2 March 2017 – final results
The results for the year to 31 December were very disappointing although this had been flagged up in the trading statement in December. Revenues at the group were £80.1m (2015: £87.0m) with the decline due to a low order book at the start of the year and the impact of customers delaying investment decisions for most of the year. As a result, adjusted pre-tax profits declined to £0.9m (2015: £3.8m) for underlying earnings per share of 3.7p (2015: 15.1p). Given the results, the company has decided not to pay a final dividend and conserve the cash for investment in the business. Although this is disappointing for income seekers the move does make sense as the group looks to recover. Despite the poor results, strong operating cash flow meant that the group had net cash of £0.8m at the year end (2015: net debt of £3.2m). Actions taken by management during the year have created a platform for an improved performance and strong order intake means that the group started the year with a significantly stronger order book. The current year is therefore likely to see a much improved performance with pre-tax profits rising to £3.3m for earnings per share of 13.3p. If these forecasts can be achieved the shares will look very cheap and we rate the shares as a buy for recovery with a share price target of 100p. BUY.