Trading substantially north of 60p a year ago, shares in Armour, the consumer electronics company focused on the in-car communications and entertainment markets, are looking unloved despite recent positive business progression.

Recent derating of the shares reflects worries about the tougher consumer environment, but having unveiled solid like-for-like growth at the interim, the management will be hoping the company meets with more amorous sentiment from here on in.

For the six months to 29 February, pre-tax profits edged up by 9% to £2.6m, on a rise in revenue to more than £30m (2007: £28.4m), with Armour generating £1.6m of cash, ahead of management’s expectations. Chief executive George Dexter attributed good organic growth to ongoing investment in brands, sales channels and the group’s extensive product range.

Recent highlights from Armour Automotive, European market leader in the design and supply of everything from mobile antennas to MP3 players (supplying its wares to Halfords, Carphone Warehouse and BMW among others), include the successful launch of a range of in-car Bluetooth music-streaming and hands-free kits, as well as a raft of new business wins.

Meanwhile, Armour Home, the distributor of hi-fi and home cinema systems to customers including Tesco, John Lewis and several large house-builders, had a good first six months with ‘all our core brands and channels to market’ exhibiting steady growth.

Forecasts in the market for the full year point to profits acceleration from £4.5m to £4.9m and in earnings from 4.7p to 5.2p. Outperforming peers in a tough market, the shares look deeply undervalued on a prospective price-to-earnings ratio of 6.6.

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Armour Group	AIM	£5.48m	8.00p	0.00p
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