T
he share price of Molins (LSE: MLIN) — a company that supplies machinery and support services to fast-moving consumer goods sectors, including tobacco and food — is currently down close to 12%, following publication of results for the first half of 2014.
Sales slumped 16%, down to £40m, with underlying pre-tax profit taking a 60% nosedive to £0.6m. On a statutory basis there was a pre-tax loss of £0.1m.
The company says that its first-half performance was broadly in line with management expectations, but that adverse market conditions in the Middle East and eastern Europe had a negative impact on its Tobacco Machinery division, owing to order deferrals.
However, Molins says that there was “good progress” in its Scientific Services and Packaging Machinery divisions, where sales in local currencies were up 4% and 9% respectively on the prior period.
Underlying earnings per share (EPS) were down almost 68%, to 2.1p, with a basic loss per share of 0.9p. However, the company has recommended maintaining its interim dividend at 2.5p per share.
Commenting on the results, CEO Dick Hunter said:
“As in previous years, the Group’s full year trading performance will be significantly weighted towards the second half. The Board is mindful of the strength of sterling and current market conditions for the Tobacco Machinery division. The prospects for the Scientific Services and Packaging Machinery divisions continue to be encouraging. We continue to pursue our growth initiatives in all divisions.“
At just over 140p, Molins’ share price is now down 27% on the year-to-date, compared with a fall of 8.5% by the AIM All-Share (Molins was admitted to the AIM in June of this year). But over the past five years, Molin’s share price has risen 99%, versus gains of 31% by the AIM All-Share and 44% by the FTSE All-Share.
