The bare bones of Porvair's (PRV) half-year performance were laid out earlier in June, but the statutory release shows a 12 per cent increase in gross profit to £18.3m on a 170 basis point improvement in the underlying margin. Sterling's decline had a favourable effect as the lion's share of contracts are struck abroad, while just 36 per cent of revenues were linked to kit manufactured in the UK by the filtration and environmental technology specialist.
Overall profitability was held in check by continuing losses from a new metals filtration plant in China, as the environmental benefits of the group's equipment are taking a back seat to pricing considerations for local aluminium producers. Nonetheless, revenues at the metals filtration division still grew strongly on the back of increased demand from the global aluminium market.
Porvair has continued to expand manufacturing capacity, reflected in a 70 per cent increase in the aggregate outlay covering acquisitions and capital expenditure. This included a new facility for Seal Analytical in the US and the commissioning of a new machining cell for aviation filters in the UK. The group also broadened its product offering at the start of April, when it bought JGF, a US-based manufacturer of specialist laboratory consumables including vials and filters.
Peel Hunt expects adjusted pre-tax profits of £10.8m for the November 2017 year-end, leading to EPS of 18.3p, against £10.1m and 17.1p in FY2016.
| PORVAIR (PRV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 570p | MARKET VALUE: | £258m | |
| TOUCH: | 570-590p | 12-MONTH HIGH: | 610p | LOW: 310p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 160p* | NET CASH: | £4m | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 52.1 | 4.5 | 7.5 | 1.4 |
| 2017 | 55.5 | 4.9 | 8.3 | 1.5 |
| % change | +7 | +9 | +11 | +7 |
Ex-div: 27 Jul Payment: 1 Sep *Includes intangible assets of £59m, or 130p a share | ||||
