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£90,000 of shares just bought at 300p...pressure is building for another break upwards.
Looking at some figures issued by Finncap this week, the following are relevant comparator sector P/E's for this year and next year: Trifast : 17.5 falling to 17 Electrocomponents : 25.6 falling to 22.7 Diploma : 25.4 falling to 22.7 ACL are on a P/E of 14 falling to 12.9. ACL have a long way to rise from here to catch up. Not only that, ACL have by far the best dividend yield, at 3.1% against the other companies ranging from 1.6%-2.1%.
Finally £3 a share. What a star acl has been! More than 35% in 3 months. For sure, there must be some profit taking soon, but the mid to long term prospects are very good.
Finncap has today issued its quarterly note on the Support Services sector. ACL is one of its 7 favoured picks (amongst the others is RNWH, which I also own), with a Buy and a 339p target price: "Take advantage of the weakness of the pound Buy overseas earners. Our favoured picks are: Acal – 82% of sales are outside the UK, with the largest markets being the Nordics at 22% of sales, Germany at 18% and France at 10%. Acal designs, manufactures and distributes electronic components and assemblies. It has virtually no cross-border trading between the UK and Continental Europe."
Good to see the first buy just now at 300p.
Peel Hunt today reiterate their Buy and 360p target price: Http://investing.thisismoney.co.uk/broker-views/
Finncap's summary in their note from last Wednesday reads as follows FYI - they say Buy with a 339p target: "Strong H2 backed by cash flow, strategy delivering BUY Acal reported FY 2017 adj. EPS up +13% (our forecast: 11%) driven by H2 organic sales growth of +6% (up from a -7% decline in H1), a continued rise in margins, a strong contribution from acquisitions and favourable FX translation. Cash flow was also strong, with pre-exceptional operating cash conversion of 151%. With the year-end order book up +22% CER (+13% organically), the outlook remains positive. We make no changes to our PBT/EPS forecasts and reiterate our view that Acal has the market opportunity and services to build a significantly larger business. Underlying sales accelerating. H2 organic sales grew +6% (+3% in Design & Manufacturing and +9% in the more cyclical Custom Distribution) up from a -7% decline in H1. Restructuring benefiting. £4m annual cost savings are being targeted, with £1.7m realised in FY 2017. The exceptional cost of delivering these was £6.4m (lower than the originally anticipated £8m). Margins continue to rise. Gross margins increased to 32.8% from 32.2% in the year and EBIT margins to 5.9% from 5.7% despite the weakness of sterling, affecting purchase pricing in H2. Overall, we continue to expect progress at the Group EBIT margin level, aided by the cost savings and improved organic growth. Stronger than expected cash flow. Net debt of £30m was better than our forecast £41m. While some of this difference is beneficial timing, we have improved our net debt forecasts and highlight that with our forecast of 0.9x net debt/EBITDA in FY 2018 (falling to 0.4x in FY 2020) enhancing acquisitions remain likely as the group strengthens its market position. £20bn opportunity. The addressable market in niche electronic components is worth £20bn globally. Our view remains that Acal’s true potential value lies in taking advantage of the digital transformation of industry. With its growing expertise in power supplies, fibre optics, wireless and sensors (amongst others) and its design to delivery services, Acal is very well placed to produce significant long-term growth. Modest valuation against the opportunity. FY 2018E P/E of 12.4x represents a 30% discount to our peer group and the 3.2% dividend yield a 47% premium."
Nice £25,000 buy at 286.53p this morning has sent the price up. And ACL have been tipped in today's IC: "The management team at Acal (ACL) have their eyes on acquisitions. Since 2009 the supplier of customised electronics has bought 13 businesses, 10 of which have been in the design and manufacturing division, which contributed three-quarters of group revenue growth during the period. Reported profits were held in check by £6.9m in exceptional items, including a £4.8m restructuring charge for Acal BFi, but underlying pre-tax profit was up 19 per cent to £17.2m. Those acquisitions have not only broadened Acal's commercial offering, but have resulted in a significant increase in cross-selling revenues, a process augmented by the group's latest acquisition Variohm Group, a maker of braking sensors. Meanwhile, the group’s efficiency plan, which saw a layer of management stripped out and some manufacturing moved to cheaper countries like Poland and Sri Lanka, is expected to save £4m annually at a one-off cost of £6.4m. Analysts at Peel Hunt expect pre-tax profits of £20.7m in the year to March 2018 giving an EPS of 21.3, compared to £17.1m and 18.7p in FY2016. IC VIEW: It appears that Acal can afford to continue ahead with its acquisition plans - net debt fell from £38.1m to £30m over the year, giving a gearing ratio of 1.2 times net debt to cash profits, below the company’s 1.5-2 times target range, and operational cash flow was up 66 per cent. Shares are trading around the mid-range of their five year historical valuation at 12 times earnings. Buy."
