Tyman (LON:TYMN) management has set a clear vision for developing the platform created to date, through fundamental business footprint changes and integrating acquisitions. FY16 will demonstrate further execution of this strategy and underpin earnings progress. The rating factors in growth – possibly ahead of our estimates – and provides income attractions.
FY15 results ahead and acquisitions in early FY16
We trimmed estimates in November after Tyman flagged weaker Q3 trading, although FY15 results came in line with our previous, post H115 views. This was chiefly due to a better outturn from AmesburyTruth (partly aided by FX). Overall, cash flow was also relatively favourable against our estimates and Tyman ended FY15 with £82m net debt. The post year-end acquisition of Giesse for c £61m expands the group’s product portfolio and geographic footprint, making a scale increase in Schlegel International’s operations. Response Electronics is a smaller UK deal, which will help ERA’s development of new electronic products. These deals enhance our underlying earnings by c 7% in a full year and, as with other acquisitions, Tyman is targeting ROAI of c 15% (by March 2018).
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