Companies: TSW   

Titan Europe, the maker of 'off-highway' wheels for construction and agriculture, delivered outstanding figures for the year to December, its first annual numbers since flotation at 125p last April. Profits before tax, goodwill and exceptionals accelerated by 83% to £9.2m, on a 20.4% sales jump to £107.1m. Furthermore, healthy cash generation reduced net debt from £19.2m to £16.3m. The improved figures reflected buoyant markets, rising selling prices in the wake of unprecedented raw material cost hikes, a strong early contribution from Andys, an Australian venture acquired last September for £3.7m in cash and shares, as well as a first full year from Titan Australia. Although the Western European market grew only modestly, Titan saw strong demand in the North and South American, as well as the Eastern, markets on the back of bumper demand for agricultural and construction vehicles in those regions. Encouragingly Titan's associate venture Wheels India (it holds a 35.9% stake) enjoyed 58% sales growth. Looking ahead, the big challenge will be input costs - management is prepared for a rising steel price, 'though not nearly as much as last year'. The market 'continues to look strong' and order books 'are at levels which suggest a continuation of the trends seen in 2004'. Shop broker Seymour Pierce has upgraded 2005 forecasts in the wake of these sterling numbers. Alan Matthews envisages profits of £10.2m, earnings 15.5p and a 5.5p payout, for an undemanding forward multiple of 11.4. Good value.