Strip out costs associated with consolidating facilities and managing the pension deficit and trading profit at Scapa (SCPA) soared 18 per cent to £10m in the six months to September 2015. But chief executive Heejae Chae was in a sober mood, insisting the manufacturer of bonding tapes simply achieved what it said it would.
In healthcare, focusing on skin-friendly solutions in areas of advanced woundcare, medical devices, consumer wellness and drug delivery paid off nicely, particularly as industry-wide outsourcing is on the rise. The upshot was trading profit increasing by a fifth to £6.5m, as divisional sales surged 21 per cent to £43m.
Elsewhere, Scapa managed to maximise returns from an industrial unit suffering from weak global economic growth - two-thirds of divisional revenue is driven by GDP expansion. But, according to Mr Chae, a focus on stronger areas such as the automotive market succeeded in limiting turnover losses to just 4 per cent. Careful cost management, including the consolidation of two facilities in France, boosted trading profit by 13 per cent to £5m. Management argued this performance defied the arm's cyclical reputation.
Broker Numis Securities expects adjusted pre-tax profit of £19.8m for the year to March 2016, giving EPS of 10p, up from £17.9m and 9.1p, respectively, in 2015.
| SCAPA (SCPA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 198p | MARKET VALUE: | £292m | |
| TOUCH: | 197.5-198p | 12-MONTH HIGH: | 225p | LOW: 124p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 45p* | NET DEBT: | 10% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 115 | 6.2 | 2.7 | nil |
| 2015 | 119 | 3.3 | 1.4 | nil |
| % change | +4 | -47 | -48 | - |
*Includes intangible assets of £37.9m, or 26p a share | ||||
