Compost and garden products supplier, William Sinclair (SNCL) crashed to a full-year loss after record rainfall in the UK caused gardeners to stay indoors and costs to rise sharply in its peat harvesting business. A sharp reversal in cash levels has seen the dividend slashed, too.
Excessive rainfall meant William Sinclair was unable to harvest peat for most of the year and was forced to buy in supplies from Canada to meet demand which was more expensive. The inclement weather also resulted in a 19 per cent drop in demand for compost which was not fully offset by demand for products like slug killer. To compound matters, profits were hit by a £665,000 exceptional charge on the carrying value of the company's assets near Salford after a planning ruling meant that no further peat extraction can take place at the Chat Moss site. Expect a decision within the year on compensation for the cessation of peat harvesting at Bolton Fell in Cumbria, for which Wm Sinclair has already received a £9m interim payment from Natural England.
House broker WH Ireland forecasts current year adjusted pre-tax profits of £2m and EPS of 8.6p.
WILLIAM SINCLAIR (SNCL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 114p | MARKET VALUE: | £19.4m | |
| TOUCH: | 113-115p | 12-MONTH HIGH: | 196p | LOW: 114p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 88p | NET CASH: | 41% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008* | 54.8 | 0.52 | 1.3 | 2.0 |
| 2009 | 46.3 | 1.24 | 6.8 | 3.5 |
| 2010 | 48.5 | 2.06 | 9.8 | 5.0 |
| 2011 | 54.3 | 3.18 | 13.9 | 6.2 |
| 2012 | 48.2 | -0.40 | -2.7 | 4.5 |
| % change | -11 | - | - | -27 |
Ex-div: 13 Feb Payment: 14 Mar *15 month period | ||||