http://www.proactiveinvestors.co.uk/companies/stocktube/7582/acal-plc-firing-on-all-cylinders-ceo-nick-jefferies-7582.html " Acal PLC 'firing on all cylinders' - CEO Nick Jefferies 09:14 06 Jun 2017 Nick Jefferies, chief executive of Acal Plc (LON:ACL) tells Proactive a strong second half brought full-year results in slightly ahead of expectations. "
Excellent results - 19.2p EPS is ahead of consensus expectations, as is the 8.5p dividend: Http://www.investegate.co.uk/acal-plc--acl-/rns/final-results/201706060700031991H/ - order books are up strongly - acquisitions performing well, with more acquisitions likely - good cash flows - efficiency programme to benefit this year - D&M now up to 52% of sales - this Q1 looking great The outlook says it all: ""As expected, the second half of the year saw accelerating levels of organic growth in sales and orders, and excellent cash flow. This strong momentum has continued into the new financial year which we entered with an order book 22% higher at CER than the prior year, and which is driving further good growth in this first quarter as the order book converts into sales. Our efficiency plan has been implemented, delivering £4m in sustainable annual savings and at a better than anticipated cost of implementation. Variohm Group, acquired in January 2017, is performing very well. Cross-selling activities are underway with a number of exciting opportunities identified and our first design win has been achieved, ahead of plan. This is the seventh consecutive year in which the dividend has increased - an increase of 67% in total, reflecting the transformation of the Group over this period. In the last four years alone, revenues have almost doubled and underlying operating profits quadrupled. We plan to continue this strong rate of progress through further organic growth and high quality acquisitions over the next five years."
I'm in, and following. But only quite recently - up just 8% - and no great wisdom to add. Your info and comments are very helpful though, to me and I hope a load of others (the more the merrier), so please don't stop! Thanks.
with buying at 282p and 283p. No-one else interested here yet then?! No doubt the share price will have to increase another 25% before others finally latch on.
..and again this afternoon following some encouraging AT (institutional) trade buying. Looking set for new recent highs now.
Good to see a buy at 266.75p first thing this morning.
A recent tip for ACL here - it offers "high growth prospects as well as a rising income return": Http://www.acal.co.uk/acal/uploads/featuredpress/the-motley-fool-acal-dividend-growth-potential.pdf
The IC recently tipped ACL as a Buy, and the company have helpfully copied the tip onto their web site. They note historic 18.7p EPS rising to 21.3p EPS this year: Http://www.acal.co.uk/acal/uploads/featuredpress/investors-chronicle-21-april-2017.pdf
Encouraging to see a broad positive consensus from the various covering analysts. Finncap say Buy with a 339p target, Peel Hunt say Buy with a 315p target and Numis recently upgraded to a Buy with a 305p target.
on the pullback. Very healthy volumes today, and looking encouraging online. The results aren't far away on 6th June, so we should see a decent run-up until then given the very positive trading statement and cheap fundamentals.
and continuing to move up again today - the mid-price is up to 6.375p to 273.375p. Remains very good value imho.
Breaking upwards now to new recent highs - hopefully up to 280p soon for starters.
Finncap in their note after last week's trading update said Buy and reiterated their 339p price target, so there's plenty of upside. They summarised: "Stronger H2 and brighter outlook BUY In a positive year end statement Acal has detailed that FY17 results are anticipated to be slightly ahead of management’s expectations. H2 sales were up +11% on last year at constant exchange rates and +6% organically. This is significantly ahead of the -7% organic decline in sales seen in H1. Order intake in Q4 was also strong growing +16% at constant exchange rates and +13% organically, positioning the group well for further growth. We make no changes to our forecasts and target price. With the shares valued at only 10x March 2018 EPS and with a dividend yield of 3.8% we reiterate our Buy recommendation." I also liked this: "Differentiated and niched. Acal supplies customised and high value-add products into market niches. This avoids the pricing pressure in commodity and consumer markets and supports the potential for a continued rise in margins." And: "Digital transformation is a major opportunity. Acal’s true potential value lies in taking advantage of the digital transformation of industry. With its growing expertise in power supplies, fibre optics, wireless and sensors (amongst others) and its design to delivery services, Acal is very well placed to produce significant long-term growth. Significant discount to peers. Acal is valued at a 42% discount to peers on a P/E basis, despite our forecast of significantly faster growth."
Http://www.edisoninvestmentresearch.com/research/report/acal35/preview/ Strong trading, EPS upgrades, cheap fundamentals, more acquisitions likely, sound Balance Sheet, sizeable dividend etc: Conclusion: "Valuation: D&M progress to drive upside Despite a 17% pick-up from the recent low of 211.5p, the stock continues to trade at a c 30% discount to the peer group average on EV/EBITDA and P/E multiples. The positive trading update combined with good progress in the strategy to grow the Design & Manufacturing side of the business provide confidence in both the near-term and longer-term outlook for the company. Continued growth in the proportion of revenue generated from design and manufacturing should support operating margin expansion, and should help to reduce the valuation discount. The stock is also supported by a dividend yield above 3%"
for the first time - they look cheap imo. More later.
About time.
Do we know whether today's 450000 trade was a buy or sell ? In any case ACL's sp price hasn't done much lately .Its been hovering at around the 220 level for a while!