08/03/2006
Under new management, Heywood Williams has restructured and focussed as a specialist distributor of branded building products. For the year to December, overall losses were £18.8m, although ongoing turnover edged up 6.4% to £262.7m, and profits before restructuring costs rose 25% to £9.4m.
Robert Barr, the ex-Diageo man drafted in as chief executive in 2004 to turn things round, said the sale of the loss making plastic systems division completed the restructuring.
During 2005, all the main markets were ‘dynamic’. North America grew off the back of the emergency housing crisis in the wake of one of the most destructive hurricane seasons on record, with the group’s LaSalle Bristol arm responding ‘quickly and creatively’ by meeting demand from manufactured housing and motor home customers to build shelter.
The Federal Emergency Management Agency (FEMA) ordered some 20,000 manufactured houses and 125,000 caravans, for which LaSalle supplied air conditioning ducts, vinyl flooring and lighting. Barr insists the business enjoys good compound growth and market penetration, even without such exceptional events.
There was a drop off in the UK hardware market – Heywood Williams supplies hardware and door panels, and the market fell 15% last year – but other European markets such as Ireland and the Baltics were buoyant.
Though profits will appear to be going backwards in 2006 (£8.7m is forecast) and the lack of a dividend is a short-term concern – the US remains in growth mode, hardware is set to return to growth in 2007, and Barr is on the lookout for deals. On ’07 forecasts – profits of £9.4m and 7.7p of earnings – the forward p/e of 13 looks attractive. Add.
| Market cap: | £78.48m |
| PE Forecast: | 13 |
| Share price: | 100p |
| LSE | £2.76m |
3.25p
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0.16p
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| Other company articles: |
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