BROKER UPGRADE4 Dec 2009 07:58
Redhall Group (RHL, 138p, £40.8m) prelims to 30 September 2009 came in line with our expectations. Revenues up 49% to £129.0m (2008: £86.7m), adjusted PBT up 39% to £6.5m (2008: £4.6m) and adjusted EPS up 3.5% to 16p (2008: 15.4p). The group proposes a 10% increase in DPS to 4.4p, which demonstrates the group’s strong cash generation (net cash £6.3m) and confidence in the business (order book of £115m). The group is well positioned in the Energy, Defence and Process markets, which offer prospects of long-term growth. Redhall continue to seek acquisitions and broaden its services by entering new areas of expertise in waste to energy and carbon fibre, a growing market. The market forecasts 2010 PBT of £7.1m, EPS of 16.9p and DPS of 4.8p, which puts the group on 8.2x and a yield of 3.5%. We upgrade our recommendation from a Hold to a BUY.