Three score percent is a big number and even bigger when it measures ‘alcohol by volume’ i.e. in science 60% ABV equates to 105 proof. The latter number is also the suffix for Glenfaclas’s best-in-class malt whisky; and the eponymous distillery remains in founding family hands. Titon has distilled its own 60 percenter in H1 profits and its founder still sits on the Board: absolute best value.

  • Results: pre-tax profits in the half year to 31 March 2017 rose some 60% to £1.2 million (and this was post a £234,000 restructuring debit) – on revenue some 30% ahead at just over £14 million. EPS increased 34% after a higher tax rate and the interim dividend was raised 20% to 1.50 pence per share. South Korea, the Group’s largest net contributor did very well indeed.
  • Metrics: EBITDA margins in H1 were bottled at 8.3% (2016: 7.6%) and adjusted RONA, ROCE and Capital Turn corked 19.0%, 13.8% and 2.3x respectively. Liquidity is peerless, too, with a Quick Ratio of 1.94; plus improved net cash at £2.71 million, which is up from £2.46 million.
  • Forecasts: such was the strength of H1, we have triple-distilled our forecasts, too, and we now expect fiscal 2017 to pour a pre-tax profit measure very close to our previous 2019 number. That said, 2017’s full year EPS will be singularly impacted by a step change in the tax rate due to the geography of profit.
  • Risks: the Chairman spoke of both Brexit and the imminent General Election creating “degrees of uncertainty” in the UK. “Nonetheless, we expect our core UK businesses to continue to grow”. Despite the headlines, too, and the attendant Kim Jong-un, South Korea is set for “another strong performance” with support from the US and continental Europe. In the Group’s core product market, too, the provision of quality indoor air is a major health consideration
  • ABV: The unique Hardman UK Building Materials Sector comprises 22 companies with a market value of £8.0 billion and a valuation of 10.1x EV/EBITDA on a trailing 12 month basis. Titon is seventh cheapest at 6.8x despite an oak-aged Total Shareholder Return of 76.7% over 12 months, which is also the Sector’s best (i.e. the Sector average TSR over the past year is 29%).


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