Bottom Line: Aerospace flattered
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Your support makes all the difference.AT FIRST glance results published yesterday by Aerospace Engineering, the aircraft components and electronics outfit, suggest that the company is on its way back. Pre-tax profits came in at pounds 1.2m for the 12 months to 30 April compared with a loss of pounds 808,000 last time. Debt has come down from 79 per cent to 45 per cent of shareholders' funds and the company's share price has risen fivefold since last October.
Scratch beneath the surface, however, and the picture looks a little different. Profits from continuing businesses actually dropped as operating margins were sliced to 4.5 per cent from 8.1 per cent.
The results, meanwhile, benefited from unexpectedly high profits earned from a business that was sold during the period.
And the extent of the profit turnaround is flattered because a reported loss last year of pounds 230,000 was restated upwards to conform with the FRS3 accounting standard on exceptional items.
The final dividend is to be maintained at 0.5p, making a total of 0.75p. But that is down on the 1p paid last time and is still uncovered by earnings.
From now on Aerospace, having sold half its turnover to repair its balance sheet, will concentrate on making structural support frames for aircraft and electronic circuit boards.
If the company lives up to the expectations of its own stockbroker, Panmure Gordon, the shares - down 2p at 26p yesterday - are trading at 24 times prospective earnings. Any plausible recovery is surely in the price.
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