16 June 2020
By Maynard Paton
Results summary for Andrews Sykes (ASY):
- Creditable full-year figures that showed revenue down 2% and profit down 7% due to less extreme weather.
- The decision to furlough 50% of UK staff feels odd given management talks of “resilient” trading, kept company depots open during lockdown and has declared a final dividend.
- A commendable cash flow projection raises pandemic-profitability questions but suggests extra funding is not needed.
- An impressive second half ensured the accounts remained healthy with high margins and an appealing return on equity.
- A possible P/E of 12-14 and yield of 4.5% does not seem expensive if indeed ASY does “return to normal levels of trading” for 2021. I continue to hold.