Zytronic (ZYT) continued to benefit from the introduction of touchscreen technology in ATMs, vending machines and casino slots in the year to 30 September. Strong sales of lucrative touch sensors, together with cost control and increased efficiency, widened the manufacturer's gross margin by 5.3 percentage points to a record 41.9 per cent. The upshot was a 39 per cent rise in operating profit to £4.6m.
Touch revenue leapt 16 per cent to £17.3m as customers clamoured for larger sensors. Zytronic also benefited from strong demand for ATM units, vending machine companies upgrading to the new Coca-Cola Freestyle touchscreen machines, and strong appetite from casinos in Las Vegas and South Korea for large, interactive slot machines. Meanwhile, Zytronic's non-touch product sales were flat as banks installed touchscreens in ATMs rather than the group's display filters.
Improved cash generation allowed the group to invest £1.3m in product development and equipment and expand its main manufacturing space by a quarter to 10,000 square feet. Management also opened a sales office in Taiwan to tap the Asia Pacific market.
Broker N+1 Singer bumped up its forecasts and now expects pre-tax profit of £4.7m for the financial year to September 2016, giving EPS of 25.2p (from £4.5m and 24.3p in FY2015).
| ZYTRONIC (ZYT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 392p | MARKET VALUE: | £60m | |
| TOUCH: | 388-395p | 12-MONTH HIGH: | 405p | LOW: 254p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 135p | NET CASH: | £9.8m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 20.5 | 3.6 | 18.3 | 7.70 |
| 2012 | 20.4 | 4.2 | 22.2 | 8.50 |
| 2013 | 17.3 | 1.9 | 11.1 | 9.10 |
| 2014 | 18.9 | 3.3 | 19.6 | 10.01 |
| 2015 | 21.3 | 4.5 | 24.7 | 12.01 |
| % change | +13 | +39 | +26 | +20 |
Ex-div: 25 Feb Payment: 11 Mar | ||||
