16.03.2012

Bronto bounces back

Finnish truck mounted lift manufacturer Bronto has reported a strong fourth quarter with improved profits and revenues.

Looking at the full year, revenues totalled $109.5 million, up marginally on 2010, in spite of the slow start to the year. Operating income although stronger towards year end still came in 30 percent lower at $6.6 million, due to the slow start to the year combined will a less profitable mix of products.

Order intake for the year was strong at $137.6 million, compared to $99 million in 2010. The backlog as of year end was $80.1 million, compared with 57.3 million at the same point in 2010.

Moving to the fourth quarter order intake was flat, but revenues climbed 20 percent to $41.4 million, while operating income was up almost 12 percent to $4.9 million.

Bronto is a part of Federal Signal which reported revenues of $795.6 million – up 9.5 percent on 2010, while the operating loss shrank from $88.4 million to $13.3 million.

Chief executive Dennis Martin said: "Our strong order trends and healthy order backlog have positioned the company well as we begin 2012. Year-end order backlogs for each of our four business groups are at least 40 percent higher than they were a year ago. We believe these positive order trends, the process improvements we have implemented over the last year at our operating units, reduction of our corporate expenses and economic recovery in our markets will generate profit increases in 2012. In addition, we remain committed to either divesting or improving our under-performing assets before year end."

Vertikal Comment

This is a strong finish to the year for Bronto which is actually doing quite a bit better than the headline numbers might suggest. Federal Signal has yet to publish its full annual report so a detailed analysis is tricky.

The interesting fact from the statement though is the comment that it will divest or improve under-performing assets by year end. The group only has four businesses, all of which appear to have had some good news in the fourth quarter. The ‘basket case’ is Federal Signal Technologies which lost more than $23 million in the fourth quarter alone – single handedly keeping the entire group in the red.

However it saw a massive spike in order intake in the fourth quarter which should bode well, for revenues in 2012, although if the margins are negative this could be disastrous news.

Federal signal has toyed with the idea of selling Bronto off and on for the past two to three years, although it has been the jewel in the corporate crown through most of the recession. But it is also possibly the most saleable business that the group has. It could be an interesting year.