Latchways put diversity and product innovation to good use in the year, which resulted in solid turnover and profit growth. The only disappointment came from the US, where turnover fell 30 per cent to £4m as a result of lower sales to the US military. Still, there's a strong pipeline of potential business and the group paid a 40p special dividend in January, although – trading on 15 times forecast earnings – the shares look up with events.
Latchways designs, manufactures and sells fall protection systems, and has been busy expanding its range of products and developing new markets – having recently boosted its sales and marketing teams by 30 per cent. Safety products generate around three-quarters of group revenue and 92 per cent of operating profits, of which two-thirds comes from exports. This is important given that UK markets still face significant headwinds, although UK turnover did rise 10 per cent to £10.7m. Meanwhile safety services, which is Latchways' UK installation arm, boosted sales 8 per cent to £11.4m – but strong competition eroded margins and operating profits here dipped from £1.2m to £0.9m.
Broker N+1 Brewin forecasts pre-tax profit for 2013 of £10.9m, giving EPS of 70.1p (2012: £9.9m/63.4p).
| LATCHWAYS (LTC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,035p | MARKET VALUE: | £116m | |
| TOUCH: | 1,010-1,050p | 12-MONTH HIGH: | 1,335p | LOW: 1,001p |
| DIVIDEND YIELD: | 3.2%* | PE RATIO: | 16 | |
| NET ASSET VALUE: | 258p** | NET CASH: | £8.4m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 35.2 | 8.62 | 54.8 | 21.3 |
| 2009 | 37.0 | 8.31 | 51.6 | 23.4 |
| 2010 | 33.9 | 7.62 | 49.3 | 25.8 |
| 2011 | 39.6 | 9.33 | 61.3 | 29.6 |
| 2012 | 41.4 | 9.93 | 66.0 | 32.7* |
| % change | +5 | +6 | +8 | +10 |
Ex-div: 15 Aug Payment: 14 Sep *Excludes a special dividend of 40p a share **Includes intangible assets of £6.5m, or 58p a share | ||||
