More on FKI
FKI: 2005/6 results
Cyclical recovery at FKI strengthened further in the second half and full year turnover growth reached 13.8%.
Margins were little changed as the benefits of operational gearing and cost reductions were offset by rising commodity and energy prices.
Most of the profit growth came from lifting equipment. This was already the largest business (it now generates 41% of operating profit) and its 24% sales growth was the highest in the group. Despite slightly lower operating margin it added £7.6m to operating profit growth.
FKI Logistex, the luggage and goods handling equipment manufacturer also performed fairly well with sales up 16% and stronger operating margin. I added £3m to operating profit growth.
The hardware business was little changed. The serious under-performer was the energy division (manufacturer of generators, electric motors and related products such as locomotives). Although sales grew 8% this business was hard hit by commodity price increases and margins shrank, and its operating profit fell by £1.5m.
With Logistex and Lifting Equipment (54% of operating profit between them) both producing good growth the short term outlook is good. Although currencies (the US dollar in particular) are not as favourable as they have been over the last year, the worst of the rises in commodity and energy prices are also probably behind FKI as well.
At 104p FKI is trading on a prospective PE of 9.7× with a 4.3% yield. This is good value for the level of growth it is producing - 9% EPS growth this year, and likely to be at similar levels for another year or two.
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