Companies: MTG   

Metnor's share price performance has been a big disappointment over recent years, as its conflicting messages on trading have tired investors seeking more consistent progress. The group has built up a range of businesses, mainly around the North-East of England, since coming to Aim in 1998 as a galvanising specialist. This part remains, but it is the mechanical and electrical contracting subsidiary Norstead that has been doing best in recent years. Results for the year to last December were not overly impressive, with pre-tax profits falling from £6.1m to £5.2m and earnings per share dropping from 27.6p to 23.7p. Margins dropped dramatically as turnover increased from £48.9m to £57.4m over the same period. There are many positives though. For a start, the business remains highly profitable, and the cut in margins was only because the company was forced to diversify into less profitable work because telecommunications contracts, predictably, dried up. It also has a lot of cash - £7.7m at the end of 2002, with short-term debt balanced by money owed from customers. Metnor's galvanising businesses in Chesterfield and Middlesbrough are operating at close to capacity while the general construction market in its core regions remains strong. Growth is expected to resume this year, with forecasts putting pre-tax profits at £5.5m and EPS at 25p.