Since then, they have fallen slightly, leaving them 5% below their 24 January one-year traded high of £21.90.

So, some value might remain in the stock, which I could capture if I added to my holding in it.

But is there enough to make it worth my while?

Were the numbers that strong?

The H1 results published on 11 November were more exciting looking forward than they were looking back.

Revenue fell 7.9% year on year to £185.5m, while operating profit dropped 22.9% to £24.7m.

Operating profit margin declined 2.8% to 13.3%, and earnings per share decreased 29.2% to 33p.

Blimey. So, why did the share price soar?

Firstly, the explanation provided looked solid. US tariffs on the UK announced during the period caused delayed orders for, and shipments of, Oxford Instruments’ equipment. Meanwhile, Chinese export controls on rare-earth minerals affected some of the firm’s critical material supplies.

Secondly, management has moved quickly to mitigate these risks. Order books were repriced to take account of new tariffs, and supply chains were reorganised.

And thirdly, the firm has reiterated its strong medium-term guidance (to end-2027/28) on the back of these changes.

Strong business outlook

Additionally positive was that the firm announced strong performance guidance going forward.

This includes a compound annual revenue growth rate of 5%–8%. It also features an adjusted operating margin of 20%+ by end-2027/28 and a return on capital employed of 30%+ by that point.

The share price rise was further fuelled by a £50m increase in its current share buyback programme to £100m. These tend to support such gains. A 5.9% lift in the dividend to 5.4p would have done no harm either.

I still think that further sudden tariff changes could impact the company’s earnings growth over time. It is these that drive any firm’s share price.

That said, analysts forecast that Oxford Instruments’ earnings will grow by a stellar 39% a year to end-2027/28.

How’s the valuation now?

The discounted cash flow (DCF) model uses cash flow forecasts for any business to pinpoint where its shares should trade.

This provides a ‘clean’ valuation, unaffected by the over- or undervaluations present in any business sector. 

I have found this extremely useful over the years in ascertaining the gap between any stock’s price and its value. And it is in the gap between these two measures that big, long-term profits can be made. That is because assets tend to trade to their true worth over time.

In Oxford Instruments’ case, the DCF shows the shares are trading almost exactly around their ‘fair value’ right now.

My investment view

I believe that Oxford Instruments’ earnings will keep growing strongly, which would justify a higher price at some point. But that point is not now, in my view, as it is currently fairly valued. But I will be looking to add to my holding in the firm if the price-valuation gap widens.

In the meantime, my attention is on other much more undervalued stocks that have recently caught my eye.

The post 39% annual earnings growth forecast for this FTSE 250 sci-tech star after H1 results appeared first on The Motley Fool UK.

Part of this price drop followed the election of Donald Trump as US President in that month. In his first term in office and during his second-term campaign he advocated tariffs on trading partners. Once elected, he imposed these on multiple countries, including the UK.

Another part came after the 10 June announcement that the firm was going to sell NanoScience – its quantum business.

That said, I do not believe that the US protectionist policy will continue much past the end of Trump’s presidency. And even if it does, Oxford Instruments should be able to find ways of mitigating this risk. Indeed, its 13 June annual 2025 results stated: “We are well placed to mitigate any direct impact from tariffs.”

As for the sale of NanoScience, the firm underlines that it will enable it to focus on its three structural growth markets. These are materials analysis, semiconductors, and healthcare and life science. It adds that this should boost its adjusted operating profit margin by 1.9%.

I think it additionally worth noting that NanoScience only represented a small part of the company’s nanotechnology interests. Specifically, it only handled the special units used to supercool quantum computers.

So how does the business look now?

There are still risks in the firm, of course, as with all businesses. I think the main one is any major fault in any of its key products that could be expensive to rectify. It could also seriously damage the firm’s reputation.

That said, consensus analysts’ forecasts are that Oxford Instruments’ earnings will grow by a very strong 26.1% a year to end 2027. And it is precisely this growth that drives any firm’s stock price higher over time.

The latest results (annual 2025) saw revenue exceed £500m for the first time – up 6.4% year on year. Adjusted operating profit jumped 10.8% to £82.2m, while adjusted earnings per share rose 3.1% to 112.4p.  Revenue is the total income made by a firm, while profits are what remains after expenses are deducted.

The firm also saw 11% revenue growth to commercial customers away from academia over the period. This is part of its strategy to boost earnings growth.

How undervalued is the stock?

Experience as a senior investment bank trader taught me that price and value are not the same thing. The former is whatever investors will pay for an asset at any given time. Value is what the asset is truly worth, based on underlying fundamentals.

