Warmer conditions at Roxspur

Shares of long-troubled thermal engineer Roxspur look interesting as they perk up to 8.5p against 2.5p a year ago. The last penny on the price was added with an upbeat trading statement from Ian Orrock, chairman, showing that the problems within the Wills portoflio are now largely resolved. Wills was acquired for a pricey £23m […]

Shares of long-troubled thermal engineer Roxspur look interesting as they perk up to 8.5p against 2.5p a year ago.

The last penny on the price was added with an upbeat trading statement from Ian Orrock, chairman, showing that the problems within the Wills portoflio are now largely resolved. Wills was acquired for a pricey £23m two years ago.

Roxspur arose from the ashes of the loss-making Levercrest playground equipment outfit that Orrock acquired five years ago and got back to profit in 1994. Then along came Wills and new problems.

Wills loss-maker Lightfoot, the refrigeration outfit, has been sold to Temperature for around £200,000. The remaining non-profitable part of Wills, the Varin sub-sea valve controls arm, will be sold or closed this month.

Orrock said that despite the Lightfoot and Varin losses, the group will still show the expected £900,000 first-half operating profits.

House broker Peel Hunt looks for an interim pre-tax £680,000 and £2m for the full year (against £172,000), accompanied by a token 0.05p dividend – the company’s first in seven years. The broker forecasts £2.8m pre-tax next year and a 1p dividend.

Better trading, margins, cashflow and the disposals have cut gearing over the past 18 months from 600% to 127%.

Restoring investor confidence may take time, but Orrock has already attracted institutional supporters like PDFM, Global Asset Management and Equitable Life.