May 2007 Financial News

AGL Releases Half Year Results

May 14, 2007

Results for the Half Year Ended March 31, 2007

For the Half Year Ended March 31, 2007, Agostini’s Limited (AGL) reported Earnings Per Share (EPS) of $0.56, up 60.00 per cent or $0.21 on the corresponding period in fiscal 2006. Q207 on Q206, the EPS was up by 100 per cent from $0.14 to $0.28. Thus, both Q107 and Q207 produced an equal EPS of $0.28.

Turnover for the Half Year period was $237.78 million, up by a significant 28.23 per cent or $52.34 million on the comparable Half Year in 2006. Q207 on Q206, this figure also saw considerable growth, moving from $90.00 million to $111.22 million. However, when compared to the last quarter (Q107), Turnover for Q207 was down by 12.12 per cent or $15.33 million.

The Chairman has noted that the Business Units in the Trading and Services Divisions have continued to experience strong sales and profit growth, with Agostini Pharmaceutical Limited, Agostini’s Fastening Systems and Agostini Interiors performing particularly well. Also, Agostini Industries Limited benefited from the favourable weather conditions during the second quarter, with good progress at the Housing Development Corporation project at Debe. However, while Agos Lighting’s production efficiencies are improving, the recent increases in the price of steel will hamper the immediate recovery of the unit.

Operating Profit for the six month period stood at $22.28 million, a noteworthy increase of 42.97 per cent or $6.70 million on HY06. This figure was up by a remarkable 58.04 per cent or $4.11 million, Q207 on Q206. Net Finance Costs amounted to $1.84 million and was down by 29.98 per cent or $0.79 million from the comparable Half Year in 2006. Thus, Profit Before Taxation ended the six month period at $20.45 million, up by a significant 57.75 per cent or $7.49 million.

The Effective Tax Rate for the period under review was 26.55 per cent compared to a Rate of 26.82 per cent in HY06. As such, AGL’s Profit After Taxation totaled $15.02 million, an increase of 58.32 per cent or $5.53 million on the same period last financial year.

The Chairman has stated that barring unforeseen circumstances, the Group is well placed to continue capitalizing on the strong economy and is expected to see improved results in the current financial year.

The Directors have approved the payment of an Interim Dividend of 15 cents per share (10 cents- 2006). The dividend will be paid on June 11, 2007 to shareholders on record on May 23, 2007.

The shares of AGL last closed at a price of $9.96 on the local market. At WISE’s Forecasted EPS of $0.90, this share is trading at a multiple of 11.07 times. This multiple is attractive given that this share usually trades in the range of 14 to 16 times. Thus, based on this analysis we continue to recommend a BUY. However, we caution investors that this share is tightly held with over 75 per cent held by substantial shareholders, thus acquiring shares may be difficult.

Gia Singh
WISE Equity Research Team