Bottom line: Good-value Glynwed

THE building products group Glynwed was in upbeat but cautious mood yesterday.

Overall operating margins grew from 5 per cent to 6.7 per cent. Glynwed has some way to go before it achieves the 10.5 per cent return of 1988 but the improvement from the 1991 low point of 3 per cent is none the less impressive.

The bulk of the company's revival to date has come from driving costs down and rejigging its product range to squeeze through price increases.

From here on Glynwed needs volume gains to drive profits growth. With 70 per cent of its sales in the UK, its fate is tied to domestic economic fortunes.

While Glynwed is optimistic, it is not optimistic enough to increase the dividend, although a final increase is likely.

Shares added 5p to close at 390p. Assuming the final dividend is raised, the prospective yield is in line with the market at 3.8 per cent. The shares, on a forward p/e of 18.5, trade at a 20 per cent premium. The good news is in the price.