Its manufacturing arm – which caters primarily to the export market – continued to register strong growth for the first quarter of 2014 financial year ending Feb.
It has focused much effort over the last few years on growing its manufacturing arm, expanding local capacity with a brand new stainless steel prices and fittings plant in Johor and acquiring UK based Nautic Steels, which manufactures higher value niche market products. Its strategy pays off.
Its prospects remain bright for the foreseeable future. Domestic demand for the company’s pipes, fittings and flow control products has picked up speed again with he resumption of contracts flow now that that the general election is over.
The oil and gas sector is also Pantech’s single largest customer group, accounting for some three quarters of the company’s total sales.
Pantech is upbeat on Nautic’s prospects and believes it to be one of the key drivers for growth over the next few years from 2013.
With no major capex in the plans – barring any new acquisition – expect gearing to gradually decline over the next three years from July 2013. Gearing stood at 41% at end 1QFY2014.
Coupled with stronger earnings and cash flow, this means Pantech has room to increase dividends.
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