Over the past 35+ years in financial markets, I have also found that asset prices tend to converge to their true value over time.

My preferred method for ascertaining any stock’s value is the discounted cash flow method. This identifies where any share should trade, based on cash flow forecasts for the underlying business.

In Oxford Instruments’ case, the DCF shows its shares are 39% undervalued at their current £18.82 price.

So their fair value is £30.85.

I already own shares in the firm but will buy more soon based on its strong earnings growth prospects and its deep discount to fair value.

The post At a bargain-basement valuation now, is it time for me to buy more of this FTSE 250 sci-tech market leader? appeared first on The Motley Fool UK.

It was established in 1959 when it was spun off from Oxford University’s physics department. An early success was its pioneering role in the development of magnetic resonance imaging scans used in medical diagnosis.

Since then it has been at the cutting edge of the design and manufacture of high-tech products for scientific and industrial use.

Most notably perhaps, it is a world leader in nanotechnology. This involves manipulating matter at the atomic and molecular level to create new materials and devices. 

Why has the share price dropped?

A key reason behind its recent share price decline was news that it has agreed to sell its NanoScience business.

However, it is important to note that this only comprises part of the firm’s nanotechnology interests. Specifically, the bit that makes special units to supercool quantum computers.

The firm highlights that the sale will boost its margin by 1.9% increase by allowing it to focus on three core structural growth markets. These are materials analysis, semiconductor, and healthcare & life science.

Moreover, up to £50m of the proceeds from the divestment will go to a share buyback. These tend to be supportive of share price gains.

The latest results

The firm’s full fiscal year 2024/25 results saw revenue rise 6.5% year on year to £500.6m. This was the first time revenue had breached the £500m barrier.

Operating profit increased 10.8% to £82.2m, while adjusted profit margin edged up 0.7% to 17.8%.

Revenue is a firm’s total income, while earnings (or ‘profit’) are what remains after expenses have been deducted.

A risk for the firm is a major failure in one of its key products. This might damage its reputation and be costly to fix.

That said, consensus analysts’ forecasts are that its earnings will rise by a whopping 32.4% each year to end-fiscal year 2027/28.

Are the shares undervalued?

The first part of my assessment of the firm’s share price is to compare its key valuations with those of its competitors.

On the price-to-sales ratio, Oxford Instruments’ 2.1 reading is undervalued compared to its peers’ average of 2.7. These comprise Bruker at 1.7, Renishaw at 2.8. Spectris at 2.9, and Thermo Fisher Scientific at 3.5.

However, it looks overvalued at a price-to-earnings ratio of 39.7 compared to its peer group’s 33.3 average.

The second part of my assessment involves running a discounted cash flow (DCF) analysis. This is based on cash flow forecasts for the underlying business and pinpoints where any firm’s share price should be.

Using other analysts’ figures and my own, the DCF for Oxford Instruments shows its shares are 40% undervalued at £18.44.

Therefore, their fair value is £30.73.

My view

I am usually focused on stocks that deliver a high dividend yield, while Oxford Instruments only pays 1.2% at present.

However, its very strong earnings growth potential should power its share price and dividend much higher over time.

I also have no holdings in the fast-growing nanotech sector. Specifically, analysts project it will see a compound annual growth rate of 34.7% by 2032.

Therefore, I will buy the stock very soon.

The post Down 29% despite strong full-year results and 32% forecast annual growth, this FTSE 250 nanotech firm looks a hidden gem to me appeared first on The Motley Fool UK.

Roche’s points to the impressive success stories of several UK-listed companies that have delivered exceptional returns for shareholders, including Cranswick, Halma, Diploma, Games Workshop, 4Imprint, Ashtead Group, and JD Sports.

These companies have not only thrived but have become multibaggers, delivering returns several times the original investment. Their success challenges the notion that the UK market lacks growth opportunities and innovation.

So, that’s got me thinking, where could we see the next multibagger?

Quantum trends

The quantum revolution promises to reshape technology, offering breakthroughs in computing, cryptography, materials science, medicine, and artificial intelligence. Central to this shift is innovation like Google‘s Willow Chip, which can compute calculations in five minutes that would take a conventional super computer 10 quadrillion years.

Oxford Instruments (LSE:OXIG) is one UK-listed company that stands to gain as an enabler of the quantum revolution. In fact, it’s one of the few UK stocks in the space, which is a shame given there’s a continent-topping 39 quantum startups in the country.

