And it looks as if this trend is going to continue. According to the results released today by the company for the six months ending 30 June, group revenue grew 2% year-on-year at constant currency and underlying profit before tax rose 4%. Including the impact of currency, revenue exploded by 30%, and underlying earnings per share grew 25% allowing the company to announce a 17% increase in its interim dividend. 

On a statutory basis, profit before tax rose 130% year-on-year and basic earnings per share increased 113% year-on-year. The one bad mark against the company for the period is a 32% increase in net debt to £190m, but on a pro forma basis (after adjusting for several acquisitions), leverage actually declined year-on-year. For the company’s full fiscal year, City analysts are expecting Tyman to report earnings per share growth of 26.5% and the shares are projected to yield 3.5%, although these forecasts could be on track for substantial revisions higher following today’s news. 

For example, analysts were only expecting a 10% increase in the company’s dividend payout. Based on current city expectations, shares in the building materials producer are trading at a forward P/E of 12.2, which looks cheap compared to the company’s current growth rate, but looks expensive if you believe the UK homebuilding market is about to collapse.

Diversification 

Tyman’s management is well aware of this risk and is working hard to diversify the group’s interests into North America and Europe, a process which is already yielding results as today’s numbers reveal. If management can continue to acquire attractive businesses at fair valuations and integrate successfully, as they have done over the past five years, then Tyman could have a huge runway for growth in front of it. It might pay off to invest in this growth story.

Cash cow

Science (LSE: SAG) looks to be another boring company with enormous potential. It provides scientific consultancy services and growth has been slow at the group. However, cash generation is strong, and management is working for shareholders by returning this cash to investors via buybacks. 

At the end of June 2017, the company had gross cash of £26.3m, up from £17.2m in the year ago period. Profit before tax for the period was £2.3m, and revenue for the half was £18m, up from £17.7m last year. 

With a healthy balance sheet, management is also looking for acquisition opportunities, and these could significantly increase the group’s growth potential. With this being the case, even though the shares look expensive trading at a forward P/E of 17.5, it’s clear Science can produce steady returns for investors going forward through both cash returns and bolt-on acquisitions.

The post Tyman plc is a stock I’d buy and hold forever appeared first on The Twelfth Magpie.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In Continental Europe, Headlam benefitted from a positive currency translation. This meant that combined revenues rose by 8.9% and while this is a positive, weak sterling also produces a negative for the company. That’s because it causes the cost to Headlam of residential floor coverings to increase by an average of 6%. They’re imported from Belgium and the Netherlands and it means that Headlam will increase its selling prices by a similar amount over the next month.

Looking ahead, Headlam is forecast to increase its bottom line by 5% next year and with it trading on a price-to-earnings (P/E) ratio of 12.9, it seems to be fairly priced. Its yield of 4.8% from a dividend that’s covered over 1.5 times by profit remains its big draw, meaning it holds appeal for income-seeking investors.

Strong start

Also reporting today was NewRiver Retail (LSE: NRR), with the real estate investment trust (REIT) recording a strong start to the year. Its first quarter was busy with it improving its occupancy to 97% following 90 leasing events having been completed during the quarter. Furthermore, lease length and footfall were also improved, with NewRiver having made good progress on its Co-operative convenience store development programme.

The strong start to the year has allowed NewRiver to increase dividends by 11% to 5p per share. This puts the company on a yield of 6.8%, which is clearly among the higher yielding stocks on the UK index. As such, it has appeal for income-seeking investors at a time when interest rate cuts are being mooted.

However, with dividends being covered just 1.06 times by profit and the outlook for the UK commercial property market being uncertain to say the least, it may be prudent to await further news flow before buying a slice of NewRiver Retail.

Rising revenue

Meanwhile, Science Group (LSE: SAG) also reported today. The science and technology consulting company’s first-half performance was in line with management expectations, with revenue rising by 25.5% to £17.7m and adjusted operating profit being marginally higher at £2.5m. Encouragingly, Science Group’s operating cash flow remained strong, rising to £5.3m from £3.3m in the same period of the previous year, thanks in part to a VAT rebate of £1.5m in relation to a property purchase in 2015.

Looking ahead, Science Group is expected to increase its earnings by 29% this year and by a further 16% next year. This puts it on a price-to-earnings growth (PEG) ratio of just 0.8, which indicates that now could be a good time to buy it.

The post Will Science Group plc, NewRiver Retail Limited and Headlam Group plc soar after today’s updates? appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Headlam Group. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.