Laird Will Close Handset-Antenna Unit, Maintains Forecasts
Stock Chart for Laird PLC (LRD)
Laird makes antennas for Nokia Oyj (NOK1V), once its biggest customer. The closure won’t affect its full-year forecasts as demand for other products is improving, the London-based company said in a Regulatory News Service statement today.
The announcement follows Cooper Industries’ statement yesterday that Laird turned down a 493 million-pound ($798 million) offer. Laird said today it’s more diversified than previously. In March, it said last year’s revenue from Nokia dropped to 19 percent, from 40 percent in 2009, and today it said that contribution will be minimal now.
“This decisive action will allow us to focus better on the rest of our businesses and to concentrate on continuing to strengthen our leading positions in high-growth markets,” Laird said in the statement.
Laird rose 8.4 pence, or 4.5 percent, to 197.3 pence in London, after rising the most in more than two decades yesterday. The shares have risen 14 percent so far this year, giving the company a market value of 525.4 million pounds.
Michael Blogg, an analyst at Arbuthnot Securities, said shareholders would probably be happy with an offer close to Cooper’s 185 pence per share, citing Laird’s “poor track record” and its business as a maker of parts for wireless and electronics products.
‘Not Particularly Attractive’
“This is not a particularly attractive business to be in, even if the rest of the portfolio, after exiting handset antennas, is currently in a growth phase,” he said in a note to investors. He has no recommendation on the stock. “An auction must be the best hope for achieving greater value.”
Laird said it will take a charge to cover costs of closing the phone-antenna unit, yet the closure and sale of assets and inventory will add about 20 million pounds to earnings. The unit broke even in the first quarter and sales declined after that, the company said.
Laird also said its second-quarter comparable sales, excluding handset antennas, will probably be higher than this year’s first quarter and last year’s second quarter.
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