The company’s expertise in advanced instrumentation and cryogenic technologies positions it as key beneficiary and enabler of quantum technologies. These cryogenic technologies are particularly important for obtaining the ultra-cold environment needed to maintain qubit coherence — the ability of a quantum bit to remain in a predictable wave-like state.

With strategic investments in R&D and industry partnerships, including one to build the UK’s first quantum computer by around 2030, Oxford Instruments could emerge as a major player in the sector.

It’s not a pure quantum play, but it could emerge as a multibagger based purely on the forecasts that the quantum industry could grow by 40 times over the next 15 years.

However, investors should be wary of near-term earnings growth, which isn’t particularly strong according to forecasts. This could push shares down given the above-average valuation. The caveat is these forecasts may not account for a quantum boom.

There’s potential everywhere

There’s certainly potential elsewhere as well.

One promising candidate is Kodal Minerals, a small-cap mining company focused on the Bougouni Lithium Project in Mali. With funding secured and plans to begin lithium production, the surging demand for electric vehicle batteries could significantly boost Kodal’s stock price if operations progress smoothly.

Celebrus Technologies, a data analytics firm with a market cap of £116m, is also promising. Its Celebrus platform helps companies optimise customer interactions, and steady earnings growth positions it well for expansion as demand for data-driven solutions increases.

In the sustainable construction space, Alumasc Group is an AIM-traded firm that could benefit from a growing focus on green building solutions. Alumasc specialises in water management and energy-efficient products, which are increasingly relevant as industries adapt to stricter environmental standards.

Finally, Rockhopper Exploration, an oil exploration firm in the Falkland Islands, offers high-risk/high-reward potential. The stock has surged in recent months, but it could go higher if everything runs to plan.

These companies operate in sectors poised for growth, but their smaller size and sector-specific risks mean careful research is essential.

The post Looking to beat the index? These UK shares could be the next multibaggers appeared first on The Motley Fool UK.

FTSE 250 company Oxford Instruments (LSE: OXIG) delivered its preliminary results report on 13 June and the shares remained steady on the day.

However, the adjusted figures were good for the trading year to 31 March 2023. Revenue increased by 14% year on year on a constant currency basis. And adjusted earnings per share shot up by 19.5%.

Yet the progress had been previously well-flagged. And the share price was up with events. But despite a full-looking valuation, I think this high-technology company has hidden value. And it may make a decent long-term holding in a diversified portfolio of shares even now.

Value is building in the business

I’m not the only investor to see attraction in the company’s long growth record and compelling business model, however.

Back in February 2022, fellow FTSE 250 constituent Spectris put in an offer to buy Oxford Instruments at 3,100p per share. On 13 June as I write, the stock is changing hands at just over 2,731p. So, it’s below the value that Spectris placed on it at the time.

Ultimately the deal didn’t proceed. However, since then we’ve now had the cracking results of another full trading year. 

And that means value has been building up in the business. In fact, the company managed to increase its net cash position in the period by almost 17% to just over £100m. And one of the attractions is the strength in the balance sheet. 

But cash balances and low borrowings don’t sort themselves out unless there’s a strong, cash-producing business backing it up. And on that score, the company is doing well. 

Over the past few years, revenue has delivered a compound annual growth rate of just over 4%. And that’s filtered through to produce normalised earnings growing at nearly 8% and operating cash flow of 7.5%.

Strong stock performance

Meanwhile, judging by the history of the share price, steady progress has been going on for some time. Some 20 years ago, we could have picked up some of the shares for about 180p each. And they’re more than 15 times higher now.

Over the last year alone the stock has gone up by around 30%.

But the strong action of the stock has led to one of the main sticking points for investors considering it now. And that’s valuation.

City analysts expect earnings to rise just 2% or so in the current trading year to March 2024. And set against that expectation, the forward-looking earnings multiple is almost 25. That’s a big ask considering growth may have stalled in the short term. 

Indeed, the chunky valuation is a clear and present risk for investors now.

But last year, Spectris said: “Oxford Instruments’ highly attractive, differentiated technologies are leaders in their fields.” And I reckon such market strength and the company’s phenomenal growth record indicates ‘hidden’ value in the stock.

Meanwhile, the current outlook statement has an optimistic tone. And I think the business is worth further research with a view to establishing a long-term position in the shares.

The post Earnings: Oxford Instruments shares steady on results day but there’s hidden value here appeared first on The Motley Fool UK.

