Flat demand and a gross margin squeeze held back Swallowfield's latest half-year results as the company faced a tough environment for cosmetics, toiletries and household products in its core markets of western Europe, North America and Japan. However, pre-tax profits held up as Swallowfield continues to reduce its overheads.
And full-year profits are set to get a facelift with a raft of new product launches in the current half year. On offer is a hair powder aimed at both cleaning and styling locks. There's also a high-tech lipstick and "innovative formulations" for wooden clenched cosmetic pencils. And with two big customers to keep happy - accounting for almost half of sales - Swallowfield has to continue to innovate fast.
One big hope is that the company's new Chinese plant could sell into the local economy. However, to date, the one product sold there is a shaving gel made in the UK. For the full-year to 30 June 2012, management is "cautiously positive" and analysts have expectations of pre-tax profits of £1.65m.
SWALLOWFIELD (SWL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 98.5p | MARKET VALUE: | £11.1m | |
| TOUCH: | 95-102p | 12-MONTH HIGH: | 135.5p | LOW: 98.5p |
| DIVIDEND YIELD: | 6.4% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 118p | NET DEBT: | 29% | |
| Half-year to 7 Jan | Turnover (£m) | Pre-tax profit (£000) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 31.3 | 689 | 4.60 | 2.20 |
| 2012 | 31.5 | 701 | 4.70 | 2.20 |
| % change | +1 | +2 | +2 | – |
Ex-div: 2 May Payment: 25 May Aim: Personal products | ||||
