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William Sinclair

  • BY: Andrew Hore |
  • POSTED: 10/06/2013 |

House broker WH Ireland has sharply downgraded its profit forecast for horticultural products supplier William Sinclair following its interim figures. 

WH Ireland has cut its forecast from £1.5m to £300,000 for the year to September 2013, which is similar to the previous year. The 2013-14 profit forecast has been reduced from £3m to £2.5m – the level of profit made in 2009-10. A more normal year for the weather should make this achievable.

Sinclair had already warned that the interim figures would be disappointing due to the coldest spring for more than 50 years. In the six months to March 2013, revenues fell from £26.2m to £20.4m. The business swung into loss.

The interim dividend has been reduced from 1.9p a share to 1.5p a share. The total dividend is forecast to be unchanged at 4.5p a share even though it will not be covered by earnings.

Construction of the £15m Ellesmere Port site continues and Sinclair has taken an option over a further 12 acres. There are duplicated costs that are likely to last for a couple of years. Production of peat alternative SuperFyba has started on the site but there have been operational difficulties.

At 125p a share, down 5p, William Sinclair is valued at £21.3m. If Sinclair can achieve the 2013-14 earnings target then the shares are trading on 11 times prospective earnings.

There is no further news about the compensation payment levels for Bolton Fell. So far, £9m has been received.

b>Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFMay2013_44.pdf

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