Despite shrugging off challenging markets to deliver sweet half-year figures, confectionary producer Zetar saw its shares slip after admitting that orders for the all-important Easter trading period had been lower than the previous year.
That, said management, reflected caution on the part of retailers, but the top team remains confident that its strategic plans are on track. Its confectionary division increased sales by 12 per cent during the period to £41.1m as retailers stocked more products from the group's Kinnerton brand, which licenses popular children's characters such as Peppa Pig and Hello Kitty. Some of these licences have now been extended into continental Europe, where a new marketing and distribution subsidiary has been established, while the group also expects to do well from its Olympic tie-up. Zetar withdrew from commodity nut lines in its snacks division as well, in order to focus on its premium branded ranges. While that move did knock around £4m from group sales, the underlying profit margin improved as a result - although it remains well below the long-term average figure.
Broker Liberum has downgraded its 2012 underlying pre-tax profit forecast from £7.1m to £6.6m, giving adjusted EPS of 38.7p (from £6.7m and 38.5p in 2011).
ZETAR (ZTR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 176p | MARKET VALUE: | £23.3m | |
| TOUCH: | 172-180p | 12-MONTH HIGH: | 253p | LOW: 168p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 355p* | NET DEBT: | 52% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 60.3 | 1.73 | 13.2 | nil |
| 2011 | 61.8 | 1.50 | 8.1 | nil |
| % change | +2 | -13 | -39 | – |
*Includes intangible assets of £30.6m, or 231p a share | ||||
