11 September 2017 – interim results
The group has reported interim results covering the six months to 30 June revealing revenues of £9.6m (H1 2016: £6.6m) with pre-tax profits rising to £0.94m (H1 2016: £0.01m). Earnings per share rose sharply to 2.84p (H1: 0.04p) but no dividend was declared as the company believes it is better served to retain cash for working capital and investment purposes. At the end of the period the group had net cash balances of £1.1m (H1 2016: £2.6m) with the decline in cash caused by the significant production being required to fulfil key contracts. At the end of the period the group’s order book stood at £42m with £35m of this due to be delivered in the next three years. The only real negative with the results was the news that a UK contract has been delayed which will result in lower revenues in 2017 although this is just a timing issue and the revenues will simply fall into next year. The group’s clients include the likes of Lockheed Martin and the Canadian Department of National Defence and these two customers have both recently extended contracts thus increasing future revenues. With the shares standing on a forecast 2017 p/e ratio of just 12.2x we continue to rate the shares as a BUY.