Alumasc Group (LON:ALU) (ALU, 120.5p, £43.54m), the premium building and engineering products company, is currently trading in line with expectations for the year ending June 2011. Revenues are up 10% against the previous year. Trading in the Building Products division has remained flat against the previous year, but up against the previous quarters. Demand for the Alumasc Precision division has grown, driven by significant new project wins to supply components for a complex transmission system to Caterpillar. An increase in working capital to reflect higher revenues has increased net debt to £10.9m. Group borrowings remain comfortably within committed financing facilities of £20m. The order book is encouraging, up 20% against the previous year, at in excess of £40m. The group are comfortable with current market expectations of PBT of £5.5m, EPS of 11.9p and DPS of 10p. The stock is fairly priced on 10x 2011 earnings. However the yield of 8.3% is the key attraction. This is a yield play. We repeat our BUY recommendation.
Expansys Plc (LON:XPS) (XPS, 5.75p, £66.48m) has partnered with Parrot to retail the A.R.Drone Quadricopter toy “around the world in the UK, USA, France, Germany and Hong Kong, among other territories”. This is a must have toy for Apple converts, though it is extremely expensive against less functional radio control toys. However the boost (of course a one year wonder) will have to be substantial. Xpansys sits on current forecasts of £6m PBT with 0.5p EPS – putting the group on a prospective PER of 11.5x, at best a HOLD given the premium rating to the retail sector.
I-Design Group Plc (LON:IDG) (IDG, 19.0p, £2.68m) has secured a new multi-year contract with YourCash Limited, Europe's largest independent provider of ATM solutions. The contract will cover implementation of atmAd on c.500 ‘free to use machine’ of which 300 will be in the UK with the remainder in Netherlands. There is scope for i-design to secure YourCash’s entire ATM portfolio which consists of c.6000 ATMs in the UK with an additional c.600 in the Netherlands. I-design has also secured the exclusive rights to run third party advertising on these ATMs and following the roll-out of atmAd, will benefit from ongoing revenues generated by third party advertising…
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