We have had final results for Matchtec (MTEC) , Matchtech (LON:MTEC) which I flagged up the other day and wrote up earlier in the year. At first glance they seemed
up to or slightly ahead of expectations. Group turnover came in slightly
ahead of £499.3m forecast at £503m while their adjusted diluted
earnings came in at 43.3p v 42p forecast for a modest 3% beat, although I
note that the consensus had come down from 42.65p in August after their
year end trading update. So it seems that they are not only cautious in
their commentary but also manage expectations quite well. On the
dividend they also beat expectations by delivering a 12% increase in the
final to 16.32p (3.23% yield on that alone and a 10% increase for the
full year to 22p versus the 21.4p that was forecast. This was 2.1x
covered by earnings and seems to back up their bullish outlook
statement with hard cash.
Talking of which, the balance sheet saw
debt come in at £33.6m despite the cash portion of the consideration
for Networkers of £29.2m and the £8.4m of debt which came with it. This
was helped by the strong cash generation of £20.8m on the back of an
operating cash conversion rate of 124% up from 115% in the previous
year. This debt seems manageable, given the cash generative nature of
the business and in the context of the £150m market cap. It also
represents 1.9x this years EBITDA which is also within normal ranges
that bank covenants look at & I note that they have a £95m facility
available in any event suggesting plenty of headroom.
In the
statement they suggest that engineering markets remain buoyant and they
backed this up by reporting 24% growth in that sector. Meanwhile they
say the transformational acquisition of Networkers International, which
boosted these figures, is on course to deliver the expected synergies by
2017 as the integration there remains on track. On this they say the
Group is realising cost synergies from the combination which they
quantify at £1.3m in 2016, although they do say they are reinvesting
some of these savings into sales and marketing, regional management and
connectivity for some international offices to
improve the business,
so not all the savings will drop though to the bottom line. I see that
a…
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