Shares in Swallowfield (SWL) rose strongly, after the developer of personal care and beauty products recorded a 31 per cent hike in constant-currency revenue, reduced net debt, and highlighted the full integration of ‘The Brand Architekts’, acquired last year. A "reshaping of the business towards stronger growth and margins" has delivered a near threefold increase in underlying operating profit to £5.6m, while management noted that the substantial dividend hike was in keeping with its progressive forward policy.
The group has two revenue streams: manufacturing and owned brands. The former division, which creates products for other brand owners, saw record sales; new product development and contract wins are expected to continue to drive good performance. Owned brands benefited from The Brand Architekts purchase, while Swallowfield’s original brands also grew solidly. The overall division now comprises 24 per cent of the group’s top line. A total of 78 new lines were launched across 11 brands, and management notes owned brands is the fastest-growing revenue stream.
Analysts at broker N+1 Singer forecast adjusted pre-tax profit of £5.1m and EPS of 23.8p for the June year-end in 2018, up from £3.6m and 17.3p in FY2017.
| SWALLOWFIELD (SWL) | ||||
| ORD PRICE: | 318p | MARKET VALUE: | £53.7m | |
| TOUCH: | 310-325p | 12-MONTH HIGH: | 420p | LOW: 228p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 130p* | NET DEBT: | 16% | |
| Year to 24 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 48.6 | -1.33 | -8.1 | 2.2 |
| 2014 | 50.0 | 0.14 | 1.4 | 0.0 |
| 2015 | 49.4 | 0.81 | 6.6 | 2.0 |
| 2016 | 54.5 | 2.27 | 17.7 | 3.1 |
| 2017 | 74.3 | 3.12 | 15.2 | 5.2 |
| % change | +36 | +37 | -14 | +68 |
| Ex-div: | 16 Nov | |||
| Payment: | 8 Dec | |||
| *Includes intangible assets of £9.1m, or 54p a share | ||||
