Homeserve 08/02/2012
Home maintenance and emergency repairs concern Homeserve has warned that its reduction in customer numbers is 3% higher than expected.
Beleaguered Surface Technology Systems has flagged up its largest-ever MEMS equipment order, worth £3m, from 'a major US-based customer'. MEMS are 'micro-electromechanical systems' and the supplier of high-tech processing equipment will supply multiple 'Advanced Silicon Etch' machines for the manufacture of MEMS components in this year's second half. But this upbeat news accompanied some truly awful annual figures for 2002 showing pre-tax profits of £5.3m swinging to a dramatic £9.9m loss - after exceptionals including a £5.4m inventory write off - on a 40% drop in turnover to £33.8m, after 'one a half years of rapid growth'. The tumbling sales reflected lower machine volumes sold as well as a poorer price per machine, as volumes fell away. Another bear point was the net cash outflow before financing of £4.1m, against a £2.4m outflow in 2001 - this took bank borrowings to a whopping £17.9m, more than six times the group's battered market caapitalisation. These borrowings, together with the losses, raised gearing from 86% to 207%. This year, chief executive Ian Smith expects trading will stay tough, but bull points for investors include the hefty costs taken out of the business already and the fact interest in STS' products remains, as evidenced by this huge US order confirms. There's little point in selling at this collapsed price, but the shares look unattractive for prospective investors right now. Avoid.
Market cap: £2.8m
PE Forecast: n/a
Share price: 9p
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Home maintenance and emergency repairs concern Homeserve has warned that its reduction in customer numbers is 3% higher than expected.
Performance materials specialist Low & Bonar (LWB) reported a 26% rise in profits amidst considerable growth in its yarns business.
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