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Dewhurst: outstanding results
Posted 03/12/09
Dewhurst, which recently celebrated its 90th birthday, issued what surely should be considered an outstanding set of full year results for the year ending 30th September 2009.
The group is an independent supplier of quality components to the lift, keypad and rail industries. The company was founded in 1919 and the Dewhurst Group now employs over 300 people in locations around the world.
Sales were down just 1.4% to £35.8m and profits before tax were down 5.4% at £4.4m. The figures were the second best in the company’s history and, in this writer’s opinion, an outstanding performance in the circumstances. Operating profit rose 3.7% to £4.5m reflecting the increase in margins to 12.6% (2008: 12.0%) and setting a new group record.
The second half was the opposite of the first half, with sales lower in the UK and North America, while in Australia sales recovered from the poor first half figures. The deterioration in UK output was expected given the decline in orders in the first half, reported in the interim statement.
Management commented that short term 2010 is likely to be more challenging than 2009 with continual pressure on prices and costs. Project related demand is beginning to tail off as few new projects have been started in the last year. They are also likely to be affected by the coming squeeze in UK public finances, as directly and indirectly the public sector is an important proportion of the group’s UK sales.
Probably the biggest negative surrounds the pension deficit with significant changes in the valuation of the group’s scheme assets and liabilities which resulted in the overall scheme deficit increasing from £3.7m to £6.1m. The group continues to pay a fixed sum of £0.5m annually to reduce the fund deficit.
Cash generation was, as usual, excellent with the group generating £4.7m cash from operations resulting in a year end net cash position of £7.5 million, up £2.4 million.
The total dividend for 2009 was 6.06p per share, up 5.2% against last year, covered 6.3 times by earnings.
Net assets at year end were £19.5m of which net tangibles were approx £13.3m. The current market capitalisation is approximately £19m based on the 2 share classes!
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