News of a significant acquisition failed to lift the spirits of Tyman’s (TYMN) shareholders on results day. The door and window components specialist rounded off a difficult year of trading by announcing a $101m (£72.7m) deal to buy Dallas-based Ashland Hardware. Investors were presumably not impressed to learn that the group’s latest US residential expansion plans will be part financed by issuing 17.8m new shares to institutional backers.
Tyman has a history of growing revenue through acquisitions. Without contributions from new businesses, and a helping hand from a weaker sterling, turnover grew just 1.7 per cent and underlying operating profit fell 1.5 per cent in 2017.
In fairness, tepid organic growth is understandable given the host of challenges that Tyman faced during the year. Drawn-out operational issues in Mexico had a devastating impact on the group’s core US division. And, closer to home, UK consumers, possibly nervy about the outcome of Brexit, continued to refrain from buying repair, maintenance and improvement products. These issues were further compounded by surging costs for key raw materials, although management hopes subsequent action to introduce price increases will absorb higher input costs in 2018.
Bloomberg consensus forecasts give pre-tax profit of £73.7m and adjusted EPS of 28.7p for the Dec 2018 year-end, rising to £79.4m and 30.9p in 2019.
| TYMAN (TYMN) | ||||
| ORD PRICE: | 301p | MARKET VALUE: | £536m | |
| TOUCH: | 301-302p | 12-MONTH HIGH: | 387p | LOW: 280p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 205p* | NET DEBT: | 45% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 298 | 0.8 | 0.6 | 6.00 |
| 2014 | 351 | 11.9 | 5.6 | 8.00 |
| 2015 | 353 | 15.6 | 4.6 | 8.80 |
| 2016 | 458 | 29.4 | 12.0 | 10.50 |
| 2017 | 523 | 34.5 | 17.6 | 11.25 |
| % change | +14 | +18 | +47 | +7 |
| Ex-div: | 19 Apr | |||
| Payment: | 18 May | |||
| *Includes intangible assets of £427m, or 240p a share | ||||
