Investment: FKI's progress fails to convince the City
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.POOR OLD FKI. The engineering group has come a long way in the past few years - selling off a load of old businesses and buying some new ones. All this has been good for its bottom line, and earnings per share have grown by more than 40 per cent since 1996, with another 12 per cent rise forecast for the year to March.
But investors are not convinced. In the past three years, FKI's shares have trailed the rest of the market by almost 50 per cent. Yesterday they fell again, dropping 8.5p to 120.5p, as FKI warned of a "difficult and uncertain economic background".
These worries are hardly new .In FKI's case, however, they are amplified by continued jitters about the group's strategic direction.
But chief executive Bob Beeston insists there are no plans to add to FKI's three divisions, although it is looking for a distribution business to bolt on to its existing operations. It may even consider further disposals.
Meanwhile, FKI's reputation for squeezing higher margins and cash out of its businesses remains fully deserved. A 56 per cent increase in capital spending suggests this is not being achieved at the expense of long-term growth prospects.
True, some caution is sensible. But on a forward multiple of just seven times forecast full-year profits the shares look horribly oversold. A speedy recovery is unlikely, but it's hard to see the shares falling any further.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments