Manganese is faring well

The Investment Column
Click to follow
If you've ever stood in the rain trying to hail a black cab, you will be aware of what a good economic indicator London taxis can be. Manganese Bronze, which makes most of them, has ridden the cycle with mixed success and came a cropper in the early 1990s as a shortage of foreign tourists compounded an already difficult economic backdrop. Since then, the company has gone from strength to strength.

Full-year figures for the 12 months to July yesterday showed a 48 per cent profits advance to pounds 6.2m, well above consensus forecasts of about pounds 5.5m. Earnings per share of 26.8p were 34 per cent higher, stripping out one-offs, and the dividend for the year was a full 40 per cent better at 7p (5p).

Demand is high and orders are benefiting from the 1995 Disability Discrimination Act, which means that all taxis operating in London must be wheelchair accessible within the next three years. That boost is becoming evident in production figures that increased from 52 to 60 vehicles a week during the year and are now running at 68 a week.

The shares have had a remarkable run since bottoming out at the end of 1992 at 66p. Yesterday they jumped another 14p to 360.5p. With forecast profit growth of only 10 per cent, that is high enough.