Elektron

Technology group Elektron (EKT) has unveiled better than expected  full-year results, bolstered by last year's acquisition of Hardest Holdings.

The Essex-headquartered concern reported pre-tax profits of £3.6m (2010: £200,000) on sales of £50m (2010: £29.9m) for the year to January, also reporting an increase in earnings from 3p to 4.2p a share and a full year dividend of 0.8p a share (2010: 0.5p). The company also declares it intends to change its name to Elektron Technology.

Chairman Keith Daley enthuses that Elektron has produced 'record sales and profits'. He adds that 'even without the acquisition there is good underlying growth' and notes that sales in the UK rose from £12.9m to £21.3m, while turnover in Asia Pacific and China had climbed from £3.95m to £9.15m.

Daley adds that while the 'Old Elektron' was 'very UK-centric' the new business now has '20 sales people in China with our employees also overseeing work in territories including Latin America'. Looking forward, he identifies a number of targets for the business. These include seeking out a number of new acquisitions, in particular a company 'that could increase our size by between 50 to 99%' and plans to expand in Latin America, India and Germany, where he notes the company holds a relatively small share of the connector market.

Following the results, analysts at house broker finnCap have held their sales and profits forecasts for 2012 and 2013, while lifting their dividend forecast for 2012 from 0.9p to 1p a share. The broker is pencilling in profits of £6.7m on turnover of £70m in 2012, with profits of £7.5m on revenue of £77m forecast for 2013. with earnings of 4.7p and 5.3p forecast for 2012 and 2013, respectively.

Trading at under ten times earnings, offering a yield of 2.3% and with some ambitious growth prospects both via acquisitions and geographically, we think the shares represent good value for money. Buy.