CPS delivers profits but considers options

PNEUMATIC conveying and air filtration systems provider Clyde Process Solutions has posted an “exceptionally strong” set of annual results, including record profits.

The Doncaster-based group saw pre-tax profits for the year ended February 28 rise from £2.6m to £3.1m.

Operating profit before exceptionals hit a record high of £6.7m, up from £6.3m,  while earnings before interest, tax, depreciation and amortisation also hit a record level of £7.8m, up 10% on 2009.
 
Revenues at the AIM-listed group dipped from £82m to £72.5m.

Chairman Jim McColl said he was happy with CPS’s results but continued to be concerned at the low share price of the group and said the company was exploring “organic and acquisition-assisted initiatives”.

Mr McColl said: “We have delivered an exceptionally strong set of results in what has been a challenging economic environment for many businesses.

“Our strategy of creating a well-diversified business across a wide range of customer markets, technologies and geographical territories has enabled us to generate outstanding operating profit growth and a set of results that are ahead of market expectations.
 
“Strong fiscal management, supported by an enhanced strategy of broadening our market penetration, developing patentable technologies, and expanding geographical coverage will enable the group to build on these results and deliver long-term growth for our shareholders.
 
“I am disappointed at the continuing low value placed on our group despite the continuing strong performance of our business.

We are reviewing ways to maximise value for our shareholders as a priority.

“The resumption of the dividend reflects the Board’s confidence in its future and reflects the continuing growth in profits and cashflow despite unsettled market conditions.”

CPS saw net debt reduced to £16.3m and has proposed a final dividend of 0.8p per share.

The group had a forward order book of £20.5m at the year end, which had risen to £21.8m at the end of April.
 
In a joint statement, Mr McColl and chief executive Alex Stewart said the results had been achieved through focusing on four areas: increasing customer contact, monitoring credit control procedures, controlling costs, and managing cash.
 
Added to this has been focus on diversification across customer markets, technologies and geographical territories.

CPS has also broadened into areas including sugar and petrochemicals and developed patentable technologies within air filtration and pneumatic conveying.

Mr McColl and Mr Stewart said CPS aimed to expand its presence in India, where the firm is in advanced negotiations with a partner to form a joint venture in this territory, and has grown its sales in China.

The statement added: “We also aim to drive forward our presence in high growth geographies such as China, India, Australasia and South America and are exploring a range of options which include both organic and acquisition-assisted initiatives.”