Wednesday, September 15, 2004
More profits for Mayborn, no more for me
Mayborn Group, my fourth largest holding this morning announced a profit of £4.1m for the first six months of the year, a 42% increase. Recent share buybacks and other factors resulted in a 53% increase in earning's per share to 13.6p. The dividend was hiked in line with the earnings to 2.6p.
Comment included:
The results for the half year benefited from exchange rate factors. Compared to the same period of the previous year, the overall exchange gain was £0.7m. This gain was largely offset by increases in freight rates, import duty and plastic prices.
the weak dollar has embellished these results while the high crude oil price has added a comparable tarnish. I'm left wondering what the effect on Mayborn's business would be if oil prices and dollar exchange rates strengthened in tandem.
Encouragingly, current trading is reported as
strong in the second half to date. Turnover for the Babycare Products Division and Impex have continued to grow and Dylon is also showing a good increase.
I was relieved and encouraged by these results. The dividend and earnings increases were widely anticipated however and trading at 268p to sell in the morning, shares dipped, closing at 262p.
With 13.6p earnings in the first half Mayborn is cheap but not excruciatingly under-rated. I don't expect a swift run up to fair value (which is probably around 325p) but the next fortnight will see professional analysts examining this announcement and issuing recommendations to clients. This and any sentiment or suggestion in the financial media might just present me with an opportunity to sell.
The investment case for Mayborn remains. I await the dividend and will watch for any price volatility to capitalise upon.
The Artful Dodger
Comment included:
The results for the half year benefited from exchange rate factors. Compared to the same period of the previous year, the overall exchange gain was £0.7m. This gain was largely offset by increases in freight rates, import duty and plastic prices.
the weak dollar has embellished these results while the high crude oil price has added a comparable tarnish. I'm left wondering what the effect on Mayborn's business would be if oil prices and dollar exchange rates strengthened in tandem.
Encouragingly, current trading is reported as
strong in the second half to date. Turnover for the Babycare Products Division and Impex have continued to grow and Dylon is also showing a good increase.
I was relieved and encouraged by these results. The dividend and earnings increases were widely anticipated however and trading at 268p to sell in the morning, shares dipped, closing at 262p.
With 13.6p earnings in the first half Mayborn is cheap but not excruciatingly under-rated. I don't expect a swift run up to fair value (which is probably around 325p) but the next fortnight will see professional analysts examining this announcement and issuing recommendations to clients. This and any sentiment or suggestion in the financial media might just present me with an opportunity to sell.
The investment case for Mayborn remains. I await the dividend and will watch for any price volatility to capitalise upon.
The Artful Dodger
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