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Armour Group

  • BY: Andrew Hore |
  • POSTED: 28/11/2009 |

Armour Group produced better than expected profits for the year to August 2009.

The consumer electronic products supplier did well to continue to be profitable especially as the automotive-related business was tough.

The majority of the profits come from the home electronics market with the automotive division making a small contribution. The television stands business is becoming increasingly important to the company and the home office furniture range is starting to generate significant revenues.

Overall revenues fell 4% to 51.6m in the year to August 2009. Profits fell more sharply from 3.49m to 1.12m.

Armour has significant buying and sourcing expertise. Chief executive George Dexter reckons that Armour can still buy many items 20% cheaper than Tesco. This helps Armour to maintain healthy margins.

Net debt was reduced from 8.87m to 4.89m at the end of August 2009. The profits were turned into cash and there was a sharp reduction in working capital. Armour still managed to capitalise 1.85m on developing new products during the year. The dividend has been reduced from 0.65p to 0.3p a share.

At 15.25p share, Armour is valued at 10.4m. House broker FinnCap forecasts profits of 1.9m in the year to August 2010, which values Armour at just over seven times prospective 2009-10 earnings.

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