Investment summary

October's IMS reinforced the positive interim statement, showing doubled underlying pre-tax profits and an increased order intake. Satisfactory margins are reported on the new orders. Current management action has the propensity to lift returns further over the medium term, despite the continuing challenging trading climate. A rating less than half that of leading UK-based global capital goods manufacturers recognises the obvious differences in size and the trading record, but ignores an above-average yield and an asset value of 248p per share, including 30p cash.

Last updated on 09/12/2011

Industry outlook

The UK capital goods market has changed materially in the past few years, with the more successful businesses anticipating and responding to specific customer problems. Many companies, including Molins, have transferred their manufacturing operations to lower-cost countries in an attempt to maintain competitiveness. The tobacco products industry is under political pressure in many developed markets, but worldwide consumption continues to rise.

Last updated on 09/12/2011