Final 2010 results revealed a stronger than expected rebound in trading in H2 with full-year margins at record levels. The strategy is robust, but the current signals are cautious. The focus is now on investment in new product, on rising costs (which will cut margins by about 200bps in 2011), on the outlook for the top line (good for Q111, but uncertain thereafter), and on the price paid for acquisitions (more likely as debt falls). The shares are on an undemanding rating but, given recent price rises, may tread water in spite of powerful fundamentals.

Unlock the rest of this Article in 15 seconds

or Unlock with your email

Already have an account?
Login here