Branching out benefits Vosper: The Investment Column
Wednesday 13 November 1996
Defence orders such as the Type 23 frigate deal on which Vosper lost out to GEC earlier this year, tend to follow a lumpy pattern which is hardly conducive to sensible planning.
Instead, the Southampton-based engineer has been developing other businesses in facilities management and training where it is benefiting from the trend towards contracting out.
These businesses account for a third of group sales and a quarter of profits with plans to boost the latter figure to 40 per cent.
So far these operations include Flagship, which handles the Royal Navy's training requirements and Vosper Mantech which runs engineering works for GCHQ. Vosper even runs Hampshire's careers service.
The fruits of the strategy were evident in yesterday's results for the six months to 30 September. Pre-tax profits were 11 per cent ahead to pounds 12.7m on sales slightly lower at pounds 107m.
Almost two-thirds of sales are to export markets with the Middle and Far East particularly strong. In the first half, it delivered minehunters to Saudi Arabia and fast-strike craft to Qatar.
It is this business that is the key. Vosper's order book currently stands at pounds 400m and the group is expected to report a steady increase in profits until 1998.
But it needs a new order soon to re-assure investors about prospects after that. Chief executive Martin Jay is confident that such an order can be secured in the next three to six months. Prospects are encouraging in the Middle and Far East, the company says.
And Vosper has tendered for the fleet maintenance contract at Portsmouth Docks in conjunction with GEC, a contract which would be worth hundreds of millions of pounds.
The business still has pounds 111m of cash, some of which will be used for acquisitions in electronic controls and marine products, though there are no imminent purchases.
The shares have been treading water recently though, as ever, they remain sensitive to new orders and volatility in export markets.
Assuming full-year profits of pounds 31m, the shares - up a penny yesterday at 836p - trade on an undemanding forward rating of 13. Worth holding.
- 1 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 2 Google April Fools': company unveils backwards search engine and huggable digital assistant
- 3 I might be an MP, but that doesn't stop me fighting sexism with my breasts
- 4 April Fools' Day 2015: The best hoax news stories from around the internet
- 5 Gamers confess the worst things they've done in The Sims
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
Katie Hopkins reported to the police for race hatred by Labour MP Simon Danczuk after tweet about Pakistani men
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...