Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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who is the DJ
?...at end of previous post title of course ...may be Jolly lucky..but don't have (crystal) balls
Robinson PLC ("Robinson") Completion of the acquisition of Madrox Robinson is pleased to announce completion of the acquisition of MADROX Spółka Jawna, a Polish based manufacturer of plastic packaging, details of which were announced on 14 February 2014. The total consideration, which includes an earnout element payable in 2016, is estimated at £13.2m. The level of the earnout is dependent upon performance of the Madrox business prior to the payment of the earnout. The initial cash element of £10.6m has been funded from cash reserves and property backed bank debt (including £3.5m of new debt, denominated in PLN, repayable over 4 years at WIBOR plus 1.4%). The audited Madrox accounts for the year ended 31 December 2013 reported sales of £9.8m and a profit before tax of £2.2m. Net assets were £5.1m. Commenting on the acquisition Richard Clothier, Chairman of Robinson, said: "The acquisition of Madrox is fully in line with our strategy to expand in Central Europe partly through selective acquisition of local plastic packaging manufacturers who supply the strong brand owners and leading private labels in our sectors. It will allow us to take a more prominent position in the growing plastic packaging markets in this region."
Jolly nice pallet
if madrox integration a success ...I have not sold these...just keep on buying.. ...why not buy a few now...and some at the end of the year...or when we have post integration update?
Jolly - I agree it's not dirt cheap tbh and I'm rueing the fact I didn't buy in when it was almost 10% cheaper to do so not long ago! Think I'm too late? What do you see as fair value here?
shd be transformational...scaling up nicely
certainly not, super confident here.
..
flexibility lol...still don't feel it is dirt cheap, mind
Hey Jolly, how are you doing? did you have a good weekend, notwithstanding the football lol? I just wanted to say re: RBN - you have really changed your tune compared to what you were saying 10-11 May sort of time when you thought this was fully priced (at 200p ish)
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all good
I would guess given impressive buying and transformational Madrox deal
Bloody hell mate what a fantastic life you've led. If I can take 3 or 4 gap years during my working life I'll be delighted :)
& 3 or 4 gap years to boot lol
It's more like 4 degrees if you did 3 masters, surely? one degree (3 years) + 1 Masters (1 year) + 1 Masters (1 yr) + 1 Masters (1 yr), right? Oh wow I never had you down as someone who would have stayed that long in education. Well done for avoiding the world of work for as long as possible :)
don't know...learned on the job after master in finance in the 80s (one of three masters...don't ask lol) Jolly three degrees
Jolly, Ah I get what you're saying. Yeah that unconventional approach to EV is unconventional cos it's clearly incorrect lol. Thanks for pointing out the error of my ways! Glad you agree with my general conclusion though :) Btw jolly, as a general question, what books would you recommend I read? I'm asking cos if you remember on the SYQ bb I said I planned to go away & do my homework before coming back to investing again like I did between my first and second attempts at setting up a university newspaper, and I haven't done that yet but still intend to Best, Dan
The acquisition of Madrox is now scheduled to complete in mid-June, one month later than the original timetable due to delays in the Court approval process in Poland.
The acquisition is expected to complete in May 2014.
my observation would be that your unconventional approach to EV risks muddying the clear conceptual waters ...I would urge you to desist lol ...the EV is the measure of long term external capital of whatever form needed to support the business that generates the EBIT...in this case the inventory are needed to generate the EBIT as is much of the property...so pls don't extract these assets to reduce EV lol ...but I go along with your conclusion that if they manage the integration well, there is value here
This looks like its ready to pop, some pretty large buys over last week or so which should bode well for sp gains. Wonder whats brewing? I bought in at £2.15 in February and watched it fall ever since but expect to be in profit very soon....
Jolly, I’ve been looking into RBN a bit this afternoon and I think RBN is cheap on an EV/EBIT basis. Here’s my working: I worked out the current EV (using my harsh method which is Current + Non-current Liability minus Cash & Cash equivalents only) as £32.7m and I divided that by the true 2013 PBT figure (pre-Madrox deal) of £2.64m. This came to 12.4 and is not very good. I then added the £13.2m being spent on the Madrox acquisition to the EV to get £45.9m and divided that by the post-Madrox deal PBT of £4.64m. The EV/EBIT then dropped to 9.9 which is still not great. However I then decided to look at the other assets and I feel like it’s fair to include the £2.1m inventory, the £1.25m non-current assets held for sale, and the £10.8m value of their property & equipment. This brought the EV right down to £31.7m. The EV/EBIT then dropped to 6.8 which is superb! However Paul Scott, an accountant & well-respected AIM analyst, says that “their substantial property assets in Chesterfield are probably undervalued by a considerable margin, as they are only recorded in the books at "cost or deemed cost". Hence open market value is probably considerably more than book value, so there is hidden value here.” So the real EV/EBIT is even lower …and that’s before you even consider the growth both Robinson and Madrox are likely to have over the next 12 months. What do you think?
Thanks will do. FWIW - I feel RBN is still undervalued, from the finals the PBT was only 8.8 times mk cap, PE 10 & PEG only 0.2. Plus any one off increase to bottom line by land/property sale/s. Just my take on things. DD