Laird surges as first-half profits advance

Laird, the electronic components maker that counts Apple as its biggest customer, posted first-half results slightly ahead of expectations thanks to its increasing diversity of revenues.

Revenue rose 21% to £305.9m thanks to favourable currency movements, with more organic growth of 11% in dollar terms.

Underlying operating profits increased 20% to $46.9m as operating margins expanded to 10.1% from 9.3% thanks to increased volumes from sales into the smartphones market and a full period contribution from the April 2014 acquisition of Model Solution.

A 36% increase in underlying profit before tax to £26.9m, helped by currency benefits of roughly 10%, accompanied an operating cash flow surplus of £28.8m at a conversion rate of 94%.

The interim dividend was increased by 3% to 4.40p.

Chief executive David Lockwood said: "We continue to drive our strategy of diversifying revenue between sectors and, within those sectors, across market-leading customers. As such, we are increasingly well positioned to benefit from the growth in the 'Enterprise Internet of Things'."

Stronger segments in the half were smartphones, with 39% more customer diversity due to the ramp-up from Samsung, and automotive as new contracts were won with a range of manufacturers.

The diversification across markets saw a new customer wins in the medical and food & beverage sectors, while the shielding solutions division added to its strength in the smartphones market with an increased offering to appeal to the automotive sector.

Broker Numis said the increasing diversity of revenue left Laird less exposed to volatility from any particular customer or end market and that the second-half weighting of the business was reducing.

Analysts Nick James kept estimates for the full year unchanged, with risk "clearly more weighted to the upside".

"The foundations are now in place for sustained high single digit revenue growth, leading to mid-teens earnings growth, which should lead to significant value creation," he said.

Laird shares were up 14.55% to 400.70p at 1151 BST on Thursday.