The Investment Column: Pressac catches telecoms fever
Thursday 04 November 1999
Pressac specialises in high-volume manufacturing, and the growth in mobile- phone production means its skills fit the industry perfectly. Yesterday's full-year results show the success of Pressac's shift of emphasis.
Organic growth in telecoms and industrial sales was 36 per cent, compared with 8 per cent in Pressac's automotive division. Margins in the telecoms business climbed from 15 to 17 per cent, as automotive margins slid to 12 per cent.
The division's sales totalled just pounds 6.6m, but the orderbook, says Roger Boissier, the chairman, stands at pounds 30m. To handle demand, the group is looking to build a pounds 5m factory in Scotland.
The rest of Pressac is less exciting. Stripping out the acquisition of Cartier, which contributed from day one of the year, sales were up just pounds 1.4m. The sluggish automotive business represents 76 per cent of sales. While the electronic component of cars is growing at 8 per cent annually, Pressac is not the only player in the market.
The question is whether Pressac's success in the mobile industry is sustainable. The technology, which prints text on the underside of keypads so it doesn't wear off, is not exclusive.
Pressac admits it is a late entrant to the mobile components market. However, it claims the combination of a broad component offering and expertise in high-volume manufacturing give it competitive advantage. Pressac - like every other manufacturer - wants to offer a one-stop shop. It expects mobile components to account for around half of sales within four years.
The group has completed a small restructuring and disposal programme, which will see a pounds 4.6m exceptional goodwill write-off in the current year.
Analysts expect pre-tax profits of pounds 26m and earnings of 18.7p per share this year, rising to pounds 30m and 21.6p in 2001.
The expectation of higher mobile components margins and volumes has seen the shares recover from 172.5p in June after downgrades.
At 228.5p, the shares trade on a forward price/earnings ratio of 12. Given Pressac's fast-growing order book in the cellphone market, the shares are good value.
- 1 Cyclist in Russia narrowly misses being hit by car and lorry
- 2 Y-40 Deep Joy: The world's deepest swimming pool
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 Syria air strikes: President Obama undergoes Damascene conversion as Isis forces America to change tack
- 5 Pink Floyd new album: Band unveil cover art for first record in 20 years
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
Deepika Padukone branded a 'hypocrite' by The Times Of India following anger over 'cleavage show' tweet
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Syria air strikes: President Obama undergoes Damascene conversion as Isis forces America to change tack
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
Labour Party conference: Ed Balls to set out plan to freeze child benefit to balance books
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...