They can be found in everyday consumer products, including smartphones, laptops, televisions, and washing machines. They also have applications in many other areas, such as information technology, artificial intelligence, communications infrastructure, medical equipment, transportation networks and military systems. In fact, it’s no exaggeration to say that semiconductors are integral to the entire global economy.

According to the Semiconductor Industry Association, a record 1.3 trillion units were shipped in 2025 with sales surpassing $600bn for the first time. But with AI infrastructure spending still marching upward, analysts’ forecasts are projecting even more growth before the end of the decade.

This could make UK semiconductor stocks an attractive proposition. But what are the best chip companies to invest in, and is this market sector right for you? 

What are semiconductor stocks?

Semiconductor stocks are companies that design and manufacture computer chips, whose shares can be bought and sold on a public stock market. 

The industry is sometimes divided into two sub-sectors:

• Semiconductors
• Semiconductor Equipment & Materials

Companies in the former category are producers of semiconductor chips. Companies in the latter category supply tools, parts, and equipment to the semiconductor industry.

Top semiconductor stocks in the UK

Here are the leading UK semiconductor shares traded on the London Stock Exchange in order of market cap as of January 2026: 

Oxford Instruments

Oxford Instruments is a long-established and profitable technology company. It’s also currently among the largest UK semiconductor stocks.

The company serves a range of different markets, including materials analysis as well as healthcare & life sciences. But in recent years, semiconductors have become an increasingly larger core part of operations, generating 29% of revenue in 2025 – it’s the second largest segment.

Management has signalled its confidence in further growth in demand by building a new state-of-the-art facility in Bristol to house its compound semiconductor systems business. Capabilities include fault-finding and failure analysis within advanced micro devices for the leading semiconductor manufacturers, and cleanliness control in precision manufacturing.

IQE

IQE describes itself as “the leading global supplier of advanced compound semiconductor wafers”. These wafers have a diverse range of applications across handset devices, telecoms infrastructure, and 3D sensing.

In recent years, the company has struggled to maintain growth, with earnings consistently providing elusive growth, a struggle that continued throughout 2025.

However, entering 2026, thanks to the tailwinds of AI spending, the group’s order book does show signs of strength, offering improved demand visibility.

CML Microsystems

CML Microsystems occupies a profitable niche in the development of mixed-signal, radio frequency, and microwave semiconductors for global communications markets. It targets sub-segments with strong growth profiles and high barriers to entry.

CML believes its diverse, blue-chip customer base and broad product range largely protect it from the cyclicality usually associated with the semiconductor industry.

Nanoco Group

Nanoco is another young UK semiconductor company that’s still loss-making – albeit by a small margin.

Its niche focus on quantum dots and nanomaterials limits the group’s current market penetration opportunities. However, with new technological innovations accelerating, demand for its specialised products is slowly starting to ramp up. And in the meantime, the business has continued to deliver resilient revenues reaching £7.6m in its 2025 fiscal year.

Nevertheless, management continues to describe its business as “a world leader in the development, manufacture and supply of quantum dots and other semiconductor nanomaterials”.

Investing in foreign semiconductor markets

UK semiconductor stocks are relatively small when viewed on the world stage. As such, investors seeking to buy shares in industry giants will have to look to overseas stock markets.

Leviathan Taiwan Semiconductor Manufacturing Co and Dutch colossus ASML can both be traded in the US market. And of course, the US has homegrown powerhouses.

• Nvidia Corporation – $4.45trn market cap
• Broadcom Inc – $1.61trn market cap
• Intel Corporation – $232.4bn market cap
• Qualcomm Inc – $175.9bn market cap

A further option for UK investors is to buy shares of the London-listed exchange-traded fund VanEck Semiconductor ETF. The fund holds 25 of the world’s top chip stocks (including the six just mentioned), and is a one-stop shop for broad exposure to the industry.

Are semiconductor stocks right for you?

Investors considering buying a semiconductor stock need to take a number of things into account. First, it’s important to be aware that the industry is highly cyclical. It’s notorious for periodic supply-and-demand imbalances, leading to spells of feast and famine. Investors need to be prepared to accept some large swings in the share prices of semiconductor stocks.

Another thing to be aware of is that the industry is very much driven by the maxim of ‘smaller, faster, cheaper’. There’s constant pressure on chip companies to come up with ever more advanced technology at lower prices. It can be as short as a few months before one state-of-the-art product is overtaken by another.

To successfully compete for market share, semiconductor companies need to sustain a breakneck pace of innovation. As such, it’s necessary to recycle a high percentage of revenue back into research and development (R&D).

