Aircraft order backlogs benefit Umeco
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Umeco, the aircraft parts supplier and materials group, defied the slowdown in the civil aerospace industry to report a 61 per cent rise in first-half adjusted profit.
Clive Snowdon, chief executive, said the group was experiencing strong demand from its aerospace customers, citing high order backlogs at Airbus and Boeing.
“They have a backlog of about 7,500 aircraft, and have made 940 this year. That is eight years’ work in the backlog,” he said.
The company, which also makes composite materials for Formula One racing cars, announced it had won a five-year parts supply contract from Aliant Techsystems.
Umeco revealed the contract win alongside results for the six months to September 30. It said revenue increased 32 per cent to £197.2m. Adjusted profit rose to £13m, while the pre-tax line was up from £7.2m to £11.6m. Earnings per share were 16.2p, compared with 11.6p last time.
The adverse impact on first-half revenue of the recent strike by machinists at Boeing had been less than $1m (£625,000), Mr Snowdon said.
The company is increasing its interim dividend by 8.3 per cent to 6.5p. The shares closed up 17¾p at 317¾p.
● FT Comment
Shares in Umeco have lost nearly half of their value since the start of the year as investors fret about the impact of the downturn in the global aerospace industry on the company. Tuesday’s upbeat interim statement provided some comfort. Umeco said it bases its confidence on the high order backlog at Airbus and Boeing, but admitted there were concerns over the availability of funds for aircraft financing. Trading could also become more difficult in the coming months but Umeco looks well-placed. It is also starting to benefit from new markets; its wind turbine blades division saw a 68 per cent jump in sales thanks to continuing demand for green energy. Trading at 6.8 times 2009 earnings, the shares are priced below the sector average.
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