Interactive Investor

Apple iPhone 6 is boon for Laird

22nd October 2014 13:46

Lee Wild from interactive investor

Laird kept up its impressive growth rate during the third quarter as electronics giants snapped up the company's electromagnetic interference shielding materials. US dollar revenue jumped by 15% and by 11% on an organic basis, driven by demand for the Apple iPhone 6 and extra business with Samsung. A share re-rating, already underway, looks to have further to run.

Sales of $251 million (£135.8 milllion) for the three months ended 30 September was up on last year's $218 million, although the strong pound capped quarterly growth in sterling terms at 6%, and at 5% for the last nine months at £402 million.

Management said "customer new product launches, strength in smart phones sales and the continued investment in 4G/LTE infrastructure," were behind double-digit growth at the performance materials division. There was rapid growth at the smaller wireless systems operation, too, where car manufacturers, especially in the US, like its antenna technology for satellite radio, GPS and mobile phone reception.

“Our expectations for the full year remain unchanged," says chief executive David Lockwood. Numis Securities currently expects adjusted earnings per share (EPS) of 19.3p before soaring by 20% in 2015 and 16% the year after. "We believe there is potential for material value creation as earnings grow and the stock re-rates," the broker says.

Up 5% at 309p, Laird shares trade on a forward price/earnings (P/E) ratio of 13.4 for 2015 and offer a dividend yield of over 4%. That's a discount to peers and reasonable value.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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