The Investment Column: Siebe exudes confidence
Wednesday 03 December 1997
On yesterday's evidence, that progress should continue. While other engineering companies grapple with the strong pound and the economic upheaval in the Far East, Siebe could hardly have sounded more confident.
Sceptics had viewed the acquisition of troubled process engineer APV last May as a sign that Siebe was running out of steam. Not so. In just four months under Siebe's management, the unit's margins widened by two percentage points to 5.5 per cent. They should hit 10 per cent some time next year - well ahead of schedule.
What about the currency? True, translating overseas profits into sterling knocked a cool pounds 19m off Siebe's bottom line. But this is a one-off accounting effect. In fact, cheaper currencies have given some of Siebe's overseas operations a welcome competitive boost.
That's especially true of the Far Eastern markets, which account for 17 per cent of the company's sales. Siebe says it hasn't seen any demand weakness, and sees the shake-out as an opportunity to snap up selective acquisitions in the region.
With organic profits - excluding the effects of currencies and acquisitions - rising by over 20 per cent, the charge that Siebe needs deals to fuel growth also looks thin.
Indeed, the company has ruled out any large acquisitions for the time being, saying management has enough on its plate. With the full benefits from APV and an internal efficiency programme still to come, brokers have pencilled in full-year profits of around pounds 524m. That puts the shares, up 38p to 1163p, on a forward price/earnings ratio of 18. Given Siebe's record, not expensive.
- 1 Gwyneth Paltrow and Chris Martin file for divorce after 10 years of marriage
- 2 Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
- 3 Katie Hopkins and The Sun editor David Dinsmore reported to police for incitement to racial hatred following migrant boat column
- 4 Bookies now say Ed Miliband is more likely to be prime minister than David Cameron
- 5 Australian student Tommy Connolly, 23, adopts his pregnant, homeless 17-year-old cousin to give her a chance at 'a better life'
Gwyneth Paltrow and Chris Martin file for divorce after 10 years of marriage
Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
Katie Hopkins and The Sun editor David Dinsmore reported to police for incitement to racial hatred following migrant boat column
'Jihadi John': Isis executioner Mohammed Emwazi wanted to wage jihad in Somalia until his friends were betrayed and killed by al-Shabaab
Parma, Missouri: 80 per cent of town's police quit after first black mayor is elected
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
Katie Hopkins on LBC: Listen to caller taking The Sun columnist to task over migrant comments
iJobs Money & Business
£12000 - £15000 per annum: Recruitment Genius: An expanding Insurance Brokerag...
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...