Good performance of Britain’s top engineering companies has pushed the sector to premium position in the financial markets, says a leading analyst.
`The City does not have a problem with its perception of the engineering sector,’ Sandy Morris of ABN-Amro Hoare Govett told delegates at last week’s KPMG Engineering Industry conference in London.
Morris, who used 14 engineering companies including McKechnie, Siebe and Spirax Sarco, for his analysis, argued that global sales and a perception of being world leaders allowed most to offer higher dividends.
Morris’s analysis showed they did particularly well with cash flow. `If you can achieve a cash return on capital employed of over 7% you will almost certainly be able to pay dividends and expand business,’ he said.