These full-year figures from electronics distributor Acal (ACL) aren't as grim as they seem. Adjust for various exceptionals, and a £5.1m loss on selling its UK parts unit, and underlying pre-tax profit fell just 6 per cent to £6.3m. Moreover, and while Acal did experience tough markets - as weak global growth fuelled de-stocking for parts - a growing order book suggests that market conditions are improving.
Indeed, orders in the past two months have risen 7 per cent on a like-for-like basis - that follows on from a second half that saw orders grow 9 per cent compared to the first half. Acal has also improved the quality of its earnings, as evidenced by the increase in the underlying operating margin to 3.4 per cent in the second half from 3.2 per cent a year earlier. Part of that was achieved through ditching the underperforming UK parts operation, but it's also explained by a focus on designing and manufacturing parts - instead of merely supplying them. Reflecting that, Acal spent £8.1m in April buying magnetic parts specialist, Myrra - it has a manufacturing operation in southern China and therefore promises greater exposure to Asia.
Broker Peel Hunt expects adjusted pre-tax profit of £8.7m, giving adjusted EPS of 20.6p (from £6.3m and 17.5p in 2013).
ACAL (ACL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 215p | MARKET VALUE: | £67m | |
| TOUCH: | 217-225p | 12-MONTH HIGH: | 245p | LOW: 140p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | na | |
| NET ASSET VALUE: | 165p* | NET CASH: | £11.8m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 165 | -32.6 | -141 | 7.0 |
| 2010 | 182 | -6.3 | -24.5 | 7.0 |
| 2011 | 265 | 1.9 | 6.0 | 7.5 |
| 2012 | 258 | 2.7 | 7.4 | 8.0 |
| 2013 | 219 | -3.1 | -6.3 | 8.5 |
| % change | -15 | - | - | +6 |
Ex-div: 12 Jun Payment: 31 Jul *Includes intangible assets of £24m, or 77p a share | ||||
