Having returned 30p per share of cash to investors a year ago, there is little left to recommend magnet manufacturer Wilshaw. Results for the year to March showed profits before tax cut from £749,000 to £504,000, with almost half of that coming in interest payments on the group's £4m cash pile. Operating margins were wafer-thin at 2.7% as turnover fell from £11.9m to £9.9m. The company is embarking on what it regards as a three-year project to reduce its traditional reliance on alnico magnet manufacturing (where the market is in inexorable decline due to techological advances elsewhere) in favour of soft magnetic components, sales of which actually increased by 17% last year. Wilshaw now has four soft magnetic components for diesel injection systems in full production and is working on a number of other projects for coming years, including for automatic braking systems, pumps and electronic valve actuation. R&D in soft magnetics in partcular is regarded as 'key to the future of the business'. However elsewhere further cuts are to be made, and it remains the case that the traditional alnico business is not in good shape. So future results cannot be expected to be good, with significant exceptional costs likely. The dividend payout of 1.4p for the year is a comfort, but isn't a reason to invest.

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