News blog
Cinpart
- BY: Andrew Hore |
- POSTED: 13/05/2008 |
Cinpart made higher profits than expected in 2007.
Cinpart makes gas ignition, spark generators and other components for gas appliances in its factory in Thailand. It plans to acquire more small companies making this types of components and transfer production to Thailand.
Revenues edged up from £2.75m to £2.82m while a loss of £296,000 was transformed into a profit of £114,000. This was even higher than the £85,000 profit indicated in February’s trading statement. Higher gross margins and reduction in overhead helped in the turnaround. That profit was struck after £78,000 compensation to the former chief executive.
Gross margins have improved further during this year. Management is also investing in equipment that will bring more of the work in-house. That should help improve margins further.
Following the results non-executive director Christopher Foster bought 50,000 shares at 3.5p and 50,000 shares at 3.75p. That takes his stake to 8.22%.
Management believes that there are a number of potential acquisitions in the UK. It is already looking at some opportunities. Profitable businesses where the founders want to sell up are ideal targets. Ideally they will have turnover of between £500,000 and £1.4m. There is plenty of spare capacity in the Thailand factory and margins will benefit from pushing more work through the factory.
At 3.75p a share, Cinpart is valued at £1.2m. Analysts forecast profits of £271,000 on revenues of £2.98m in 2008. That puts the shares on less than three times prospective earnings.
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