Laird lauds good momentum as reinvestment drives earnings growth

Laird, which supplies components such as antennae for Apple's iPhones and other devices, has begun 2015 with good momentum after dialling in a solid set of annual results.

The FTSE 250 group fizzed ahead in 2014, with revenues up 5% to £564.9m or up 11% in dollar terms, with revenue from Apple and its supplier companies remaining at 18% of the group total.

Management's aim to diversify its customer base away from its reliance on its largest customer saw six customers each provide over $25m in revenues, up from five the year before, and with 79 customers over $1m, up from 70.

Laird reinvested 9% of revenues reinvested in research and development, also expanding its production footprint with new factories in China, Vietnam and the United States and opened a new design centre in South Korea.

Excluding the contribution from the April acquistion of a 51% interest in Korean prototype design company Model Solutions, this investment in new product development helped Laird drive 8% organic revenue growth over the year.

This came from 9% growth at the performance materials business, mainly from smartphones and 4G mobile infrastructure, while the smaller wireless systems division expanded organic revenues 8% from automotive and machine-to-machine.

Underlying profits before tax rose 5% to £63.2m, or 63% at the statutory level due to large tax charge the prior year and a £2.1m credit in 2014. Laird has a US deferred tax credit of £20.1m due from exceptional loss recognition.

Underling earnings were lifted 3% to 19.1p and the full year dividend by 4% with a final dividend of 8.23p per share.

"Our consistent and disciplined strategy of investing for growth and driving cultural change is transforming our business, with good revenue growth and stable profit margins," said chief executive David Lockwood.

"We have a clear strategy and operate in attractive growth markets. We have started 2015 with good momentum and believe that we are well placed for further growth over the year."

Broker Investec believes the high level of reinvestment, combined with margin expansion and continued top-line growth will enable the business to sustain mid-teens EPS growth into the medium term. However, due to the slightly weaker dollar, analysts have trimmed their EPS forecasts for 2015 by around 4% to 22.2p.