Such was the success of Porvair’s first half, management have increased expectations for the full-year. And that optimism looks well-founded, not least because the US-based metals filtration business continues its recovery, almost doubling profits during the period to £540,000 on sales up 8 per cent at £12.2m. A strong aluminium price, growth in US car production and rise in airline passenger numbers have helped, and heavy restructuring is also paying off. With high-margin new patented products now making up nearly a third of sales revenue and production set for further streamlining, management is hoping to achieve an increase in margins from low single-digits to 8-10 per cent by the year-end.
A 17 per cent leap in aerospace revenue also kept the steady-margin microfiltration division on an upward trajectory. Big wins with gasification and nuclear customers like British Energy produced record orders for the second quarter, and schedules for the next six months are “promising”. True, revenue fell 9 per cent at water analysis unit Seal against tough comparisons, but an “encouraging” pipeline of order prospects bodes well for the second half. What’s more, net debt is down by more than a third to £8.9m and could drop to £7m by year-end, providing greater scope for acquisitions.
Broker Peel Hunt expects a full-year pre-tax profit of £3.7m and adjusted EPS of 6.7p (£3.1m and 5.7p respectively in 2010).
PORVAIR (PVR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 120p | MARKET VALUE: | £50.9m | |
| TOUCH: | 118-122p | 12-MONTH HIGH: | 136p | LOW: 59p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 97p* | NET DEBT: | 22% | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 29.7 | 1.28 | 2.1 | 1.0 |
| 2011 | 31.1 | 1.63 | 2.7 | 1.0 |
| % change | +5 | +27 | +29 | - |
Ex-div: 3 Aug Payment: 9 Sep * Includes intangible assets of £36.5m, or 86p a share | ||||
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