Armour Group says that it has traded profitably in the first four months of this year, although market conditions have been tough.
The consumer electronics and automotive accessories supplier continues to add distributorships and secure new contracts. The turbulent market should provide opportunities to widen the product range.
New product launches should help to drive sales in the second half.
The exchange rate is a significant problem because most of the company’s products are bought in dollars or Euros. Armour appears to have weathered the problem in recent months and it is trying to push through price increases. The cost base is being reduced.
FinnCap is sticking with its forecast of profits of £1.65m in the year to August 2009, down from £3.5m last year.
At 7.75p a share, Armour is valued at £5.31m. The shares are trading on four times forecast earnings because investors worry about the exposure to the consumer market.
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