Tipped in the IC24 Jun 2015 08:49
Should provide a nice boost, particularly on Friday:
"Hayward Tyler (HAYT) celebrated its 200-year anniversary by posting its best performance since listing in 2010. But despite original equipment and after-market revenues both growing 13 per cent due to strong power and nuclear markets, shares in the pump and motor manufacturer tumbled 5 per cent.
"It's been another year where we've exceeded expectations," says chief Ewan Lloyd-Baker, arguing the business was "marked down" for the market perception of its oil and gas exposure. At 8 per cent of revenues Mr Lloyd-Baker describes this part of the business as "small", and maintains that even a lower oil price is not enough to derail demand for the group's efficiency-boosting subsea and submersible motors. Nevertheless, delays in oil and gas infrastructure spending did hinder sales in Europe.
There were no such problems for the group's core markets. Nuclear profited from a big order to replace nuclear parts at two South Korean reactors, while Hayward's power operations enjoy a bulging pipeline of new power plants in China and India. While the development of a new centre of excellence in Luton is expected to expand capacity and vastly improve efficiencies.
Broker finnCap expects adjusted pre-tax profit of £5m in the year to March 2016, giving adjusted EPS of 8p (up from 7.5p in FY 2015).
HAYWARD TYLER (HAYT)
ORD PRICE: 81p MARKET VALUE: £37m
TOUCH: 80-82p 12-MONTH HIGH: 95p LOW: 63p
DIVIDEND YIELD: 1.6% PE RATIO: 12
NET ASSET VALUE: 34p* NET DEBT: 51%
Year to 31 Mar Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2011** 32 -3.1 -12.9 nil
2012** 33 1.3 1.2 nil
2013† 40 1.5 0.3 nil
2014 43 3.8 5.0 1.25
2015 49 4.4 7.0 1.32
% change +13 +15 +39 +5
Ex-div: 13 Aug
Payment: 28 Aug
*Includes intangible assets of £3.3m, or 7p a share **December year-end figures †15-month period
IC VIEW:
The shares are up 9 per cent on our buy tip (74p, 22 May 2014), yet trade on just 10 times forecast earnings. Given the strength of the business, and the exciting prospects of the new centre in Luton, we see no reason to change our tune. Buy."
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