The best chip companies to invest in

While global semiconductor sales growth is a given, translating it into profitable growth is less certain. Therefore, picking the best chip companies to invest in can be tricky.

High gross margins, operating margins, and free cash flow generation, relative to sector peers, can indicate a company that’s operationally efficient and adept at identifying good areas to target R&D. These qualities, together with a strong balance sheet, may better equip a firm to navigate the hazards of the semiconductor cycle.

If you’re prepared to accept some large ups and downs in share prices and to put a bit of work into finding the stronger businesses in the industry, tapping into the structural growth of this market sector may be right for you.

The post Investing in Semiconductors: Top UK Semiconductor Stocks of 2026 appeared first on The Motley Fool UK.

The FTSE 250 nanotechnology company manufactures a range of products used sectors ranging from mining to aerospace. It has a presence across geographies as well, which has held it in good stead over the last year. 

Positive trading update for Oxford Instruments

The company’s latest trading update says that both orders and revenues have shown strong growth in the five months of its current financial year so far. The company now expects trading for the full year to be “slightly” ahead of expectations. It does expect some downside from currency fluctuations, however, which could impact revenue by 4% and operating profit by 3%. While this is a downer, the fact is that it has a limited impact. And in no way does it reflect on the company’s underlying performance. 

In fact, if anything, the latest update continues to add to Oxford Instrument’s ongoing robust performance. Its operating profit had risen by 33% for the full year ending 31 March as well, despite there being no change in its revenue because of the pandemic. 

Rising price for the FTSE 250 stock

It is little wonder then, that the company’s share price has been rising. In the past year alone, it has grown by 54%. This may not sound like a whole lot right now, given the low phase for the stock markets at this time last year. In fact, there are many stocks that show pretty impressive capital gains right now. But Oxford Instruments stands out, because its share price has been rising consistently for a while. In the last three years alone, its share price has more than doubled. 

The challenge to a stock like this is of course that it starts looking pricier than others over time. It has a price-to-earnings (P/E) ratio of 34 times right now. But then its prospects look good too. This indicates to me that there can be room for a share price increase. This is particularly so now that the economy is back. As more growth takes place, there are chances that demand for its products will do so as well. 

Would I buy it?

I have been bullish on the stock for a while now, but have somehow or the other not bought it. It has run up quite a bit since the time I first started writing about it. But it looks like it could rise even further. I maintain that the stock is a good buy for me, and one that I could hold for at least the next few years. 

The post This FTSE 250 stock’s price has doubled. Would I buy it? appeared first on The Motley Fool UK.

The FTSE 250 stock is now up some 6% since late March, to 2,130p as I write. This may not appear like a big jump, but I do believe it is confirmation that the Oxford Instruments share price is headed in the right direction. And that my earlier call on it was correct. 

Robust results boost Oxford Instruments share price

Its latest results support the idea as well. For the full-year ending March 31, its statutory operating profit increased by 33% to £53m. Its profits increased less according to adjusted numbers, which essentially reflect how a company views its own performance. But even then, the increase was a good 13.3%. 

It also started paying a dividend, though the yield is negligible. 

The company’s revenue was almost unchanged from the year before, with a marginal 0.3% increase. But in a year of “significant covid disruption” as Oxford Instruments terms it, I would not read too much into lacklustre revenue growth. 

Encouraging outlook

I am looking more closely at its forward-looking numbers instead. That includes the order book, which grew by 13% in the past year because of strength in its North American and Asian markets. Such an increase in the order book is encouraging because it assures future revenue. 

And cross-geography demand was a positive too, because it ensures that Oxford Instruments is not vulnerable to individual markets’ ups and downs. This is especially positive at the moment, when the spread of Covid can hamper business in specific geographies. 

A high share price need not be a deterrent

The company’s high share price can put off investors. It is just shy of its recent all-time highs right now. But that is true for many other stocks as well. The return of investor bullishness and the anticipation of better company performance post-pandemic have driven up share prices. 

I reckon that some of this optimism could die down for some stocks if companies’ performance does not pick up. But I doubt if that will be true for Oxford Instruments. In recent years it has been a financially stable company and its prospects look good too. 

Its share price has also increased over time. In the past year alone, it is up over 50%. In the past five years, it has more than tripled. Barring any unforeseen challenges, I reckon it can continue to perform. 

I maintain my view that the Oxford Instruments share price can rise higher. It is still a good long-term buy for me. 

The post I was right about the Oxford Instruments share price. Here’s what I’d do now appeared first on The Motley Fool UK.

