Companies: LTC   

A leader in the manufacture and sale of fall protection systems for workers on buildings, bridges and telecommunications towers, Latchways continues to grow resiliently and has yet to see signs of slowdown.

Interim results to September revealed revenues up 14% at £19.3m and pre-tax profits increased 11% to £4.87m. From improved earnings of 30.1p, the interim dividend was increased to 7.81p (2007: 7.10p).

During another half of profitable trading and solid cash flows in all core parts of the business, acquisitions including ‘walkway’ system maker Height Solutions and Sigma 6, a Slovenian manufacturer of aluminium guardrails, made positive contributions. Stripping out the new walkway and guardrail products, underlying growth was encouraging at 9%.

Latchways’ installer business remained the growth ‘mainstay’, delivering strong performances in the UK and Europe, while the Wingrip product (used by the US military as well as Airbus and Boeing) grew revenues by 40%. One slight disappointment was a lull in the roll-out of systems to electricity transmission and wind power companies, although this is expected to pick up later in the year.

Latchways also said the notable 23% rise in administrative expenses was due to investment in sales, in order to drive growth from new products including the Self-Retracting Lifeline range.

While global slowdown and its potential to sap capital project spending represents risk, Latchways has yet to see any negative impact on its business, which is underpinned by legislative drivers. Moreover, half-time net cash balances remained robust at £3.7m.

First recommended by Growth Company Investor at 315p, Latchways is forecast to lift adjusted pre-tax profits to £10.2m (2008: £9.1m) in the year to March 2009, driving earnings north to 63.3p. Trading on a forward multiple of 10.9 times and offering a yield approaching 4%, Latchways remains a compelling buy/hold.

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Latchways	LSE	£47.6m	427.75p	12.75p
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