News blog
Chamberlin
- BY: Andrew Hore |
- POSTED: 27/05/2012 |
Castings supplier Chamberlin has rebuilt its revenues and earnings to above their levels prior to the recession.
Revenues rose 14% to £45.5m, while underlying pre-tax profit more than doubled to £1.7m. This shows the operational gearing of the business. Up to 30% of additional revenues drop through to profit.
Chamberlin continues to benefit from growing sales of turbocharger castings. There is a potential new market for turbine casings which could be made on another company site.
There is still plenty of spare capacity and the light castings business in Walsall could double production before it required significant capital spending. The Jebron door security hardware business acquired from administrators made a positive contribution to the engineering division.
Finances are strong and the total dividend has been increased from 1p a share to 3p a share. The dividend should continue to grow. Cash generated from operations increased from £1.8m to £2.4m. This helped to cut net debt by 46% to £1.6m.
There is still a pension liability of £3.06m. Management hopes to eliminate the liability by 2020.
At 161.5p a share, Chamberlin is valued at £12.8m. A profit of £2.2m is forecast for 2012-13, which puts the shares on eight times prospective earnings.
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