Dewhurst's profits flat as currency movement stifles growth

Dewhurst reported on Thursday that its profits remained largely flat after gains from new acquisitions were offset by adverse currency movements.

For the year ended 30 September, the company, which makes components for the keypad, lift and rail industries, achieved unchanged profit before tax of £5.9m on the back of a 3% increase in revenue to £54.5m.

Newly acquired A&A Electrical Distributors contributed £3.9m to sales since it joined Dewhurst in June, but total sales were damaged by the fact that two thirds of sales are held in foreign currencies before being retranslated for group reporting.

The AIM traded company said that this resulted in a decrease in like-for-like sales of £1.5m, or a 3% reduction in profit before tax.

Dewhurst had cash and cash equivalents of £9.4m at 30 September, down from £18.1m at the same point last year, and proposed a final dividend of 9.0p per share, raising the total dividend from 12.0p per share last year to 12.5p per share.

Group managing director George Dewhurst said: “In general our overseas companies performed well. Inevitably there was the odd exception, notably Dewhurst Hungary, who had a particularly difficult year. In the UK there was no obvious pattern: some parts of the lift market were reasonably strong, others were weaker. Meanwhile the transport market was essentially stagnant.”

The Hungarian business struggled due to weaker demand for its keyboard division, while the disposal of ERM Winter & Bain, which had contributed £1.8m the previous year, also affected results.

Chairman Richard Dewhurst said: “Although future demand in the UK is uncertain, we will have a full year's contribution from A&A next year. Elsewhere lift product demand continues to be strong in North America and much of Australia, which is encouraging as these are key markets for us. On keypads, demand has bounced back from the low points of last year and trading currently seems a little steadier.”

Dewhurst’s shares were down 0.53% at 945.00p at 1619 GMT.