The Investment column: L Gardner
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Your support makes all the difference.ENGINEERS AREN'T supposed to deliver double-digit earnings growth, but L Gardner's been bucking the trend thanks to its exposure to growing demand for trains, planes and buses. The group is confident that it can continue to deliver earnings growth of 20 per cent.
Last year's results lend weight to the claim. Operating margins strengthened. Sales, including acquisitions made at the end of the previous year, grew by 50 per cent while underlying sales rose 18 per cent.
The merger with Cirqual, its rival, earlier this year has upped the group's purchasing power and exposure to aerospace.
The civil aviation industry, and Airbus in particular, shows no sign of weakness in Europe. Meanwhile, the troubles in the US aerospace industry, where Boeing is cutting supplier numbers, present acquisition opportunities for the group.
L Gardner sees Virgin's continuing investment in rolling stock providing a degree of earnings security at home.
Analysts' forecasts of pounds 18.5m pre-tax profits and 36p earnings per share put L Gardner on a forward multiple of 8 times. That's good value.
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