20/10/2004
Clive Snowdon, chief executive of UMECO, is greatly enthused about the company's growth prospects. Shares in the aerospace parts-to-composites play were sent into a tailspin by all manner of international events, from the 9-11 disaster to SARS and most recently the war in Iraq. But Snowdon, despite having a reputation for caution, is in upbeat mood, pointing to the recovery in the new commercial aircraft production, the trend towards components outsourcing and the rising use of exciting composite materials in aircraft manufacturing. On the outsourced parts front, UMECO's January supply deal with Bombardier Aerospace should build up over the next few years, adding to revenues from contracts with the likes of Rolls Royce and the US Department of Defence. UMECO's second largest division is composites, a high-margin part of the business supplying advanced, lightweight, strong and cost-effective materials to aerospace and a range of other markets. The £44m acquisition of Advanced Composites Group in April, part-funded by a well supported rights issue, puts UMECO right in the mixer in this market. Last year to March, UMECO made £9.6m pre-tax on a £185m top line. This year, Arbuthnot's Michael Blogg predicts a jump to £14m on turnover of £250m, giving EPS of 27.8p and a 12.85p payout. On those estimates, the shares trade on a multiple of 14.5, just below the sector average, and yield a prospective 3.2%. Notwithstanding aerospace cyclicality, UMECO looks intriguing from both recovery and growth perspectives. A strong buy ahead of imminent interims.
| Market cap: | £131m |
| PE Forecast: | 14.5 |
| Share price: | 403p |
| LSE | £125.15m |
260.00p
|
1.50p
|
|
| Other company articles: |
| 27/11/2008 |
| 15/11/2007 |
| 03/11/2006 |
| 11/07/2006 |
| 09/06/2006 |
Manage Your Finances
Money, tax and benefits : your official guide.
