Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Trading view states results due 7 Jun 22.
Could I ask why you think the results are due on Monday? I haven't seen anything announced, and last year they were announced at the end of the month.
So with the 2 bank holidays due today is the last opportunity to buy before the results on Monday .
I am betting on a good performance especially with a substantial drop in the pension deficit.
Current trading has been flagged as difficult so no surprises there but for a company with an £18 million valuation the profits will be solid. I’m excited about all the new contracts !!!
Or it might just prove that in the short term the stock market is a voting machine, and Carclo isn’t the story of the day. I have been buying at these lower levels, and happy to hold for medium and longer term gains. ATB
Nick Saunders has bought at prices from 14p up to 52p. Most recent was January at 33p. Just proves that inside knowledge sometimes counts for little. Its all a bit of a CAR crash just now. Some news might help!
The CEO also bought at 14p.
Small volumes. Sure could do with some good news. I don't think the directors who bought at 51.80p last year will be too happy at present price
Seems like something is brewing and somebody knows of news pending.
"could" lol
tp 12p for oversold bounce
Medical plastic demand is expected to increase 8% year on year for some time which explains the purchase of new machinery. The prospects for the cable side look quite good given that a lot of planes are sitting in Russia. Possible bids? At this lowly price (and with a weakening £) there is a remote possibility and the longer the sp remains low increases the likelihood..
It may be a complete shot in the dark of mine.......but several times over my 40 years of stock market investing, a share I held with solid prospects, that seemed to go no where....and actually went down in value for no obvious reason, suddenly received a takeover offer!!! This could be a prime time to sell this company. I'm not ramping, but it is just a thought.
While I have always felt the pension deficit was of no interest a lot of people have harped on about the £50 million shortfall.
With the dramatic change in corporate bond yields this deficit could potentially wiped be out.
This as pointed out in the trading update will have a dramatic impact on the financial position of the business .
The future looks very positive.
There's no question that Carclo have started borrowing as it's stated early in the recent trading update, "We have continued to invest in capital equipment to support long-term growth, largely financed by an increase in net debt." which in itself is a pretty impressive turnaround, a few years ago, they wouldn't have been able to borrow a bag of beans.
Bear in mind that the bank facilities are subject to four covenants tested on a quarterly basis:
Underlying interest cover, net debt to underlying EBITDA, core subsidiary underlying EBITA and core subsidiary revenue.
So they wouldn't have been able to increase borrowings without adequately satisfying these requirements.
Therefore whilst the claim, IC have stated "Higher costs stunt manufacturing growth" that's certainly not the case here, (considering all the positive statements in the recent TU), in fact it's just the opposite and given that the borrowing has been to invest in capital equipment (i.e. more machines, more revenue, more profit etc.) as opposed to e.g. cashflow then, looking forward, I see nothing but positives for Carclo.
It's also very possible in the short term that the share price could take off, just as it did between Feb and May last year when investors start to realise the potential of Carclo going forward and if Frankseluk2 (Fri 17:31) is right about the delayed after hours trades/mopping up the sells, it's very feasible that some already have.
In the TU, the BoD made the statements:
"Going forward the business will continue to execute on the growth strategies developed for each of these divisions, with further significant investment in capability and capacity planned for FY 2023".
"As well as additional employer contributions made towards reducing the pension deficit, a range of other scheme initiatives have been introduced aimed at enhancing members' benefits whilst reducing the deficit, and these are expected to continue to contribute positively in the coming years". ------- (Furthermore the triennial valuation of the pension scheme at 31 March 2021 should be finalised by about June 2022 - hopefully just in time for the FY2022 Annual Report - which may further reduce the pension deficit.
"Despite the challenging backdrop, the division has been awarded significant new tooling contracts (which are a leading indicator of future growth) by an existing large customer and consequently it is anticipated that new production lines will be installed in CTP businesses around the globe in line with our long-term strategy. This will in turn lead to continuing long term revenue growth".
Given the above positive statements/situation, the way the share price has behaved recently is totally bizarre and as WarrenBJunior says (Sat 12:11) all you can do is take advantage by topping up.
