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Bottom Line: Howden comeback

Tuesday 11 January 1994 19:02 EST
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HOWDEN, the engineering company, proved yesterday that it, too, is capable of bouncing back.

In recent years the Glasgow company has been laid low by a succession of disasters after taking on several large construction projects. These days Howden is content to emphasise its industrial fan-making business, boosted by two US acquisitions.

Despite news that Wirth, a German drilling equipment maker, was losing money, Howden's shares jumped 13 per cent to 96p. For the six months to 31 October, Howden's pre-tax profits leapt from pounds 6m to pounds 9.5m - although the comparable figure was depressed by pounds 2.5m of one-off charges.

Operating profits rose 40 per cent to pounds 10.4m. The margin widened from 4.7 to 5.9 per cent.

Short-term growth can be expected from further benefits of a rationalisation programme, particularly in the US. In the longer term, Howden can hope for rising orders if construction picks up. Full-year profits could reach pounds 26m, indicating a p/e ratio of 15.4. The past is past. Buy.

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