The Investment Column: Boom in e-commerce makes for exciting prospects at FKI
Friday 19 November 1999
FKI is meeting the challenge well. Its engineering division unveiled strong export figures yesterday. That offset slow sales to oil-related markets, helping FKI post an underlying 7 per cent gain in pre-tax profits to pounds 78m. This should be sustained over the full year, Mr Beeston says.
Even so, on analysts' expectations of full-year profits of pounds 173m, or 22p earnings per share, the shares trade on a forward multiple of less than 10. That suggests an element of risk to FKI which is starting to look unfair.
FKI has come a long way since it started out as a maker of parking meters (the "k" in the name used to stand for Karparks). The hardware division, which makes castors and windows, contributes 40 per cent of operating profits. Its profits grew 8 per cent, reflecting the strength of the United States housing market.
While rising US rates are supposed to put growth in jeopardy here, FKI continues to gain market share at rivals' expense.
FKI, meanwhile, has high hopes for its logistics arm as e-commerce grows, having gathered its logistics businesses under the imaginative banner of Logistex.
The argument goes that Amazon.com and its peers will need nifty sorting systems in their bulging warehouses and Logistex will do the job. Logistex already has eToy.com on its books and had annual pro forma sales of pounds 225m.
But there's plenty of excitement near term. Orders for power generators are running at record levels, backed by the strong US power generation market. The handling business should strengthen following the recent surge in the oil price. Given FKI's healthy cash generation, the shares, up 9.5p at 177.5p yesterday, are too cheap. Buy.
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 PornHub turns masturbation into energy in bid to save the planet
- 5 Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
PornHub turns masturbation into energy in bid to save the planet
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...