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Avingtrans

  • BY: Andrew Hore |
  • POSTED: 10/02/2010 |

KBC Peel Hunt has cut its profit forecast for Avingtrans for the second time in five months.

The latest reduction comes after the engineer reported an interim loss. The 2009-10 profit is expected to be £1.4m, compared to £2m previously and £2.5m at the beginning of September 2009.

This still represents a strong improvement in the second half and the optimism is underpinned by a rising order book.

Revenues fell 23% to £13.5m in the six months to November 2009. A profit of £417,000 was turned into a loss of £61,000. That loss was struck after a warranty claim of £932,000 relating to a past acquisition and restructuring costs of £145,000.

Net debt has fallen by £1.6m to £8.5m.

Avingtrans is finalising a contract with Cummins (Power Generation) and it is now able to supply nuclear components to Areva.

At 37.5p a share, Avingtrans is valued at £9.56m and the shares are trading on seven times prospective earnings for 2009-10.

Chairman Roger McDowell has acquired 60,000 shares at 35.8p each, taking his stake to 8.9%. Chief executive Steve McQuillan bought 15,000 shares at 36p each and non-exec Jeremy Hamer acquired 10,000 shares at 35p each.

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