For a listed company, the problem with overachieving is that investors come to expect too much. Quixant (QXT) has slipped into this category when it came to its first-half results. Investors fled the stock after the gaming hardware maker failed to upgrade the full-year outlook, despite reporting a 74 per cent leap in first-half adjusted cash profit to $10.1m (£7.5m), well ahead of management expectations.
Quixant's machine making clients stocked up in the first half, boosting its volumes. "Now they have a lot of product to shift,” said chief operating officer Jon Jayal. This means ordering could be lighter than usual in the second six months of the year, which are traditionally stronger.
But the exceptional growth in the reported period means Quixant is easily on track to meet full-year expectations. Broker finnCap has, for now, reiterated pre-tax profit and EPS forecasts of $15.8m and 18.5ȼ in the year to December 2017 (from $13.8m and 16.4ȼ in 2016).
Quixant remains prepared for the industry's traditional winter rush, by investing heavily in stock. “If we do get the last-minute demand in December, we need to be ready," adds Mr Jayal. That investment tapered operating cash inflows to $4.3m from $6.1m in 2016, but the group still managed to pay down a chunk of its debt and swing back into a net cash position.
| QUIXANT (QXT) | ||||
| ORD PRICE: | 405p | MARKET VALUE: | £267m | |
| TOUCH: | 395-415p | 12-MONTH HIGH: | 483p | LOW: 270p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 62ȼ* | NET CASH: | $1.7m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
| 2016 | 41.3 | 4.4 | 5.4 | nil |
| 2017 | 56.9 | 8.7 | 11.2 | nil |
| % change | +38 | +99 | +110 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of $14.1m, or 21ȼ a share £1=$1.35 | ||||
