Companies: MRX   

Birmingham-based engineer Metalrax reported higher sales and profits for the year to December, buoyed by a stronger second half performance. Pre-tax profits crept up from £12m to £12.1m on turnover of £104.5m (£104.3m) and the final dividend was held at 3.75p (for an upheld total payout of 5.4p). Chief executive Richard Arbuthnot said the results reflected reorganisation in a 'never-endingly' tough market, as well as the maximisation of efficiencies in the face of 'shocking' hikes in input costs such as steel, energy and plastic. Metalrax is also fending off low cost competition from the Far East. Encouragingly, 2005 has started with the majority of Metalrax's order books at higher levels than last year. And recent acquisition Cooper Coated Coil is integrating well - the West Bromwich outfit supplies specialised coated metal products to a wide range of industries and is already an existing supplier to Metalrax. As well as helping expansion into new products and markets the deal also brings economies of scale to the coil coating operations. The 5.4p payout for 2004 means the shares yield 6.3% and Arbuthnot is cautiously 'looking for growth' in 2005, even though the oil price will probably send the plastic price further north. While Metalrax might not be the raciest stock around, and passing on input costs is proving tough, this is a well-managed venture with good income attractions. We now feel the shares are still worth holding.