Scientific camera manufacturer Andor Technology (AND) saw sales and profits slump at the half-year stage as government-related spending cuts kicked in, causing customers to delay purchases. Indeed, adjust for such items as amortisation of intangible assets and operating profit fell 22 per cent year-on-year to £4.2m
The problem for Andor is that most of its sales originate - either directly or indirectly - from publicly-funded research institutions. But the stimulus funding that followed 2008's financial crash and the subsequent recession has finally dried up, with modest sales growth in China proving too little to compensate for austerity induced weakness in the US and Europe - combined, those regions generate two-thirds of sales. That weak public funding backdrop means chief executive Conor Walsh expects the short term to be constrained with only "modest growth next year" anticipated.
Still, Andor’s long-term future looks brighter with Mr Walsh pointing out that Andor’s product pipeline remains very strong, with some markets "showing record levels of customer interest". Moreover, the group's existing products have maintained their pricing power - the gross margin averaged 56.1 per cent in the first half.
Broker WH Ireland expects adjusted full-year pre-tax profit of £7.4m, giving adjusted EPS of 19.1p (from £9.9m/25.8p in 2012).
ANDOR TECHNOLOGY (AND) | ||||
|---|---|---|---|---|
| ORD PRICE: | 287p | MARKET VALUE: | £90.7m | |
| TOUCH: | 287-292p | 12-MONTH HIGH: | 450p | LOW: 282p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 154p* | NET CASH: | £20.1m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 31.2 | 4.96 | 12.4 | nil |
| 2013 | 27.9 | 3.82 | 10.1 | 1.00 |
| % change | -11 | -23 | -19 | - |
Ex-div: 31 Jul Payment: 29 Aug *Includes intangible assets of £15.8m, or 50p a share | ||||
