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BPI British Polythene industries, featured here last week, breaking out and heading towards an all time high. My SP target is broker Investech's target of 800p initially. http://content.screencast.com/users/mickkipper/folders/Default/media/d2e087da-bedc-4ea0-b0fe-5967e211f68f/bpi%202.jpg
Tipped by the Investors Chronicle on Friday.
Basic Materials Over the last week, British Polythene Industries (BPI) has jumped in the StockRanks by 15 points to 91. Aquarius Platinum (AQP), on the other hand, has dropped by 22 points and now has a StockRank of 36. British Polythene Industries OkUzHUY2U10a56YBNIE__OS2daMblM5LjqjMArzO British Polythene Industries (BPI) is a producer of polythene film in Europe. The company faced problems in the first half of 2014, as bad weather hurt demand for agricultural films. The company also faced setbacks in North America, as business was negatively impacted by the late delivery of replacement machinery. Revenues were actually lower in the first quarter of 2014 (£281m) as compared to the first quarter of 2013 (£282). This could help to explain why the company looks cheap, with a PE ratio of just 12.5, a P/S ratio of 0.3 and an overall ValueRank of 86. Nevertheless, some of the company's raw material costs are falling and the management team reports that 'the order books are sound'. Perhaps these factors are causing the brokers to become increasingly optimistic about the firm. Brokers believe it is a 'Strong Buy' and analysts are upping the numbers. Since February, EPS estimates have risen from £58.05p to £61.73. Over the last month, the company has beaten the market by 1.5% and the firm's overall MomentumRank is 81 - in the top quintile of the market. - See more at: http://www.stockopedia.com/content/stockranks-upgrades-and-downgrades-october-28th-87283/#sthash.3b9dfZWc.dpuf
Worth reading this report from Edison 'The business is still performing well overall and returns from new investment are still to come, so we believe that notwithstanding a slightly subdued end to 2013, there remains good forward momentum and a forward P/E ratio of 11.1x is consistent with a growth outlook.' http://www.edisoninvestmentresearch.com/serve_pdf.php?d=researchreports&f=BPI231213update.pdf&first_name=%Member:CustomField5%&last_name=%Member:CustomField6%&company=%Member:CustomField7%&email=%Member:Email%
This is a greatly underated share and still very cheap, love the way it slowly and steadily just keeps ticking up. Good share for anyone's portfolio
Valuation: Value rating with dividend growth BPIs share price ran up to 410p in mid-October – with no discernibly different macro trends save for oil prices being sustained at lower levels – and has retraced by almost 10% since then. At the 372p level (and on unchanged forecasts) we have previously noted healthy cover ratios and the expectation of progression from a reasonable dividend base. These comments still hold pending a recovering volume scenario, which would further strengthen the buy case.
http://www.edisoninvestmentresearch.co.uk/researchreports/BPI121112Update.pdf
Valuation: Earnings stability and dividend growth Profitability has shown greater stability than immediate polymer input costs and underlying feedstock prices, though sentiment still seems to track these macro trends. A more robust economic growth picture would undoubtedly be favourable for BPI and others, although the near-term outlook remains fairly mixed and the rating (P/E 7.2x, EBITDA 4.2x) reflects a flat current-year earnings profile. Business investment should enhance BPI’s ability to service an upturn when it comes but, for now, the rating should appeal to value investors who can also take comfort from healthy levels of interest and dividend cover with a progressive payout.
In North America, operating profit fell from £0.21m to £0.17m, while tonnes sold totalled 5,500, up 200 tonnes. The decrease in profits was blamed on power outages, low priced offshore competition and a lack of demand for horticultural products. In total, agricultural sales were 12% ahead of 2011 mainly due to the additional silage stretchwrap sales, while horticultural sales were over 20% down due to poor demand from the growers. "Margins suffered due to low price competition particularly from the Far East where polymer prices were significantly lower throughout most of the period. The second half performance will be impacted by the severe drought in mid western USA but we should see improved demand from the horticulture and western Canada grain markets," the group said.
"As always, the second half is difficult to call at this stage, as in this manufacturing-come-service industry the order visibility is never very long-term. We are, however, as well-placed as we were at this time last year, and we are confident that the business is capable of delivering a similar result." "The second half looks challenging as our suppliers increase raw material prices and demand remains uncertain. However, with over 70% of the group sales in more resilient sectors, actions to improve the business and progress with new products, the group should deliver acceptable results." Total energy costs in the period increased by more than 10% per tonne, with the UK cost per tonne remaining significantly higher than Europe. Regionally, in the UK and Ireland, operating profit rose from £5.5m to £6.2m, despite a decrease in volumes sold, from 108,900 tonnes to 102,900 tonnes due to poor demand from the industrial and construction sectors. The construction industry continues to have a difficult time and sales of building film and packaging to the sector were down 10%. Volume sales of shrink film were steady despite poor weather conditions for the UK soft drinks industry but demand from the converter sector was subdued, while sales of silage stretchwrap were in line with 2011 and current weather conditions should ensure that demand continues into the second half. In Europe, operating profit dropped from £9.3m to £8.4m (€10.7m to €10.2m) on the back of a reduced volume of sales from 42,800 to 40,700. Sales volumes for the three sites in Europe fell 5% due to lower volumes from the industrial and construction sectors and weather conditions reducing volumes in animal feed and salt. Silage products grew by over 40%, while low opening stocks combined with good growing conditions in the main markets contributed to growth in the firm's standard products.
