The shares in LPA jumped 21% to 36p after the electronic component maker and distributor made its long-awaited return to the black. The company moved from a loss of £208,000 to pre-tax profits of £143,000 on 7% increased revenues of £13.5m for the year to September. LPA makes products for the rail, infrastructure and aerospace and defence industries. Chief executive Peter Pollock announced that Britain's railway industry, which, in his words, has been 'in chaos' for the past few years, is now stabilising. LPA supplies auxiliary power systems, inter-vehicle electrical connection systems and lighting systems to the railway systems and is developing its relationship with major European train producers as well as chasing contracts in Asia, especially in new markets China and Taiwan. In the infrastructure arena it has enjoyed success in some niches such as ground power systems and it is looking to exploit the fragmented and nationalistic characteristics of the UK aerospace industry. Admitting there are obstacles to growth, Pollock reported the company's order book is up 47%. Gearing fell 155 to 66.3% and investors will be pleased that dividends, which were resumed at the interim stage, increased 80% in total for the year to 0.45p a share. House broker Teather & Greenwood forecasts pre-tax profits will improve to £480,000 for 2005. Compared to the sector average, LPA's shares look very undervalued. Buy.