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Laird starts rebuilding trust

The electronics group is busy building trust with the market again following a recent emergency rights issue
Laird starts rebuilding trust

It’s been a hard year or so for Laird (LRD) but things are finally looking up now the company has completed its four-for-five 85p rights issue and got its once-stretched balance sheet back under control. Meanwhile, a 47 per cent rise in half-year adjusted pre-tax profit helped lift the shares by as much as 5 per cent following the release of half-year results.

IC TIP: Hold at 148.8p

Chief executive Tony Quinlan conceded that the first-half performance was “much improved” thanks to a continued focus on operational efficiencies, better leadership and restructuring the business into three clear divisions. Having scrapped its full-year dividend at the time of the annual results in March, the group also reinstated shareholder payouts, declaring a half-year dividend of 1.13p.

A 15 per cent foreign exchange tailwind helped lift the top-line considerably, but even on an underlying basis, revenue still rose 10 per cent thanks to strong sales growth across the performance materials and connected vehicle solutions divisions. Trimming costs also led to better operating margins, and a far better bottom line result.

Analysts at Numis expect adjusted EPS to fall to 7p for the year ending December, from 12.1p in 2016.

LAIRD (LRD)    
ORD PRICE:148.8pMARKET VALUE:£727m
TOUCH:148.8-149.3p12-MONTH HIGH:265pLOW: 95p
DIVIDEND YIELD:0.8%PE RATIO:na
NET ASSET VALUE:108p*NET DEBT:33%
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20163536.20.63.4881**
201744119.43.31.13
% change+25+213+450-68
Ex-div:2 Nov   
Payment:1 Dec   
*Includes intangible assets of £617m, or 126p a share
**Adjusted for four-for-five rights issue completed in April 2017