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Andrews Sykes – 2016 results, dividend yield remains attractive despite share price rise

By Steve Moore & Tom Winnifrith | Sunday 14 May 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Andrews Sykes (ASY), a 380p offer price November share tip, has announced results for the 2016 calendar year and that it is “cautiously optimistic for further success in 2017”.

The results show a £3.7 million increased profit from 2015, of £14.5 million, on revenue up 8.9% at £65.4 million. The stated 2016 profit did though benefit from “a foreign exchange gain arising on the retranslation of inter-company balances of £1.6 million” and, after also particularly £10.1 million of equity dividends paid, net cash increased by £3.1 million to £17.7 million. Current assets over liabilities increased by £3.3 million to £26.2 million.

The company noted the result “reflects strong performances from both our hire and sales businesses in the UK and Europe and the Middle East. Part of this increase, in Sterling terms, is due to the relatively weak pound compared with overseas currencies but nevertheless the underlying trading performance in our overseas subsidiaries shows a significant improvement compared to last year”.

It added it’s “always being mindful of the favourable or adverse impact that the weather can have on our business”, but that the “result further demonstrates that with a diverse product range we are able to return a strong performance despite the absence of any significant extreme weather conditions” and proposes a maintained dividend of 11.9p per share to be paid on 26th June to shareholders on the register as at 26th May, taking the per share payout for the year to an also unchanged 23.8p.

The shares have responded higher to above 500p, though this still suggests a dividend in excess of 4.5% - which sees the Income portfolio content to continue to hold.

This article first appeared on the Nifty Fifty website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next share tips from Tom & Steve and a new shorting piece from Lucian this week click HERE

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