Companies: LTC   

Despite concerns regarding the impact of restricted credit on both industry and commercial construction, Latchways, first backed here at 315p, currently sees no signs of slowdown in its markets.

World leader in a niche, legislation-driven market, namely the design, manufacture and sale of fall-protection safety systems for ‘at height’ workers in the UK, Europe and North America, its systems have diverse applications on everything from commercial rooftops to aircraft wings and wind-power turbines.

In spite of steel price rises and currency movements, annual numbers to March came in at the top end of analysts’ expectations, showing 10% turnover growth to £35.2m and 17% growth in underlying PBT to £9.1m. From earnings of 57.65p (2007: 50.55p), the total dividend (excluding special dividends) was raised to 21.3p (2007: 17.76p).

While the core business enjoyed yet another excellent year, results were held back by a disappointing performance from the Specialist Fixings division, though further recovery is predicted this year. Meanwhile, Latchways continues to invest for growth, having augmented its product range through the acquisitions of PVCu walkway systems provider Height Solutions and aluminium guardrails supplier Sigma 6, while organically launching a self-retracting lifeline range.

Closing out the year with £4.5m of net cash, this modestly priced company remains highly cash-generative and offers lofty earnings and income growth as well as special dividend potential (remember, an extra 30p per share was returned to investors during the year before last). Buy/hold.

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Latchways	LSE	£88.81m	798.00p	5.50p
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