Stadium set for rise, says broker

Undervalued, is the verdict of house broker NatWest Securities on the shares of Stadium, the plastics and electronic components maker. The firm has just reported a 16% profits increase to £4.7m, earnings of 12.3p and a 4p dividend for its first year as a quoted company. The figures are in line with City expectations, despite […]

Undervalued, is the verdict of house broker NatWest Securities on the shares of Stadium, the plastics and electronic components maker. The firm has just reported a 16% profits increase to £4.7m, earnings of 12.3p and a 4p dividend for its first year as a quoted company.

The figures are in line with City expectations, despite the adverse impact of customer destocking through to the third quarter. Since then, demand has improved.

While conceding that as a market newcomer Stadium was a bit of an unknown quantity, NatWest said the current 25% discount on its shares was too big.

`If the company delivers the figures we expect this year, there is scope for a 20-30% rise in the shares,’ NatWest said. For 1997, it forecast £5.75m pre-tax, earnings of 14.6p a share and a 5p dividend.