Results are trickling in from companies listed on the FTSE 250 this morning, and several companies were affected by Brexit on the quarter. Two companies that released their earnings reports on Tuesday include:
1. Meggitt (LSE: MGGT)
Meggitt is an aerospace and defense engineering firm that suffered a 3% loss in early morning trading. The company’s loss lessened as the day continued, with the stock down 1.82% on the day in late-afternoon trading.
The stock slumped as the company noted a 60% drop in pre-tax profits.
The drop in profits are not as bad as they appear on paper. The company had a £50.8 million fall in valuation (non-cash) for its financial instruments. A post-referendum fall in the pound’s value also led to lower pre-tax profits.
Earnings per share rose to 15.4p, while pre-tax profits reached £152 million. The company’s dividend was increased to 4.8p per share, up 4%. Organic growth and acquisitions has helped the company’s order book rise by 18%, up to £911 million.
2. Elementis (LSE: ELM)
Elementis is suffering from lower sales, causing the company’s stock to fall 4% in morning trading. The dip in stock price came after the company announced that sales fell 7.3% on the quarter. Sales fell to $334 million in the first half of the year, with pre-tax profits falling to $44.7 million, down 31.5%.
The company’s 2.7 cent dividend remained unchanged.
Net cash on the company’s balance sheet is up to $37.5 million, up from $16.1 million during the same period last year. The increase allows the company to maintain a strong balance sheet despite slumping sales.
The company’s report did show that coating sales rose 11% in North America, personal care sales rose 7% and coating sales in China rose 6%. The stock is a reasonable buy, with a 4.7% dividend yield and forecasts of slow growth into 2017.
