Legend jumps on strong profit

Legend Corporation closed within striking distance of its more than one-year high after management commented on its strong start to the current financial year at its AGM today.

Legend Corporation (LGD) closed within striking distance of its more than one-year high after management commented on its strong start to the current financial year at its annual general meeting today.

The circuit and memory chip maker for industrial products jumped 1 cent, or 3%, to 34.5 cents as investors welcomed news that pre-tax profit for the four months to end October is 17% higher than the same time last year.

Soft demand for its products before the federal election in September has given way to a modest recovery, and management is anticipating the uptrend to continue thanks to an anticipated pickup in dwelling construction in the new calendar year.

Shareholders will be keeping their fingers tightly crossed as analysts have pencilled in a 20.9% increase in pre-tax profit to $11.5 million for 2013-14.

Legend’s circuits are used across a wide range of industries including lighting, automotive, mining and consumer electrical.

However, management warned that it is expecting a $235,000 tax bill relating to the closure of some of its international operations.

Legend hit 35 cents last Friday, which is its highest level since August 24 last year.

The stock is part of the Uncapped 100 and is trading on an estimated 2013-14 price-earnings of 7.5 times with a 5.2% yield.