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Ibstock plc IBST updates that demand in the UK brick markets is robust and factories have been producing at, or close to, full capacity for an extended period. Adjusted EBITDA for the six months to the 30th June is expected to be about £58m which reflects the impact of bad weather at the start of the year and higher energy costs.But whilst demand from the new housing sector has been strong and market fundamentals are favourable, there are clouds on the horizon and it looks as if the tide may be turning to reflect the realities of life among the house builders. In recent months and particularly in July, production has been lower than expected and it is now anticipated that output for the second half of the year, will be below expectations.
Keller Group KLR is increasing its interim dividend by 24% for the half year to the 30th June, after rises in statutory pofit before tax and earnings per share of 31% and 37% respectively. First half revenue was a record at £1,075m with constant currency growth of 15%. The strong financial performance was achieved despite a harsh winter in the northern hemisphere and markets have remained broadly healthy.
Cranswick CWK revenue in the first quarter to the 30th June was 3.2% ahead of the same period last year and export revenues were modestly ahead. The Group is in a robust financial position with net debt of 18m. a year ago having been turned into net cash of 8m. at the quarter end despite substantial ongoing capital investment.
Senior plc SNR Trading in the six months to the 30th June has been slightly ahead of expectations with profit before tax for the half year riing by 36% and basic earnings per share by 25%. The interim dividend is to be increased by 6.8% and he order book remains strong across most of the businesses.
Dialight plc DIA claims to have taken targeted actions to improve its operational performance during the six months to the 30th June. Despite that, statutory profit before tax fell from 4.0m. to 2.8m. and earnings per share from 8p to 6.4p. Late orders have been significantly reduced since the start of the year and on-time delivery and cost performance are now both excellent, it says. The move from recovery to growth leaves the Group excited by its future prospects.
There is a mystery about the 2015 results for Dialight (DIA) in that revenue rose slightly from £159.8m to £161.4m whilst everything else nosedived and no real explanation is being given for a disaster which affects both shareholders and employees.
The best that the company can, or will say, is that the year to 31st December was a difficult one because of operating challenges which it does not bother to specify but which it claims were exacerbated by downturns across a number of its markets.
The result is devastating for shareholders and employees. No final dividend is being paid. Even worse the company is closing its UK manufacturing plant after 40 years, with all UK staff at risk of redundancy, except of course for the directors who are allowing themselves to continue to preside over the fiasco, save for two board members whose heads are to roll. Manufacturing will be transferred to a global manufacturing partner whose location and identity the board thinks should be kept a closely guarded secret.
Now for the statistics. Underlying operating profit plunged by 66% and a strategic review imposed additional costs of £9m. Statutory earnings per share were transformed from 29.4p to a loss of 6.4p. whilst another major transformation saw statutory profit fall from £15.5m to a loss of £3.9m and net cash of £0.6m., become debt of £3.8m. Underlying operating margins declined from 11% to 4%
At least the board tried a new strategy during the year with a new 3 year plan but remains silent on whether that was alleviated the problems or added to them. What the board does say is that it only has confidence in the medium to long term outlook which indicates that the short term outlook could be fairly grim.
Another mystery is the company’s October trading update which made it fairly clear that the third quarter had not been good but gave no cause for concern about quarter 4 which by then had of course, already started. In fact the shares which had halved to 400p in the year to February 2016, had since rallied strongly to 516p at yesterdays close. This morning they have, so far, shed over 5% to 488p.
They had peaked in September 2013 at 1402p, before starting their long decline which now seems likely to continue further.
One can only wonder who, if anyone, will shed light on, or even accept a modicum of responsibility for what is a very sad and disturbing story.
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