Lower than expected demand for computers, smartphones and tablets coupled with a mixed global car market - industries to which Alent (ALNT) supplies materials that make the products work - took a bite out of group profits in the first six months of 2013. Guidance is for just "modest growth" for the remainder of the year.
Furthermore, an 18 per cent decline in sales of high-margin copper damascene, caused by inventory de-stocking and weak demand from a single customer, hit earnings and squeezed margins. Strip out currency fluctuations and the result was an 8.5 per cent fall in group adjusted operating profit, while sales, excluding revenue from metal passed through to customers, fell 3.4 per cent.
In the assembly materials division, weak sales of solder products offset decent growth in the water treatment chemical's business, leaving divisional sales down 3.5 per cent. In the surface chemistries category, sales of performance coatings products rose slightly, thanks to demand from Asia and the Americas, and circuit board chemistry volumes grew 2 per cent, although this was offset by the sales slump of copper damascene.
Broker Numis Securities expects flat full-year operating profit of £96.8m and EPS of 24.9p (from £97.2m and 24.5p in 2012).
| ALENT (ALNT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 368p | MARKET VALUE: | £1bn | |
| TOUCH: | 366-369p | 12-MONTH HIGH: | 414p | LOW: 296p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 112p* | NET DEBT: | 46% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 362 | 46.9 | 13.7 | 2.75** |
| 2013*** | 349 | 40.3 | 10.5 | 2.89 |
| % change | -4 | -14 | -23 | +5 |
Ex-div: 11 Sep Payment: 18 Oct *Includes intangible assets of £308.6m, or 111p a share **Calculated on a pro-forma basis, assuming Cookson half-year dividend was split in the same proportion as the final dividend. **Half-year dividend equivalent to 35 per cent of 2012 pro-forma full year dividend | ||||
