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Bought in below 140, cashing out today. Good luck guys.
Yahoo have today calculated true value at about 190 per share and quote the analyst target of 247. I’d be impressed to hit 190 and retiring if we hit 247. They both know more than me so here’s hoping!
All at Sea: sorry missed your question “ what did Virolens have to do with stadium?” . Answer: Everything. As the person running the project was the ex stadium CEO, and the person running manufacturing on Virolens was the ex Stadium COo/ops director!
A nice analysis Mr Picky. I’d be delighted with the outcome you describe too. Managed to sell one of my kids investments today at a good profit when it reached over 170, but need to be ahead of 200 and ideally 220/230 to consider parting with my own chunky TT investment. Remaining optimistic and in the short term the divi is good. I think Peter is a short term turnaround and financial engineering guy rather than an improver and builder. So my outlook on his is fix and flog ( 3 to 4 years) rather than build, grow, hold ( 10 years).
All at Sea: what you say you took as profits does not make Stadium a good business, but perhaps simply a master of disguise. I stand by my ‘woeful’ ( chuckle) description.
The divestment of Stadium is working well by the looks of it.
I tuned into the Capital Market Event on Tuesday to hear the new CEO say they were on the brink of a bright new world ! His thesis is that because they now have close collaboration with customers on long term projects in highly regulated markets they enjoyed significant barriers to entry. Having completed project Albert (selling off Stadium and a site in China) they can improve margins overall because the remaining business has higher margins. Peter France repeated the old mantra that they were in markets growing at above average rates and disassociated himself from all the others who were going to get margins up. (Old lags like me will remember Geraint Anderson and Richard Tyson saying that for the last fifteen years.) But actually we have seen significant write-offs and restructuring costs over those years, Albert cost shareholders £32.5m. It is not surprising that the analysts were sceptical in the Q & A session.
So now its "Project Dynamo" which is going to deliver, wait for it, 12% margins by 2026. By loosing the three operating divisions (P&C, GMS and S&SC) and operating as one "TT" in three regions North America, Europe, and Asia they will unlock "Efficiency", "Growth" and "Innovation"....just like that! Leading to ROIC in "mid to high Teens" and have cash conversion of 85%+. In fairness if they do get those margins to 12% without Cap Ex. exceeding depreciation and only modest working capital increases they will raise ROIC. Actually 10% margins in '24 is quite realistic (not over the first half) because Albert raises overall margins and, hopefully, there is no repeat of the very costly ventilation and air-con break down this year. They did produce a slide showing how they would get to 12% but I wasn't convinced. Yes, a full year without Albert will add a bit and even less pass-through helps but all the rest is expected to come from Efficiency (both factory and SG&A) plus growth. Well, if there are barriers to others entering your market, you raise your prices but they didn't add anything for that.
Mr France never underestimate the difficulty of changing the way people think about the business. He agreed that if one was starting with a clean sheet of paper TT wouldn't have as many plants around the UK and US but as he put it we will work with what we have. When asked how they would be able to acquire bolt on business in a couple of years time he said he would by something lowly rated like TT ! Yes, TT is cheap because it is too small and has been accident prone for nearly two decades. Get the margins up to 10%, nudging 11%, sometime in 2025 and then put the business up for sale. You should get around 220p a share (at today's market multiples) and everybody will be happy but lets see you get there first. Oh, I nearly forgot to add that they plan to reach Net Zero in 2030. five years earlier than previously declared.
Unfortunately your woeful description does not match up to the company in which I was an investor for several years. Stadium performance netted me far more profits than TTG has succeeded in doing so far.
Virolens came after the acquisition of 2018 because of course it was a COVID product and was developed by iabra. What has it to do with Stadium?
On the positive side, my investment in POLR is now reaping me dividends and the company's success is said to indicate an upturn in tech interest generally. I hope TTG will also benefit.
Know the sites very well, historically poorly run and underinvested. A backwards sales philosophy and offshored the wrong products, low pay, low investment, high labour turnover, the ‘virolens’ project burnt a mass of cash, the China site was sub par, the Sweden hub very costly, old Stadium leadership retained and continued flawed approach, Boston business starved of key posts and investment, could go 9n and on. Headlines s9met8mes hide l8ng standing reality.
"What was so bad about the Stadium deal?
"[Stadium] pumped around £2m into its Hartlepool site over the last two years to create what officials describe as a European manufacturing centre of excellence." 16 Feb 2018
https://www.thenorthernecho.co.uk/business/15996227.tt-electronics-makes-move-hartlepool-based-stadium-group/
"
You never did answer my question HogBog!
True but there is good active buying and the ISA close, new ISA, new SIPP, ‘ buy in to get divi’ movement will continue for a few weeks so I’m remaining optimistic. Their significant trimming of loss making factories and big salaried downsizing will pay off in time. So glad they ditched that old Stadium purchase. Buying that was a catastrophic decision by someone.
Back in today with double of my original position
That tidal surge didn't last long..
Rather overdue. Be nice to get over 200 soon.
Bought a few more.
Oh, do tell. Pretty please..
Good guys, found better opportunity elsewhere.
I tunned in to the webcast and got a bit of extra flavour. 2023 was an inflection year with strong cash conversion (92%) which has reduced gearing to 1.7x and, when the proceeds of the sale to Circo Group come in, it falls to 1.5x with further progress to the bottom end of the target range of 1 - 2x by the end of the 2024. The write down on this sale of £32.5m was taken in 2023 resulting in negative statutory accounts again. The loss on the HVAC breakdown was C£3.0m compared with £2.0m previously estimated and, hopefully, will not be repeated this year. Looking forward they are confident of making a 10% margin this year, all be it on near flat sales, so we should see some eps growth by the end of the year. Mark Hoad did much of the talking. Peter France, as he said himself had not given this type of plc presentation for some years and confined himself to good sounding generalities, in my view. He will reveal more at the open market day (April 9th) and has ideas for changing the management structure. The company is in good shape and I came away with the impression that they will get the business in a strong, low leveraged position by the end of this year. Do they then want someone to buy the whole business? I suspect so and we will see an honourable end for this little company with the shareholders making a decent return.
Yes, looks good all round. I will come back after the presentation if there is anything worth saying.
Look really strong across the board, really bullish future guidance, above pre Covid levels, nice divi increase. This should bounce well this morning after sliding on no news for months
The disposals look sensible although the share price continues to disappoint. Maybe the results tomorrow will prompt a rally - see that cityconfidential have suggested a buy ahead of the results
What was so bad about the Stadium deal?
"[Stadium] pumped around £2m into its Hartlepool site over the last two years to create what officials describe as a European manufacturing centre of excellence." 16 Feb 2018
https://www.thenorthernecho.co.uk/business/15996227.tt-electronics-makes-move-hartlepool-based-stadium-group/
As a Stadium holder the takeover made me money, but the SP did take a tactical dive just before the deal so I could have made quite a bit more. TT Electronics has not made me any money!
TTG received a positive write up on Stockopedia this morning and a Green rating and the SP had a nice tick up today. Maybe the market has woken up to TTG.
Certainly was excellent news. The Hartlepool and DG sites are the leftovers of the disastrous Stadium purchase which left TT with these poorly invested factories. Cardiff had big issues too. A good move for cash and means the remaining business is all Swiss-watch like and well invested and profitable/highly profitable.
This morning looked like more good news to me. Presumably that money will go towards improving net debt without sacrificing any material profits.
Market doesn’t agree. Hopefully that’ll change.