Cost-cutting, a substantial contract in Canada and lucrative government initiatives have made for a dramatic recovery at Alumasc (ALU). Its building products division felt most of the benefit and group underlying pre-tax profit more than tripled to £5.1m in the 12 months to end-June. Losses narrowed at the engineering operation, too, and volumes picked up during the final quarter. But much of this was flagged in July since when the share price has surged, and despite a good start to the new financial year, it is unlikely to be as spectacular.
Indeed, broker finnCap expects underlying pre-tax profit of £5.8m in the year to June 2014, giving adjusted EPS of 11.8p (up from £5.1m and 10.7p in 2013). Once again, building products, where comparable operating profit almost doubled last year to £8.4m, will be the key driver. Delivering the bulk of a lucrative contract supplying the aluminium smelter at Kitimat in Canada generated half the revenue growth in the division last year, and sales of insulated render systems, driven by government initiatives, hit a record, too. Still, that scheme is over and other schemes could take time to ramp up. There's growth elsewhere, though, and a sharp uptick in demand both in the US and Asia offset ongoing weakness in Europe. Concerns about China did, however, dampen demand from the mining sector, hindering progress at the troublesome engineering products division, although losses there still narrowed to £0.5m.
ALUMASC (ALU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 132p | MARKET VALUE: | £47.7m | |
| TOUCH: | 131-133p | 12-MONTH HIGH: | 138p | LOW: 75p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 20 | |
| NET ASSET VALUE | 62p* | NET DEBT: | 34% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 109 | 1.80 | 2.9 | 10.0 |
| 2010 | 88 | 3.48 | 6.4 | 10.0 |
| 2011 | 107 | 5.38 | 10.7 | 10.0 |
| 2012 | 111 | 0.39 | 1.2 | 2.0 |
| 2013 | 117 | 3.40 | 6.6 | 4.5 |
| % change | +6 | +772 | +450 | +125 |
Ex-div: 2 Oct Payment: 30 Oct *Includes intangible assets of £19.5m, or 54p a share | ||||
