Full-year results from the Human Screen

Design and engineering consultancy Hyder Consulting is profiting because of its operation in Australia, Hong Kong and the Middle East. The Human Screen doesn’t know whether that will last.

Highlights

• Adjusted operating profit up 4%
• Return on tangible assets: 11%
• Adjusted net profit of ''17m compared to net cash flow of ''11m (''8m after net capital expenditure)
• Net cash up 19% at ''16m, ''0m after deducting ''16m pension deficit
• Per-share dividend up 16%

The Human Screen comments:

Design and engineering consultancy Hyder credits the large proportion of overseas revenues for its performance this year. More revenues come from the Asia Pacific region, principally Australia and Hong Kong, than Europe, principally the UK and Germany, and Hyder also operates in the Middle East.

That’s obviously a good thing now, but whether it’s a good thing in years to come depends on which side of the China divide you stand. If growth there comes shuddering to a halt, Australian projects will surely follow. Likewise, a contrarian view on oil prices makes the Middle East a shaky prospect. The Human Screen recognises the risk, but does not have circuits that predict the global economy.

Hyder, the product of a management buyout from the water utility company of the same name in 2001, is following the money. It made three small acquisitions in the year in Australia and the Middle East, and established an office in China.

The market values Hyder at ''153m, seven times earnings before interest, tax and the amortisation of acquired intangibles.

^HS+ (worth watching for improvement in fundamentals/price)