coming year, there remains plenty of scope for further reductions in costs. Over half of the cost base goes on wages and related expenses, which chief executive Gavin Slark notes could be reduced if demand falls.
Moreover, Mr Slark places great emphasis on identifying customer needs. While BSS enjoys a 30 per cent market share in boiler replacements, the spare-parts business only had a 5 per cent share. So in April the group bought Direct Heating Spares for £5.7m which immediately doubled the group's share in the spare-parts market.
Broker Panmure Gordon expects 2010 pre-tax profits of £52m and EPS of 29.9p (£58.8m and 33.7p in 2009).
for a guide to the terms used in IC results tables
For more analysis of company results as they're released, go to www.investorschronicle.co.uk/results
| BSS (BTSM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 287p | MARKET VALUE: | £354m | |
| TOUCH: | 280-290p | 12-MONTH HIGH: | 387p | LOW: 185p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 188p* | NET DEBT: | 37% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 0.75 | 32.9 | 19.7 | 4.10 |
| 2006 | 0.86 | 36.9 | 21.0 | 4.90 |
| 2007 | 1.01 | 47.3 | 27.1 | 6.19 |
| 2008 | 1.29 | 58.3 | 33.3 | 7.43 |
| 2009 | 1.34 | 57.8 | 33.3 | 7.43 |
| % change | +4 | -1 | - | - |
Ex-div: 24 Jun Payment: 24 Jul *Includes intangible assets of £126m, or 102p a share | ||||
