Porvair shares tipped as a ‘buy’ as group announces healthy profits

25th January 2016


As Porvair reports its full year results Graham Spooner, investment research analyst at The Share Centre, explains what they mean for investors…

On Monday , specialist filtration and environmental technology group Porvair reported a 9% rise in full year pre-tax profits to a record £9.2m.

As well as this, the company said basic earnings per share rose by 8% and that underlying revenue grew 7% over the period, despite overall full year revenue slipping.

The company is confident of growth ahead, and this is supported by a new product development pipeline and recent acquisitions.

We continue to like that the group’s products are specialist and benefit the environment in areas such as emission controls.

Porvair plans to continue investing in its capabilities and capacity in 2016 in order to grow the business. Investors should note that it has been actively expanding its facilities in the UK and US, which in turn has attracted new customers.

Based on these factors, we currently recommend Porvair as a ‘buy’ for higher risk investors seeking growth over the longer term.

On a forward price to earnings ratio of 18, the shares do not appear overly cheap however, this is a smaller company that is establishing a niche for itself in regulated markets that continue to grow, and has a good track record in earnings growth.

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