12 December 2017 – final results
The specialist engineering group has announced its results for the year to 30 September revealing that revenue rose by 7% to £38.4m (2016: £35.8m) whilst adjusted pre-tax profits increased to £0.76m (2016: adjusted pre-tax loss of £0.48m). Earnings per share on the same basis were 6.3p but there was no dividend. The results have benefited from actions taken by management over the last three years to reduce costs to cope with the downturn in the oil and gas markets and headcount at the group has fallen by 40%. The oil and gas markets now seem to be improving though and the group has been encouraged by this as it saw a significant pick up in the second half of the year. That has continued into the new financial year. The group has also been expanding its activities in the biogas market whilst it is also working on the design of cylinders for the Dreadnought nuclear powered submarines for the Ministry of Defence. Although net debt at the year end was up to £11.1m (2016: £6.6m) the group raised £4.8m after the year end through an equity issue and this puts it in a stronger financial position going forward. A strong recovery is expected in the current financial year with pre-tax profits forecast to rebound to £3.7m for earnings per share of 13.8p. We re-iterate our recommendation of BUY.