Below Expectations - ARM Cement released FY13 results marking 8.7%y/y growth in EPS to KES 2.72 – 15.5% below forecast. Despite FY13 being the first full year of production at Dar es Salaam’s 0.75mtpa grinding plant, group revenue growth slowed to 24.4%y/y vs. 39.4%y/y in FY12, as cement sales growth slipped to 31%y/y vs. 64%y/y - missing our forecast 35.6%y/y. Cement sales now represent 86% of group revenue up from 80.5% in FY12. Management expects the 0.75mtpa grinding and 1.5mtpa clinker Tanga plant to be operational in 2H14 (this is a revision from earlier guidance of 1Q14). EBITDA margin dipped further (-180bp y/y) to an all time low of 21.5%. Management attributed continued margin pressure to increased use of imported clinker to meet production demands of expanded grinding capacity (management expects quick margin improvement following commissioning of the Tanga clinker line). PBT increased 13.1% to KES 2.0bn -12.3% below forecast while effective tax increased to 32.6% (management expects to book investment tax credits upon completion of the Tanga project). Total CAPEX increased from KES 2.72bn to just over KES 4.0bn (forecast 3.50bn). Total net debt increased to KES 14.26bn from KES 12.4bn in FY12.

Upon completion of the Tanga project, management will be eyeing to set up a new green-field clinker plant in Kenya. As from 2015 to 2020, management will be looking to double grinding capacity to 5.0mtpa. ARM currently trades as 33x PE and 19.3x EV/EBITDA. (Company filing, Standard Investment Bank)

PER of 32.85 and Div Yield of 0.67% (current price is 90/-), in the Cement and mining industry. The directors seem also to be very mean and the stock price is unreasonably high to me. AM IGNORING THIS! Any other point of view? Whats this am not seeing? Anyone?

Below 50/-, is what i can give.

It's not advisable to follow your brokers recommendation.

Make your own research and dont let your brokers recommendation influence you.

A good example is this share.FIB have been recommending it,for the last 1 year, but its share price movement speaks different