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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