14/05/2008
Chloride, the secure power solutions business recommended by Growth Company Investor at 101.75p in the summer of 2006, has proved a very successful recommendation indeed.
A recent surge in the share price reflects excitement regarding a possible bid war for the business, with Chloride having spurned a 255p-per-share cash offer from US-based technology group Emerson Electric on the basis of its undervaluation of the business.
The rebuffing reflected strong prospects for Chloride as an independent, based on positive recent trading, a robust business model and clear strategy. The company appears to be an appealing strategic morsel for predators, given its strong market positions in geographies and high-growth sectors where secure power is ‘increasingly critical to business continuity’, such as IT services, data centres, energy, and oil and gas. Blue-chip customers across Europe, Asia, Australia as well as North and South America, add to its allure.
A recent pre-close update from the company provided investors with many positives. Within, it said full-year results to March 2008, set for publication in June, would beat management expectations, with sales for the year coming in around 30% ahead of last year’s £204.4m and operating profits 50% above last year’s £23.5m, following a year in which organic sales growth was ‘well ahead’ of the wider market.
Moreover, the company flagged up a record order book of around £100m, representing high visibility for investors, as well as continuing business momentum in key sectors. Investors who bought on our advice may well have booked some profits. Now, however, we urge you to sit tight with upside likely from bid excitement.
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| Market cap: | £692.9m |
| PE Forecast: | n/a |
| Share price: | 268.75p |
| LSE | £649.87m |
252.00p
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-6.50p
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| Other company articles: |
| 14/05/2008 |
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