The Investment Column: Cammell on acquisition alert
Friday 09 July 1999
Last year the group enjoyed spectacular growth in sales, which more than trebled. That followed the acquisition of facilities in the North-east and a full year's contribution from a shipyard leased from the government of Gibraltar.
The renovation of dry docks in Birkenhead added to the momentum. But Laird is stuck when it comes to delivering organic growth.
The success of the acquisitions indicates Laird's skill in identifying cheap assets to which it can apply its expertise. It does not build ships, but is able to snap up redundant ship yards which provide facilities for repair and refurbishment. Both activities are growing markets, and Laird aims to command competitive advantage in both by offering customers complete solutions. It already has the advantage that, by virtue of its UK location, it has inherited low-cost skilled labour and assets.
In repair, Laird's Gibraltar operations benefit from the deep-water oil exploration taking place off the West coast of Africa. In refurbishment, the group expects to receive further orders following the satisfaction of Airtours with a recent cruise ship re-fit. Meanwhile, as the British population ages, the cruise holiday business is expected to grow.
Marine services are a highly fragmented market, and in each of its markets, from defence to cruise ships, Laird faces competition. But it is unique in the range of markets it is exposed too. That insulates it from downturns in any one. This year's record was achieved against a background of crisis in the oil industry.
Laird is now on the lookout for acquisitions to enable it to meet its customers' needs with greater flexibility.
It aims to be able to either supply, source, design or re-fit ships as required. Given its track record in turning around moribund assets, shareholders can be confident that Laird will not be reckless.
Analysts expect pre-tax profits of pounds 15.3m this year and earnings of 40.7p per share, rising to pounds 18.2m and 47.8p. The shares, which closed up 12.5p at 855p, are near their recent all-time high of 860p. On a forward p/e of 21. That's still a discount to the market and given the transparency of Laird's forthcoming earnings growth, unjustified. Laird will lead consolidation in its industry and the shares are undervalued
- 2 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 3 Professional big game hunter Ian Gibson crushed to death by elephant during hunt
- 4 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
Yemen crisis: Meet the child soldiers who have forsaken books for Kalashnikovs
Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
Rarest Beanie Baby of them all could be sold for £62,500 on eBay
Professional big game hunter Ian Gibson crushed to death by elephant during hunt
Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...