Laird a-leaping after 'encouraging' first half improvement

Electronic component maker Laird reported a much improved performance in the first six months of the year, with underlying profit before tax improving 47% to £24.1m.

Revenue at the full listed company, which specialises in components that protect electronics from electromagnetic interference and heat, has grown 25% to £441m in the half-year to 30 June, up 10% on an organic constant currency basis and with a 15% currency tailwind.

Gross margin was down to 33.0% from 35.6% in the prior period, but lower operating expenditure as a percentage of revenue resulted in operating margin expanding to 6.7% from 6.0%.

Investments to drive long term growth in the Connected Vehicle Solutions business saw operating margin was hit there but in Performance Materials operating margins were lifted 40 basis points, with "strong operational controls" put in place ready for the smartphone cycle in second half of 2017.

Earnings per share expanded 17% after adjusting for the rights issue to 4.1p, with free cash flow of £7m before exceptionals of £17m.

Net debt was slashed to £175m from £345m thanks to April's £176m rights issue.

An interim dividend of 1.13p was declared, down from 4.53p, but in-line with the target of a 33% payout ratio.

Chief executive Tony Quinlan said it was a "much improved" performance and he was "encouraged by the progress in all three divisions, which reinforces our expectations for the full year, which remain unchanged".

"The recovery has been underpinned by our relentless focus on driving operational improvements and this remains an ongoing priority for Laird.

"We are establishing stronger foundations which will leave us better placed to take advantage of the significant future growth opportunities that exist in our end markets."

For the full year, house broker Numis forecasts revenue of £905.1m, PBT of £60m and EPS of 9.0p