Electronic manufacturing services provider Stadium increased interim pre-tax profits by a creditable 13% to £1.4m, despite a 5% decrease in sales within its branded plastics division.

For the half to June, profits increased from £1.24m to £1.4m, on turnover of £23.06m (£19.88m), with earnings increasing by more than 8% to 3.9p per share, allowing the board to propose a 4% dividend hike to 1.25p.

Disappointment within the branded plastics arm reflected flagging demand for building products and baby care products, as well as the rising cost of oil and energy, both key to plastics production.

However, growth in the electronics and power divisions more than offset the lacklustre plastics arm performance, driven primarily by the acquisitions of power supplies maker Ferrus in June ’07 and power supplies distributor KRP Power Source in 2006.

Stadium’s performance in Asia was particularly strong, with electronics sales increasing from £9.4m to £11.9m and turnover in power moving to £550,000 (2007: £390,000).

Nigel Rogers, chief executive, insists Stadium is in a good position to make further acquisitions given its strong, ‘virtually ungeared’ balance sheet and healthy market position.

Based on full year forecasts – pre-tax profits of £2.8m and EPS of 7.6p – Stadium trades on a p/e multiple of 6.7, which looks undemanding for a robust, growing and dividend-paying counter.

Stadium Group	AIM	£11.95m	41.50p	0.00p
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