Packaging materials company API (API) warned in April that investors shouldn't expect much from these results, largely because of a surprise slump in orders from the US metallic pigment industry during the fourth quarter. Underlying pre-tax profit duly fell 5 per cent to £6.3m. But the second half was a belter, with profit up 15 per cent. Crucially, that momentum has spilled over into the current financial year.
For all its problems, higher-margin work and flat costs limited the drop in profit at the American foils business to 11 per cent. It is "unclear" how long the situation will last, says chief executive Andrew Turner, "and it will be challenging to hold numbers in the US". Other areas are, however, expected to pick up, especially holographics, the division which lost £0.7m last year. Cost-cutting returned it to break-even in the final quarter, and a trade show later this month should generate interest. Elsewhere, a new supply contract at API's laminates business pushed profit up 3 per cent to £6.7m, while the European foils unit enjoyed a better second half.
Broker Numis Securities, which is currently reworking forecasts, downgraded adjusted pre-tax profit estimates for 2015 in April to £7.5m, giving adjusted EPS of 8.6p (from 7.8p).
API (API) | ||||
|---|---|---|---|---|
| ORD PRICE: | 72p | MARKET VALUE: | £55.2m | |
| TOUCH: | 70-73p | 12-MONTH HIGH: | 81p | LOW: 63p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 10 | |
| NET ASSET VALUE | 34p* | NET CASH: | £0.2m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 79 | -0.3 | 3.4 | nil |
| 2010 | 100 | 2.9 | 3.5 | nil |
| 2011 | 114 | 5.1 | 6.7 | nil |
| 2012 | 112 | 5.6 | 7.6 | nil |
| 2013 | 115 | 5.6 | 7.4 | 2 |
| % change | +2 | - | -3 | - |
Ex-div: 9 Jul Payment: 1 Aug *Includes intangible assets of £5.2m, or 7p a share | ||||
