Investors liked a lot of stocks yesterday in the modest rebound from Friday's nervy sell-off.
Crane Group was one of those.
Even though Crane is still being buffeted by the sluggish housing market, it's managing to find ways of earning more.
Full-year net profit was reported at $47.8 million, down 35.3% on the 2006 result, but that was after significant items.
Underlying net profit before significant items was $54 million, which was up 14.5%.
The company also said it expected an improved underlying performance in the 2008 financial year.
"Current expectations are that economic conditions in Australia are likely to be more favourable than in New Zealand in FY08," the company's statement to the market said.
"Overall, Crane Group expects an improved underlying performance from the group's businesses in the coming year."
And that's what the market focused on. The shares ended 96c higher on $17.36 but rose to a day's high of $17.45.
It's the obsession for the 2007 reporting season, more so than in previous reporting periods; the obsession with the outlook.
Telstra suffered because the outlook for 2008 wasn't as nice as the market wanted to hear, likewise printing and distribution group, PMP, also saw a less than robust 2008 ahead for it. The shares in both companies were sold down as a result (even allowing for the great Friday fall).
Crane's CEO, Greg Sedgwick, was naturally pleased with the company's performance.
"It was a good year with earnings before interest and tax (EBIT) from continuing operations up some 12.5% on last year," Mr Sedgwick said.
"Strong cashflow from operations and tight management of working capital have also allowed us to re-invest in both our Tradelink and Iplex businesses.
"This is now beginning to deliver results," he said.
Earnings before interest and tax (EBIT) was up 12.5% to $103.2 million and revenue from continuing businesses was up 12.3% to $2.19 billion.
All divisions of the company posted improved EBIT, except the CDNZ business which declined from $20.9 million to $20.1 million.
The Iplex business rose from $59.2 million to $65.5 million, Tradelink improved from $17 million to $22.3 million and Metals increased from $13 million to $15.7 million.
Mr Sedgwick said that "Trading in each of our Iplex, Tradelink and Metals Distribution businesses continued to improve throughout the year. This more than offset the flat contribution from CDNZ in New Zealand and the impact of significantly lower volumes in Crane Group's remaining metal manufacturing business, Crane Copper Tube."
The company declared a fully franked final dividend of 33 cents a share, bringing total dividend for the year to June of 65 cents a share, up from 60 cents in 2006. Earnings per share before significant items rose 11.4% to 89.9 cents per share; while cashflow from operating activities was $76.5 million for the year.
Net significant item losses after tax were $6.2 million for the period. Significant items included an $11.8 million after tax expense for impairment, restructuring and redundancy costs relating to Crane Group's metal manufacturing business and a $4.6 million after-tax profit during from the sale of property and other assets relating to the Conex business.
The company said its balance sheet remained solid as a result of the good cashflow generated during the year. Net debt at 30 June 2007 stood at $201 million, representing gearing of 29% (measured as net debt to net debt plus equity). Net financing cost for the period was $22.7 million.
"Net capital expenditure for the period was $44.9 million, an increase of $12.3 million over last year, reflecting investment in manufacturing capacity in Iplex and acceleration of network development in Tradelink during the period."
