Fixing mobile phones, laptops and set-top boxes for John Lewis and Nokia is making Regenersis (RGS) a fortune. Underlying operating profit jumped more than a fifth in the first half to £4.6m after some big contract wins and acquisitions, but chairman Matthew Peacock says there's much more to come and that City forecasts for earnings growth of near 25 per cent in 2014 could prove conservative. If he's right, another round of upgrades beckons.
They might not be far away. Royalties are already rolling in from Virgin Media following a deal to supply a portable diagnostics kit used to mend set-top boxes. That helped swell revenue at the Advanced Solutions division by three-quarters to £14.2m and double profits to £1.4m. There will be a big contribution from the US in the second half, too, because a major cable TV company begins using the diagnostics kit in a few weeks' time. Others are looking to pilot the technology and Mr Peacock believes margins at the unit could eventually double to 20 per cent or more.
Cutting prices for mobile-phone makers struggling against Apple and Samsung hit margins at the emerging markets division. But, at least, Regenersis keeps the business and divisional profits still grew to £2.8m.
Broker Arden Partners expects full-year adjusted pre-tax profit of £8.2m and adjusted EPS of 15.7p (from £6.9m and 13.1p in 2012), rising to £10.2m and 19.3p in 2014.
REGENERSIS (RGS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 194p | MARKET VALUE: | £84m | |
| TOUCH: | 191-196p | 12-MONTH HIGH: | 197p | Low: 83p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 47 | |
| NET ASSET VALUE: | 78p* | NET DEBT | 23% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 69.9 | 2.73 | 5.08 | nil |
| 2012 | 90.2 | 3.19 | 5.88 | 0.67 |
| % change | +29 | +17 | +16 | - |
Ex-div: 8 May Payment: 7 Jun *Includes intangible assets of £41m, or 95p a share | ||||
