The share price of Molins (LSE: MLIN) a company that supplies machinery and support services to fast-moving consumer goods sectors, including tobacco and food is currently down close to 12%, following publication of results for the first half of 2014.
Sales slumped 16%, down to 40m, with underlying pre-tax profit taking a 60% nosedive to 0.6m. On a statutory basis there was a pre-tax loss of 0.1m.
The company says that its first-half performance was broadly in line with management expectations, but that adverse market conditions in the Middle East and eastern Europe had a negative impact on itsTobacco Machinery division, owing to order deferrals.
However,Molins says that there was good progress initsScientific Services and Packaging Machinery divisions, wheresales in local currencies were up 4% and 9% respectively on the prior period.
Underlying earnings per share (EPS) were down almost 68%, to 2.1p, with a basic loss per share of 0.9p. However, the company has recommended maintaining its interim dividend at 2.5p per share.
Commenting on the results, CEO Dick Hunter said:
As in previous years, the Groups full year trading performancewill be significantly weighted towards the second half. The Board is mindful of the strength of sterling and current market conditions for the Tobacco Machinery division. The prospects for the Scientific Services and Packaging Machinery divisions continue to be encouraging. We continue to pursue our growth initiatives in all divisions.
At just over 140p, Molins share price is now down 27% on the year-to-date, compared with a fall of 8.5% by the AIM All-Share (Molins was admitted to the AIM in June of this year). But over the past five years, Molins share price has risen 99%, versus gains of 31% by the AIM All-Share and 44% by the FTSE All-Share.
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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.