Porvair (PRV) has kicked off its financial year with two acquisitions. A deal for Netherlands-based robotics company Rohasys will automate the way samples are handled in Porvair’s laboratories. A second purchase, Keystone Filter, incorporates a manufacturer of filter cartridges for industrial process, food, beverage and nuclear markets in the US. The latter is expected to generate at least £4m in revenue each year from its existing customer base, although chief executive Ben Stocks was equally keen to cite the deals' additions to the company's portfolio of intellectual property and products.
Complimenting this was a solid, if not sparkling, period of trading. Sales in the aerospace and industrial division rose 6 per cent to £21.7m, thanks in part to a major US nuclear order received during the final quarter of 2017. However, the segment's underlying operating profit declined 3 per cent to £2.4m – a move apparently "obscured" by a one-off £0.8m profit booked in the prior year. Sales in the laboratory division improved by a fifth to £20.3m thanks to strong momentum in the order book, while improving underlying profitability in the metal melt quality business was held in check by a loss-making Chinese division. Mr Stocks said the Chinese market is “price sensitive”, but Porvair is beginning to see signs of improvement.
Mr Stocks' broader optimism for the remainder of the financial year has been fuelled by a “healthy order book”, including good demand for 3D printed ceramic filters. Organic growth will focus on new product launches, while the recent regulatory approval for the new nuclear HEPA filter paves the way for accelerated production during the remainder of 2018.
Analysts at Peel Hunt have upgraded forecasts and now expect pre-tax profit of £12m in the year to November 2018, giving EPS of 20.3p, compared with £11.7m and 19.4m in FY2017.
| PORVAIR (PRV) | ||||
| ORD PRICE: | 498p | MARKET VALUE: | £228m | |
| TOUCH: | 489-498p | 12-MONTH HIGH: | 576p | LOW: 420p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 175p* | NET CASH: | £2.2m | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 55.5 | 4.86 | 8.3 | 1.5 |
| 2018 | 59.7 | 5.24 | 10.7 | 1.6 |
| % change | +7 | +8 | +29 | +7 |
| Ex-div: | 26 Jul | |||
| Payment: | 31 Aug | |||
| *Includes intangible assets of £64.9m, or 142p a share | ||||
