Investment Column: Ultraframe thrives in the conservatory

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The Independent Online
PUTTING roofs on conservatories hardly sounds like the way to make a fortune. But it's precisely the business behind Ultraframe, one of the market's favourite stocks of the moment. Since the company joined the market last October its share price has more than doubled as Ultraframe showed that bringing conservatories to Middle England can be a lucrative trade.

Ultraframe's secret is its innovative design of roofs, which allows conservatories to be built faster and cheaper than before. This brainwave has given the firm a third of the British conservatory market. The design is protected by a series of patents, which are constantly updated and improved.

As yesterday's half-year results show, business is booming. Turnover was up by a fifth to pounds 26m while protect profits, helped by a relatively stable cost base, jumped 86 per cent to pounds 6.9m.

How long can the boom last? True, the figures did receive a one-off boost from the mild winter, which allowed building work to carry on for longer than usual. But there is still mileage in helping Mrs Smith keep up with the Joneses by building a conservatory.

What's more, there are plenty of opportunities which Ultraframe has not yet begun to exploit. It is looking to build up exports to continental Europe and the US. There are also deals to be done with pub and restaurant chains, expanding their space by constructing conservatories, or building them as standard on new homes.

This all adds up to a rosy outlook for Ultraframe. But this doesn't necessarily mean the shares are worth buying. Williams de Broe, the stockbroker, predicts full-year profits of pounds 18m, putting the shares, up 5.5p to 360.5p yesterday, on an ambitious forward p/e ratio of 27. For now, that's high enough.

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