No surprise in those circumstances that the latest deal - the pounds 15.25m acquisition of industrial fastener maker Dzus - is to be funded with new shares, or that the company should take the opportunity to raise another pounds 23.5m for the next purchase, which apparently won't be long in coming.
Dzus (pronounced Zeus) looks a good buy. Earnings-enhancing from day one, it occupies a nice little niche in the sort of heavy-duty clips that give quick and easy access in a whole range of applications - aircraft engines, the bit of carpet covering the tyre in your car boot, big computer installations. There is a good geographical spread to the business and a useful diversity of market sectors.
Investors seemed pretty relaxed about the deal and placing, adding 2p to the share price, which closed at 500p, 20p higher than the level at which the share issues are being pitched.
The fact that profits for the year to July just finished were confirmed at around market expectations of pounds 49.5m helped.
McKechnie had a remarkably steady run over the past five years, growing earnings from 17p in 1991 to an estimated 37.5p for the year just ended. That is an attractive compound growth rate of over 15 per cent.
Compared with that rate of improvement, with more of the same to come according to forecasts, the shares trade on a relatively undemanding price/earnings ratio of 11. Don't expect any fireworks but this is a good share to tuck away.Reuse content