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Small cap gloom remains
After recent downbeat manufacturing news, some relief for engineers this month – official data showed manufacturing output grew at its fastest rate in nearly two years during April. The 0.9 per cent jump was the first hike in three months and almost twice what economists were expecting. The wider measure, industrial output, also spiked up more sharply than expected in April, by 0.7 per cent, its fastest rise since last October.
But the small company scene still looks pretty gloomy. Fledgling listed engineer Renold reported lower underlying profits for the year to 3 April, suffering from dull European markets and the weakening dollar, and plagued by the rising cost of oil and steel. 2005 estimates were snipped back on the figures, although analysts still see upside in the shares on internal profit improvements and their discount to the sector average. Depressed demand in UK plastics and exceptional costs caused Carclo to dive £6.55 million into the red in the year to March, although the group did reduce its debts.
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