It has taken six years, but Acal (ACL) has finally completed its transition from a general electronics supplier into a designer and manufacturer of specialised electronics products for industrial customers. Instead of supplying spare hard drives to IT businesses, for example, Acal now makes and sells higher-value goods such as the temperature sensors that go into Nespresso machines.
Acal hived off the last of its non-core businesses this week with the £6m disposal of its IT supply chain division. Encouragingly, trading is also picking up at its specialist electronics businesses. All seven of the acquisitions Acal has made over the past five years are performing well.
Accompanying its financial results came news that Acal is further consolidating its position in the transformers and conductors market with the £73.5m purchase of Noratel, a Norwegian maker of electromagnetic products. It will be funded by a £55m rights issue and a new debt facility.
Chief executive Nick Jefferies told us he expects the deal to be "very significantly earnings enhancing". Broker N+1 Singer placed its forecasts under review, but noted that the disposal would probably "knock £1m off" its previous forecast for adjusted pre-tax profit of £8.5m for the year ending 31 March 2015, while Noratel would add £3m-£5m (from £7.4m in 2014).
ACAL (ACL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 345p | MARKET VALUE: | £108m | |
| TOUCH: | 336-350p | 12-MONTH HIGH: | 380p | LOW: 220p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 155p* | NET CASH: | £1.8m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 (restated) | 177 | 0.7 | 7.4 | 8.5 |
| 2014 | 212 | 4.2 | 11.8 | 9.35 |
| % change | +20 | +500 | +59 | +10 |
Ex-div: 11 Jun Payment: 31 Jul *Includes intangible assets of £25.5m, or 81p a share | ||||
