Management at Porvair (PRV) highlighted record annual revenues through to November, which contributed to an annualised growth rate of 10 per cent over the past decade. But it could just as easily have pointed to a tightening regulatory backdrop as a central plank of the industrial filtration specialist's investment case.
In any case, these results showed another double-digit hike in the top line, but a scramble to meet orders for the aerospace and industrial division – where sales were up by 28 per cent - fed through to a 127 basis point reduction in the gross margin. Expansion comes at a cost.
The surge in divisional revenues was largely attributable to the sale of spare parts for filtration systems used in gasification projects. But while repeat orders are expected, their timing is unpredictable and demand is expected to dip in the current financial year. Sales of emissions control filters were helped along by stiffer maritime regulations, though it is unclear whether this will be a temporary effect. But even if comparable sales in the division are held in check due to these reasons, the group will benefit from a full-year contribution from Royal Dahlman, a newly-acquired Netherlands-based business.
Peel Hunt gives adjusted EPS of 26p for the year to November 2020, rising to 26.7p in FY2021.
| PORVAIR (PRV) | ||||
| ORD PRICE: | 774p | MARKET VALUE: | £ 356m | |
| TOUCH: | 772-778p | 12-MONTH HIGH: | 796p | LOW: 457p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 207p* | NET CASH: | £4m | |
| Year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 96.0 | 9.2 | 15.5 | 3.5 |
| 2016 | 109 | 10.1 | 17.1 | 3.8 |
| 2017 | 116 | 11.7 | 19.5 | 2.7 |
| 2018 | 129 | 12.0 | 22.1 | 3.0 |
| 2019 | 145 | 14.0 | 23.6 | 3.2 |
| % change | +13 | +16 | +7 | +7 |
| Ex-div: | 30 Apr | |||
| Payment: | 5 Jun | |||
| *Includes intangible assets of £71.5m, or 155p a share. | ||||
