Trading update & Upgrade in broker forecasts.

Trading Update 8th April.

Elektron updated the market on year ended Jan 2010 trading and gave an indication of current trading.

Key points:

a. Due to increased order intake in the final weeks of the financial year the company has seen a signicant increase in profitability pre exceptional costs.

b. Availabe for sale financial assets will have increased £800,000 due to a revaluation.

c. "Elektron is pleased to report that the upward order trend has continued in the first two months of the current financial year giving the Board added confidence in at least meeting market expectations for 2010/11. Queensgate, the nanomeasurement specialist which is part of Elektron Ventures, is performing particularly well."

Finncap Brokers Upgrade:

Key Points:

a. Finncap have upgraded turnover from £29.6 million to £30.3 million and increased EBITDA to £2.8 million. EPS has been upgraded from 1.17 to 1.85 basic eps.

b. Price target increased to 25p from 15p. Finncap indicated the likely hood of further upgrades.

Comments:

Turnover and profits started to bounce back from last Summer onwards and the company finished the year very strong. It looks to me like the strong finish to the latter half of the year has continued on an upward trend into the current year. We are already looking for £3 million pre tax profits on the current year I think they will be comfortably exceeded. As turnover rises more profits fall to the bottom line with rising margins.

Finncap our brokers have already upgraded our forecasts a number of times last year I think they will have to again on the current years forecast earnings.

The brokers have indicated excellent trading in the technology division. That group comprises Bulgin, Arcolectric, Sifam. The bulgin subsidiary is a highly profitable business now investors should not underestimate the increase in trading on profits. What caught me out was the increase in business from Queensgate Instruments that operation is capable of good profits going forward.

The share price has increased over 140% from its low point the last 3 months and with the market cap still under £16 million at the current mid price of 18.25p the share price could double again well before the end of the year. The current multiple is far too low at present on prospects.