Account Gamble
Decides on Doncaster
John Bull
On December 12, Daniel Doncaster announces its interim results. From what I hear these will provide the market with good cause for cheer and will point to Dorcaster being in line for pre-tax profits of around £1.6 million this year. And further ahead there is every reason to be optimistic about prospects.
Doncaster did not take long to get over the trauma of the Rolls-Royce crash and after making a loss of £420,000 in 1971 profits last year were £1.5 million. Now the group is particularly favourably placed from the increased scale of activity in the aircraft industry and the likelihood of an upturn in the commercial vehicle market.
Doncaster is involved in the aeroindustry as it does the forging for the Spey engines, three of which power each Trident. And not many people will need to be reminded of the breakthrough that has been achieved by the sale of these aircraft to Red China. Also Doncaster stands well placed as a beneficiary from the Concorde programme as it forges compressor and turbine blading throughout the engine in titanium and the latest heat resisting alloys as well as doing other work for the engine.
In view of the increased work that Doncaster will be undertaking it is satisfactory to note that liquidity has improved partly as a result of a El million debenture over a year ago. And the chairman recently said that he is confident he can deal with various projects on hand without recourse to outside finance.
That was in July, incidentally, since when Doncaster has signed two agency agreements at the Europort . exhibition which gives ship operator customers of Doncaster's Moorside assurance of world wide services for the company's hydraulic equipment. The group also expects to double the sales •of nuts and ring jacks, bolts and dowels. It has strengthened its ties with the Benelux countries by signing an agreement with the Rotterdam dockyard just a few weeks ago.
Apart from organic growth Doncaster should be helped by the acquisition of John Brereton, Manchester-based supplier of components to the gas, oil, chemical and process industry. The machining, stocking and distribution of Brereton should fit in well with Doncaster's know-how in forging and rolling operations.
All in all Doncaster looks a share well , placed at the moment to take full advantage of the improving economy. At 82ip on a PE ratio of 9.7 there is plenty to go for.
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