Full-year results from the Human Screen

Profits declined to marginal levels in the late 1990′s and remained there. Energy Technique hasn’t paid a dividend since 1998 and its share price has declined 99.9% since 1994. The Human Screen thinks it might be a turnaround!

Highlights

• Adjusted operating profit turned positive
• Return on tangible assets: 7%
• Adjusted net profit of ''166,000 compared to net cash flow of ''142,000 (''60,000 after net capital expenditure)
• Net cash up 62% at ''188,00, after deducting hire purchase obligations and invoice discounting. Net debt is ''481,000 after deducting undiscounted minimum future operating lease obligations.
• No dividend

The Human Screen comments:

Energy Technique’s operating subsidiary Diffusion has been manufacturing heating, ventilating and air conditioning products in the UK for over 50 years but judging by the earnings data in Sharescope, which goes back to 1992, profits, often variable, declined to marginal levels by the late 1990′s and have remained there. It hasn’t paid a dividend since 1998. Energy Technique’s share price has declined 99.9% since 1994.

It’s been a terrible investment.

The good news is that having sold off its maintenance business, the company is looking forward to the next 50 years. It’s returned to profitability in a moribund market while investment in equipment upgrades, and it’s considering a dividend.

Property investor Vincent Tchenquiz owns 58% of the shares through his Elsina investment vehicle, and the chairman, appointed in 2010, has a long and distinguished looking CV (he’s 74!), which is prompting the Human Screen to wonder whether the company is turnaround.

But at 1.3 times tangible book value the share price is not low enough to offer obvious value.

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