Aerospace and precision engineering company Hampson Industries Plc (HAMP.L) Thursday reported a marginal increase in its pre-tax profit for the first half of fiscal 2010, reflecting lower financing costs, despite a decline in revenues. However, on an adjuted basis, pre-tax profit decreased for the period. Hampson shares are currently trading down nearly 10% on the LSE.
For the first half period, the UK-based company's profit before taxation was GBP 13.49 million compared with GBP 12.51 million in the prior-year period. On an adjusted basis, pre-tax profit slumped to GBP 10.95 million from GBP 16.06 million a year earlier.
Profit attributable to shareholders increased to GBP 9.43 million from GBP 8.73 million in the 2009-year period. On a per share basis, profit per 25 pence ordinary shares was 5.83 pence versus 6.42 pence in the previous year. Adjusted attributable profit dipped to GBP 7.62 million or 4.71 pence per share from GBP 11.24 million or 8.27 pence per share in the same period last year.
Profit for the period from continuing operations rose to GBP 9.45 million from GBP 8.76 million last year. Earnings per 25 pence shares from continuing operations was 5.84 pence compared to 6.44 pence in the comparable period prior year.
Loss for the period from discontinued operations narrowed to GBP 18 million or 0.01 pence per share from GBP 30 thousand or 0.02 pence per share in the previous year. In August 2009, the company disposed of its entire 100% shareholding in Hampson Aerospace Machining Limited to Darwin Private Equity LLP.
Hampson's revenues from continuing operations declined to GBP 97.00 million from GBP 110.51 million in the first half of fiscal 2009.
On a segmental basis, revenues from aerospace components and structures were GBP 27.94 million versus GBP 46.35 million in the previous year, and automotive turbocharger revenues plunged to GBP 4.19 million from GBP 11.02 million in the year-ago period. However, revenues from aerospace composites and transparencies rose to GBP 64.87 million from GBP 53.14 million last year.
During the six-month period, net financing costs were GBP 3.48 million versus GBP 4.85 million in the previous year. Financial expenses for the period fell to GBP 3.80 million from GBP 4.62 million a year ago.
In the first-half period, the company had a one-time gain of GBP 585 thousand on disposal of Hampson Aerospace Machining business. Changes in net fair value of non interest instruments totaled GBP 4.45 million as compared with GBP 1 thousand, and amortisation of intangible assets on acquisition was GBP 2.61 million versus GBP 2.10 million in the comparable period prior year.
Looking ahead, Hampson stated that outturn for the current year will be determined by timing of conversion of pipeline demand for high value tools required by larger aerospace programs into firm orders. Even though timing of order placement continues to be uncertain, the company sees a gradual increase in release of new orders over the next twelve months.
Hampson said long term outlook remains one of significant growth potential, with the market for aerospace tooling expected to grow from its current anticipated size of about US$1.5 billion, to in excess of US$2.0 billion by 2012.
The board maintained an interim dividend of 0.80 pence per share, payable on or around February 12, 2010 to shareholders on the register on January 22, 2010.
HAMP is currently trading on the London Stock Exchange at 70.40 pence per share down 7.60 pence or 9.74% on a volume of 243,918 shares. In the past 52-week period, the shares have been trading in a range of 62.25 pence to 128.00 pence.
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