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November 23, 2012 10:27 pm
Investors in Stadium Group, the Aim-listed electronic technologies business, have had their nerves tested by choppy trading of the shares in the past 10 days.
The key question for Stadium remains: how quickly can it reduce its exposure to the vagaries of low-margin business in electronic manufacturing services (EMS) by growing its higher margin power and display divisions through acquisitions with embedded intellectual property?
Following a profits warning which slashed the share price by 25 per cent in a day, from 51.5p to 39p, Stadium this week recovered some lost ground, closing yesterday at 46p.
Stadium moved into the high-margin intelligent displays market through its recent £4.2m acquisition of IGT Technologies and has the finance to continue its strategic shift.
While warning that the depressed EMS market looks challenging into 2013, it insists EMS orders have been deferred, not cancelled, and that customers are being won, not lost.
Stadium is a kind of mini-bellwether for global economic patterns. This week, Stephen Phipson, chief executive, and Nick Brayshaw, chairman, bought shares, illustrating that they remain among the optimists.
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