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Hayward Tyler boosts profits but cautions on potential EU vote impact

Engineer's pre-tax trading profit rose 18% to £5.1mln on a 27% increase in revenue to £61.6mln
Hayward Tyler specialises in motors and pumps
The group lifted its dividend per share by 5% to 1.38p

Engineer Hayward Tyler Group PLC (LON:HAYT) reported higher profits but cautioned that EU referendum chaos could have an impact on its business.

Hayward said pre-tax trading profit rose 18% to £5.1mln on a 27% increase in revenue to £61.6mln. The group lifted its dividend per share by 5% to 1.38p.

Chief executive Ewan Lloyd-Baker said: "The group is well-placed to achieve the board's growth ambitions.

"Provided the recent political and economic uncertainty does not dramatically affect all our end markets, the board remains confident in the prospects for the business."

The group said its eponymous Hayward Tyler business achieved "a credible performance" and was "set to strengthen further."

It said the revitalisation of its newly acquired Peter Brotherhood (PB) steam turbine business was already achieving good progress with the brand resurrected and new orders won.

It spent £10.1mln on buying PB in October 2015 and invested £9.8mln in a "centre of excellence".

Shares in Hayward rose 1p, or 1.2%, to 84.5p in early London trading.

FinnCap said that overall, the results marked a step-change from the five-month inclusion of PB, albeit they were marginally lower than forecast.

The house broker said it was not changing its 2017 profit forecasts, with the expectation that profits will be second-half weighted due to the timing of orders.

It added: "The shares have dipped in value and we believe they are now excellent value.

"We maintain our 113p price target, seeing significant upside on a two-to-three year view."

Another broker, Cantor Fitzgerald, said Hayward's pre-tax profit was in line with its forecasts.

Cantor, which has a 'buy' rating and a 120p target price on the stock, said: "Hayward has made excellent progress in FY2016 and management is clearly delivering against its strategy."

--- Updates with broker comment, share price ---

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February 20 2017

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