Linx fans await 14 per cent profits rise
Article Date: Aug 31 2001A parade of institutions hope that ink jet and laser printer maker Linx Printing Technologies will show its defensive qualities with full year profits of around £5.2 million next Tuesday, writes Ben Cobley.
TechMARK-quoted Linx (LPT), whose printers print variable information such as sell-by dates, serial numbers, and other codes onto products and packaging, has increased profits in each of the past five years. During the current year's first half to December, pre-tax profits leapt from £1.96 million to £2.67 million and earnings boomed from 8.8p to 11.9p a share, on sales up from £15.4 million to £24 million.
At the interim stage, the company said it had been affected by the slowdown in the US, where sales fell 8 per cent. But it reported strength in other parts of the world, especially in Asia.
Tuesday's full year figures should show how Linx has been holding up as the economic slowdown has widened and deepened worldwide. The outlook part of the statement will also make particularly interesting reading.
Bulls point to the lack of a profits warning during the second half, which might suggest that the diversified markets in which Linx operates are holding up pretty well. If so, pre-tax profits could come in at between £5 million and £5.3 million, against £4.4 million last time.
House broker and investor Deutsche Bank expects £5.2 million pre-tax, with 23.9p of earnings. This puts the shares on a prospective p/e of 11.4 at a price of 273p, close to a 52 week low.
Among investors looking closely at the figures will be Eaglet, Herald, Perpetual, Mercury, and Singer & Friedlander. Between them, these and other institutions own about 80 per cent of Linx, which is valued at £41.4 million at today's price.
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