In the space of one year, electronics and technology business Laird (LRD) has gone from “bumping up against its covenants constantly” – as chief executive Tony Quinlan put it – to agreeing a £1bn private equity cash takeover. The board is recommending to shareholders a 200p cash offer it received from an indirect subsidiary of private equity group Advent International Corporation. The offer represents a whopping 73 per cent premium to the undisturbed share price – which has since rocketed to match said offer price.
It’s an extraordinary recovery tale for a business that had to get tough last year, raising £185m via a “critical” rights issue to sort out an overstretched balance sheet. That’s not all. The number of divisions was trimmed down and most of the senior leadership team was replaced. Takeover aside, this paid off, with revenues up by nearly a fifth and underlying pre-tax profits up nearly a third to £67.3m. Even better, operating cash flow rose by 84 per cent to £51.8m – a reflection of both improved profitability and tight cost control.
Analysts have suspended forecasts in light of the proposed takeover.
| LAIRD (LRD) | ||||
| ORD PRICE: | 201p | MARKET VALUE: | £983m | |
| TOUCH: | 200-201p | 12-MONTH HIGH: | 204p | LOW: 112p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 117p* | NET DEBT: | 28% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013** | 537 | 43.2 | 8.9 | 9.24 |
| 2014** | 565 | 48.1 | 15.6 | 9.63 |
| 2015** | 630 | 15.4 | -2.4 | 10.01 |
| 2016 | 802 | -122 | -31.8 | 3.49 |
| 2017 † | 937 | 57.0 | 15.8 | 1.13 |
| % change | +17 | - | - | -68 |
| Ex-div: | na† | |||
| Payment: | na† | |||
| *Includes intangible assets of £561m, or 115p a share. **EPS and DPS adjusted for April 2017 £185m four-for-five rights issue. †No final dividend in lieu of proposed cash acquisition | ||||
