• Mark Watson-Mitchell

Alumasc Group - my 'star value pick' for the next year

Yesterday’s AGM Statement from this premium building products supplier was very bullish.


Chairman John McCall commented that Alumasc has begun the new financial year to 30 June 2021, with record profits in the first quarter benefitting from strong performances in the group’s three main divisions – building envelope, water management and housebuilding products.


That combines with equally strong cash generation, with net bank borrowings falling to less than £1m currently, against total facilities of £24m.


CEO Paul Hooper stated that the increased trading momentum had continued into Q1 of the new financial year, together with a strong order intake.


Analysts are looking for a £10m increase in current year sales to end June 2021 to £86m, upon which adjusted pre-tax profits could almost double from £3.7m to £6.4m, with earnings leaping from 8.2p to 14.3p per share and handsomely covering a 5p estimated dividend.


At the current 92.5p that would put the shares out on an extremely low rating of just 6.5 times earnings and offering an excellent 5.4% yield.


On the back of this Trading Update Alumasc Group now would be my ‘star value pick for the next year’, with both of my Target Prices as attainable goals.


It is now very obvious why so many of the directors were buying more shares just a few months ago.


(Profile 13.02.20 @ 116p set a Target Price of 145p)

(Profile 08.06.20 @ 80p set a Target Price of 105p)