Why the Oxford Instruments share price is up

The company mentions three developments that reflect well on its performance in this update. I think these can explain the increase in the Oxford Instruments share price. They are:

#1. Orders: The company saw a good order increase in the second half of the financial year ending 31 March 2020, which benefited from Chinese growth. 

#2. Revenues: Despite adverse currency developments, it expects revenues to be “marginally ahead” of last year. This is particularly good news in comparison to last year. Its revenue was actually marginally down for the financial year 2020 from the year before, even after negating the impact of currency fluctuations. 

#3. Operating profits: These are expected to be between £55m and £57m for the current financial year. Last year it reported an operating profit of £50.5m. So, this year it expects to see at least 9% to 13% from the year before. 

This update in itself bodes well for the company, but there is more going for it too:

#1. Resilient financials 

Even though Oxford Instruments’ revenues have not shown consistent growth over the years, I like that it has remained consistently profitable. That it is expected to continue the trend of financial resilience even for the current financial year is something to note in a year when many other companies have struggled. 

#2. Share price growth

Given its relative financial stability it is little wonder that the Oxford Instruments share price continued to rise in 2020.  However, more important is the growth seen since November last year, when the stock market rally started and many other high-performing shares fell out of favour with investors. 

Within days of the rally, its share price jumped 30%. While it started softening in February this year, it is back near its all-time highs of December, 2020 as I write. 

#3. Dividends return

While Oxford Instruments is more a growth stock than an income one, it does pay a dividend. It had paused dividend payouts when the pandemic struck, but by November it had reinstated them at their 2020 levels. 

The yield is a small 0.2% but I think the fact that it has started paying dividends again is confirmation of its confidence in this year’s performance. 

The risks to Oxford Instruments

There can be some downsides to investing in Oxford Instruments too. One, 2020 growth was buoyed by Asian growth. But the pandemic can come back to haunt us all over again, which will tell on its performance, needless to say. 

Two, its share price has run up quite a bit already. I am not sure if it will continue to look as attractive to investors once the lockdowns have lifted and pandemic-impacted companies start coming back to health.

The upshot

At the same time, the company has proven itself over time and functions in a market that is growing in double-digits annually. Even with a short-term decline in the Oxford Instruments share price, I reckon it will be a riser over time, making it a good stock for me to buy.

The post Why the Oxford Instruments share price is up 15% today appeared first on The Motley Fool UK.

Why I think Oxford Instruments is a top technology stock

A scoot around the company’s website left me impressed by the range of techy products. If I’m looking for solutions in the areas of Atomic Force Microscopy or Optical Imaging, OXIG has it covered. Or, if I want to address my needs in Electron Microscopy, Nuclear Magnetic Resonance and Modular Optical Spectroscopy, I’d look no further than the company’s catalogue.

Chief executive Ian Barkshire said in today’s report the company is positioned to provide high technology products and services “to the world’s leading industrial customers and scientific research communities.” And those customers use the company’s kit to image, analyse and manipulate materials down to the atomic and molecular level.

And the numbers stack up well. There’s a multi-year record of profitable, cash-backed trading and the company has even been paying shareholder dividends. Meanwhile, the operating margin has been running around 12.5% and OXIG has achieved a return on capital just below 15%. I reckon those quality indicators suggest the company commands a well-defended trading niche in the market.

However, today’s figures reveal a small dent to trading caused by the pandemic. Revenue slipped by 11% year on year, and adjusted earnings per share eased by just under 9%. But cash from continuing operations rose by just over 52%. And the firm’s net cash position on the balance sheet ballooned from around £14m to just over £81m.

Growth in orders

And “robust” trading and positive cash generation through the period led to the directors declaring an interim dividend of 4.1p per share. I think that’s encouraging because the firm cancelled last year’s interim dividend in the early stages of the pandemic.

Looking ahead, Barkshire explained there was “strong” order growth in the first half of the year and a “good improvement” in the order book. He expects the full-year performance to be “a little behind” last year but ahead of current analysts’ forecasts. And he thinks the company has “a solid foundation for future growth.” Meanwhile, the market appears happy with what it sees. Indeed, the share price is buoyant today.

However, I think the valuation remains fair for a company with such long-term growth opportunities. With the share price at 1,900p, the forward-looking earnings multiple is just over 31 for the trading year to March 2022. And the anticipated dividend yield is around 0.8% with earnings expected to cover the payment around four times.

I’m tempted to buy a few shares and tuck them away for the next 20 years to see how the growth story unfolds.

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