GLA
ITs a lot to do with the markets in general selling off, I for one held until the TU, to see if anything would help the share price, but no. Loads of good companies selling off, no point in watching capital decline, this could stay low for a while. The only ones I have kept holding are the ones doing buy backs and dividends. Investors chronical last week "Higher costs stunt manufacturing growth". Higher expenses are leading manufacturers to rein in spending plans. Looks like Carclo has already started borrowing.
Amazed at the negative reaction to the results but have taken advantage by topping up my investment.
This is a world class company engaged largely creating products for medical use .
I am curious about the diagnostic products in china , 1.6 billion people !
Chrissie
You will find that info on the companies website. Comparing the balance sheet with the company then and now is not like for like. CARCLO is now a totally different company. With totally different management.
On another point it's interesting that each day this week delayed trades , which if you check times and spreads at the time they look very much like buys. Tuesday 200k, Wednesday 100k, Thursday 2 x 200k and today 350k. All published after trading closed. Someone is definitely mopping up the sells.
I know "the Group is not permitted to make a dividend payment to shareholders up to the period ending in July 2023." Thinking long term what was the last dividend and what was the profit and balance sheet like at the time? I'd like to have something to look forward to even if it is more than a year away.
Good summary, frank.. I’m keeping the faith and adding more. I guess management cannot add until after the End March 2022 results are released in early summer. Last year they purchased the very next day! ATB
The revenue growth, in line profits and margin pressure were all flagged in the half way report.
The considerable strengthening of the balance sheet despite the increase in net
debt Is brilliant and gives us a clue to the reduction in the pension deficit.
The Framework contract "extended prove out" (delay) was mentioned when I asked how it was progressing at the last “investor meet the company” presentation. To be honest I was a little disappointed when I read it but that should be all ok now considering the UK side of it is in production.
The new global contract with an existing customer is a huge positive in my opinion. As is the 17 new (additional) product lines the 5 new significant accounts in the Czech Republic, USA, India and China.
Order intake in the Aero division improved significantly during the second half and especially in the final quarter. And looks like continuing as the business is being developed further.
Finally demand remains strong despite the headwinds in China and India and the problems from the war which most if not all companies are feeling.
A good update imo. Pity the share price doesn't reflect it.
No weak stocks for me. I may buy back in, once this starts to rise on better sentiment. This is the 3rd stock (which I feel is a good business) that I have dumped in the last 4 weeks.
I did take another look at Carclo for hints or clues to be excited about: Twitter account last used 2017: https://twitter.com/Carclo_plc. Website, has no current info on it, looks like it hasn't been updated since pre-Wipac. No news feed of what is happening at the company etc - cant even see the locations of the manufacturing sites. Coupled with the trading update, I concluded that they are not going to be doing any PR soon, to help the share price. No accessible broker for the retail investor, Trading update says in line with expectations for profit - what is this? Looked at the previous interims, and no guidance was given, other than 'expectations'. In this environment of ordinary stocks selling off, those that are raising their profile and engaging will fair better. Next stop might be sub 20p here, at which point, I might re-enter, but I dont see a catalyst for upward trajectory, not even from results.
I have been putting all my money in cash generating resources, all trending upwards inline with their commodity prices, which is what is partly hurting these 'good businesses'. Strong stocks such as: I3E,JSE,SQZ,BEN,IOF.
The headlines from Carclo’s statement were good, positives signs going forward but the shares are down, (admittedly during a lousy market) why is this? I’m guessing that the statement of increasing the debt probably didn’t go down too well despite the fact that this money is being used to buy further equipment to meet the latest demand.
Secondly, the board gave a very positive speech but they didn’t provide any numbers for the market to digest.
Might be next week before there is any reaction. Reads well though.
Carclo was the subject of a bid a couple of years ago at a price around 115p. It is now a more streamlined business, and if they can demonstrate resolution of the pension issue, then I see little reason why interested parties will not look again. There has been no material dilution over the last 10 years, so that 115p remains a relevant target.
The update sounds positive - however, it is completely lacking any numbers which is very disappointing. I think the update will be enough to stop the downward movement, but I do not see a sharp rise here until nearer the results. I scanned back to the previous years TU, and although it was similar without most major figures, it did include a bit more financial information. Following on from Rivaldo's comment, no broker info, no figures in the TU, I cant understand the rational behind that approach, especially given the share price performance. I must say, Today I am disappointed with the update, due to it being vague and unhelpful, it has left me wondering why the BOD would do this. I will continue to hold.