Manufacturing firm British Polythene Industries (BPI) delivered first-half results that were in line with expectations and broadly similar to the corresponding period in 2011, despite a seven per cent decline in sales. This drop in revenue, from £293.0m to £273.1m, was the result of a five per cent reduction in overall volume, an unfavourable translation of European sales into sterling and contractual price reductions for certain products in response to lower input costs for polymer during the second quarter. Despite this, operating profit decreased by just one per cent to £14.8m from £15.0m in the same period the previous year. Pre-tax profit was lower at £13.3m compared to £15.1m, partly as a result of unfavourable currency translation. Diluted earnings per share before net restructuring were 32.38p (2011: 33.86p) The company is undergoing a restructuring process, which includes reducing its borrowings, to overcome these and other trading difficulties, and as a reflection of this progress, has decided to increase the interim dividend by five per cent, or 0.2p, to 4.2p. Chairman Cameron McLatchie said: "We had previously indicated that our expectations for the half-year results, at the operating level, were for a performance broadly similar to the corresponding period in 2011 and we are pleased to report that this has been achieved.
Valuation: Value rating, estimates unchanged BPI has comfortably outperformed the market in the last quarter though the P/E ratio remains a very modest 6.6x for the current year. An EBITDA multiple of 4.1x (adjusting for pensions cash) confirms the value rating picture. Current market headwinds are reflected in the flat FY12 earnings profile and we have made no estimate changes. More broadly based sector progress and/or sustained lower polymer prices may be required to get earnings moving ahead more rapidly. Low multiples and a reasonable yield (of 3.8%, 4x covered by earnings) offer a decent entry point ahead of this
Investec has maintained its buy recommendation on British Polythene Industries (BPI) after the manufacturing firm revealed this morning that full-year results would come in at the top end of expectations. The broker notes that trading has remained consistent with that described in the group's November trading update. "The group has benefited from structural changes effected in the UK in recent years and a strong European performance," said analyst John Lawson.
PRE CLOSE PERIOD TRADING UPDATE 20 December 2011 Prior to entering the close period ahead of the preliminary results for the year to 31 December 2011, British Polythene Industries PLC has issued an update on current trading. "Trading remains consistent with that described in our Interim Management Statement of 11 November. There is subdued demand from many industrial customers and, at best, overall flat volumes from the retail sector. We currently expect total volumes for 2011 to be marginally below 2010. Raw material costs continue to slowly soften, no doubt assisted by poor demand and an increase in the volumes of imported polymer from new sources in the Middle East. Despite this difficult trading environment, we expect our results for 2011 to be at the top end of market expectations, as we benefit from the structural changes effected in recent years in the UK, and an excellent performance from our European business. The preliminary results for the year ended 31 December 2011 will be announced on 5 March 2012."
http://www.investegate.co.uk/Article.aspx?id=201112200700082643U
Commenting on the results Cameron McLatchie, Chairman of BPI, said: "2010 showed evidence of further improvement in the underlying performance of our business. Despite increases in raw material costs of some £45 million, operating profits were only £1.1 million less than 2009. The Board is encouraged by this very satisfactory performance in difficult circumstances and are recommending an increase in the dividend for the year. We are confident that the actions that have been taken over the last few years have put our business in a better position to weather the current economic climate and also to be able to take advantage of any upturn in the economy. 2011 will not be easy, but we have made a good start."
Highlights · Sales increased 12.5% to £478m (2009: £425m) · Operating profit before net restructuring of £17.9 million (2009: £19.0m) impacted by substantial increase in raw material costs · Diluted earnings per share, before net restructuring, of 38.31p (2009: 38.60p). Diluted earnings per share of 51.07p (2009: 30.36p) · Profit before tax up to £16.7m (2009: 11.8m) · Net borrowings reduced by £6.6m to £45.6m · Final dividend increased to 7.85p (2009: 7.5p), making a total dividend for the year of 11.5p (2009: 11.0p) · Good start to the year although 2011 will not be easy
http://www.investegate.co.uk/Article.aspx?id=201103070700204019C
Thought I might find you on here today... a nice response to some good news. It will be interesting to see exactly what these excellent figures are - although the management certainly seems to be optimistic of a good 2009. I'm hoping for these to make steady progress for the next three weeks up until the July dividend. Fingers crossed.
Might at long last be breaking free from its shackles!
Thanks for the post, but most of directors have been buying lately. I dont suppose you know where i can find an updo date list of major holdings in BPI do you ? Has the MD got a smile on his face when you last saw him or has he rapidly aged ( lol ). Any news on factory closures ? Altb Larney
Hi larney Bought in again this morning. This is a very good company with a strong and loyal workforce, a great management team and has a good history of dividend. It is the largest manufacturer in Europe and a good global perspective, it also addresses lots of green issues, being involved in and investing in recycling. I must state that I know the MD and his family and have done for 40 years. The MD is a man of supreme integrity and I believe that he buys this share when it's up and when it's down, so please do not rely on director's buys as an indicator. DYOR BPI has moved up and down on small volume and I believe that it under priced at the moment. BW to all
Sp up 14% on only 13k shares traded. In my opinion mm looking for a reason to mark this up.