Neopost H1 profits surge, raises operating margin target
Europe’s largest mailroom equipment firm Neopost (NPOS.PA: Quote, Profile, Research) on Tuesday raised its operating margin forecast for the third time this year as robust sales helped to lift its interim operating profit by a larger-than-expected 20 percent.
Neopost, which last month reported a 9-percent surge in first-half sales, said it now expected its operating profit margin to be above 24 percent for the current fiscal year ending January 31, 2006.
The company, which shares 80 percent of the world market for postal equipment with its larger U.S. rival Pitney Bowes (PBI.N: Quote, Profile, Research), had previously said it was confident it could achieve a margin of 24 percent.
“2005 will be another great year for Neopost,” Chief Executive Jean-Paul Villot said in a statement.
“During the (first-half) period, Neopost recorded a strong growth on all its markets and in all of its businesses,” the statement said. It noted, however, that second-half earnings would not benefit from servicing tied to postal rates changes that had propped up profitability in the first half.
The company also reiterated an annual like-for-like sales growth target of more than 7 percent.
First-half operating profit rose 20.2 percent to 98.9 million euros ($117.9 million), under IFRS accounting rules, making for a margin of 24.4 percent after 22.2 percent in the first half of 2004.
Net profit for the February-July period was up 31.4 percent year on year to 64.5 million euros.
Analysts has expected Neopost’s operating profit to be between 93.5 million and 95 million euros, and had forecast a net profit of between 59.4 million and 60 million euros.
Higher sales, as well as the company’s shift towards high-end products, and control over exchange rate fluctuations all helped boost Neopost’s profitability, the company said.
Neopost shares closed 0.9 percent higher at 83.10 euros on Tuesday. The stock had nearly quadrupled in value in the past 2-1/2 years, supported by strong fundamentals.
