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Shaft Sinkers - Punchy dividend yield of 7.4%

June 2012

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • SHFT
  • Price:
  • 95.5p
For the second time in two months Shaft Sinkers has beaten market expectations. Full-year results showed eps rising to 23.4p, some 15% ahead of forecasts and 12.5% ahead of the 20.8p in 2010. Revenues rose 24% to £226.5m while pretax profit before an exceptional IPO bonus of £3.1m increased 29% to £16.6m. Net cash was £6.1m while the dividend was 7.1p, implying a punchy yield of 7.4%.While the “beat†was impressive Shaft Sinkers had its fair share of problems, mainly its abandonment from the Eurochem project (its largest ever contract). This was due to adverse ground conditions and with hindsight it may have been too big a jump engineering wise to expand from its South African heartland to freezing parts of Russia. The cess ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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