Dewhurst Enjoys Record Profits, Warns Of “Choppy” Sales

The Dewhurst share price has risen strongly during the past 12 months. It’s up 124% since this point last June and the business — which manufactures pushbuttons that one sees on elevators, trains and in a variety of other places — struck record closing highs of GBP21.30 per share in May.

It’s lost some ground since then and fell again on Wednesday following the release of latest trading numbers. At GBP20.30 per share Dewhurst is now trading 3% lower on the day and at one-month lows.

In a financial statement for its fiscal first half Dewhurst said that it had enjoyed record profits in the six months to March.

The AIM company said that revenues rose 3% in the period, to GBP28.9m. Adjusted operating profit soared 28% in the first half, to GBP4.4m, while pre-tax profit increased 36% year-on-year to GBP3.4m.

For the six months to March Dewhurst said that sales at its Lift Division were similar to those recorded a year earlier. Instead sales growth was “predominantly driven” by the company’s Transport Division, where deliveries of cycleway products continued to be strong.

Dewhurst endured further slippage at its Keypad Division, however. It noted that “demand for cash and ATMs is still depressed and is expected to remain low, especially whilst lockdowns remain in place.”

Looking ahead, Dewhurst said that it expects its sales to experience some turbulence following the pandemic.

The pushbutton manufacturer said that it had witnessed some pent-up demand being released during the first half as coronavirus restrictions were unwound in some of its markets.

But Dewhurst said that this sales pick-up seems to be running out of steam, commenting that “we expect there to be a lull in demand until economies fully open up again and customers start commissioning new projects.” It expects sales to be “a bit choppy and unpredictable [and] particularly in regard to timing” in the meantime.

Dewhurst also noted that supply chains have been “severely disrupted” by the public health emergency and that it is taking time to adjust to new arrangements. As well, lead times and purchase prices are both increasing and the business expects margins to start getting squeezed.

The company said that “we held reasonable stocks going into this period but it is proving challenging maintaining stock at the level we would like.” However, it added that “the group still has strength and solidity from its balance sheet to carry it through any short term turbulence.”

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