Zytronic (ZYT) delivered broadly flat full-year revenues, compared with the previous 12 months, but with a 90 basis point improvement in the gross margin to 42.8 per cent. Reported profits for the touch-screen technology specialist were down on the 2015 financial year due to a non-cash charge of £0.9m in relation to forward hedging contracts which were marked to market. However, the group's decision to take part in a government tax scheme that reduces taxes on profits earned from patented inventions fed through into improved earnings.
The improvement in the gross margin reflects the transition towards a more favourable business mix. Though the number of touch sensor units sold by Zytronic fell from 149,000 last year to 130,000 this time around, a sales trend has been established towards larger touch-based products, incorporating higher-margin growth areas targeted by the group. Demand for gaming applications continues to strengthen, while sales into financial end-markets, though up on FY2015, were constricted by increased competition in the Asian ATM market. The greatest reduction in orders related to the 15" range utilised in vending applications.
The group's balance sheet remains in good shape with net cash up by £2.1m since the half-year mark, while cash generated from operating activities was up 14 per cent year on year to £5.6m.
House broker N+1 Singer gives adjusted cash profits of £6.5m for the year ending September 2017, leading to EPS of 28.6p (from £5.4m and 26.1p in FY2016).
| ZYTRONIC (ZYT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 390p | MARKET VALUE: | £60m | |
| TOUCH: | 385p-395p | 12-MONTH HIGH: | 437p | LOW: 315p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 151p | NET CASH: | £11.6m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2016 | 21.1 | 4.3 | 26.6 | 14.41 |
| % change | -1 | -6 | +8 | +20 |
Ex-div: 16 Feb Payment: 3 Mar | ||||
