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From the Irish Independent UDG Healthcare CEO Brendan McAtamney has said he would have "absolutely no issue" with buying another UK company despite the looming threat of Brexit. The Irish company, listed on the FTSE-250, has made a number of acquisitions in the UK, including a deal in October last year to buy STEM Marketing for up to �84m (�94m). Earlier this year, UDG also announced that it would spend �9m on a new clinical packaging facility in south Wales. "We are sheltered a little bit because we provide that business for global clients as opposed to just UK-specific clients," he said. Mr McAtamney was speaking as UDG reported a strong set of full-year results. Its group net revenue rose 12pc to $1.02bn (�858m) and was 16pc higher on a constant currency basis. Operating profit was up 12pc at $129.3m (�108.7m). The figure was 17pc higher on a constant currency basis. At its Ashfield unit, which provides communications, advisory and clinical services, net revenue was 21pc higher at $630.1m, and up 13pc on an underlying basis. The unit made an $81.6m operating profit, which was up 16pc, and 5pc higher on an underlying basis. Its Sharp packaging division posted revenue of $302.1m and a $41.3m operating profit. The figures were 2pc and 11pc higher respectively on an underlying basis. UDG Healthcare completed six acquisitions during the last financial year, involving capital commitments of more than $270m (�227m). Mr McAtamney said that one potential "chunky" acquisition had come close to being finalised, but had not been sealed. UDG had a net debt to ebitda (earnings before interest, tax, depreciation and amortisation) ratio of just 0.32 times at the end of September. Net debt was just $53m. Mr McAtamney said that UDG Healthcare could deploy between $450m and $500m for acquisitions while remaining within a 2 to 2.5 times comfort zone. He said he has no preference for either a single large deal or continuing with bolt-ons. "At the end of the day, honestly it doesn't make a whole lot of difference," he said. "With a transformative deal � the risk goes up with one. Being able to do six deals just de-risks it. That being said, if something came around, say a $200m to $300m [deal], would we look at it? Absolutely. We have the capability to do that." He said diversification of revenue and profits, both geographically and operationally, remains important to the group. UDG shares fell as much as 5pc yesterday. CFO Alan Ralph will retire next year.
This report from the Irish times sums it up perfectly and I note we have the same Target Price! Pretax profits at service provider UDG Healthcare increased by 17 per cent driven by a �combination of underlying and acquisition growth�. In its full-year results to the end of September, the Dublin-headquartered company adjusted pretax profit stood at $118.9 million (�100 million) in a year the group completed six acquisitions with capital commitments in excess of $270 million. These acquisitions, according to chief executive Brendan McAtamney, will enhance and broaden the company�s capabilities. �We are well positioned to continue to deliver organic growth and our strong balance sheet will enable us to execute further strategic acquisition opportunities as they arise,� he said. London-listed UDG, which operates across three divisions known as Ashfield, Sharp and Aquilant, employs over 9,000 people across its operations in 24 countries. Its Ashfield division was particularly successful, recording a 16 per cent increase in operating profit, while operating profit at the the Sharp division was up 8 per cent � helped by Sharp Europe�s move into profit. In the Aquilant division, adverse currency translation movements led actual operating profit to decrease by 7 per cent on the previous year. However, Mr McAtamney said he wasn�t concerned by Aquilant�s performance, noting that it isn�t a �core focus� of the company. Stockbroker Davy told clients that UDG exits 2017 in �excellent shape�. �We reiterate our �outperform� rating and move our price target to �10.00,� analysts Andrew Young and Allan Smylie wrote in a note. They also said that UDG�s balance sheet capacity leaves the door open for further mergers and acquisitions. Targets Commenting on potential future targets, Mr McAtamney said the greatest space for expansion was in its Ashfield group with communications in the healthcare space still being �very fragmented�. He said the group as considerable fire power and has just $53 million of debt. As to whether the company can continue on this profitable position, Mr McAtamney said he expected Ashfield to grow by between 5 and 10 per cent, while the Sharp division should grow by double digits, he said. The company reported that its organic growth, or non-acquisition related growth, is expected to �accelerate� during the second half of next year. As a result of healthy performance, UDG upped its proposed final dividend by 7.5 per cent to $9.72 per share.
Hi Oneday. Cracking question. I don't honestly think the response to Udg results today is very instructive for learning how to read financial results. Today's fall although it recovered somewhat by Close of play really defies belief. You will learn if you are new there is a sell on news brigade which often pays but sometimes does not. I guess the point of this approach is that the news is priced in and no need to hang around. For financial statements in general you need to assess the tone of the statement and buzzwords. "Confident, look forward to, will bring take advantage of" etc are usually positive while "cautious,challenging,weighted towards, hoping to close out" are usually negative. You should learn to read comparatives of prior year as well as be familiar with market expectations if you can. But today is a shocker for me as I too saw nothing wrong with the results and nothing to justify the sell-off which was 8% down at one stage. Bizarre!
Hi 'onedaywewillbe'. I have been an investor here for about 2 years and it's probably been one of the best investments I have made. I, along with other investors have been suprised by todays SP drop but I am unconcerned as the report was so positive on all fronts. I expect there's been a lot of profit taking and according to my research there's been more Buys than Sells today. I took the opportunity to top up at 818 and I'm fully expecting to see a good return on that.
Confused investor needing help! Can someone teach me how to read financial results please. i bought in this morning first thing after anticipating a strong rise. i am now 3% down Going to hold for a while and see what happens.
Còuldnt agree more. I have actually managed to top up at 818p and I expect to stay invested for the long term
Good results again double digit EPS growth. This company is a steady Eddie
Totally unfathomable (is that a word) I really wonder sometimes if traders pick a stock to "play" with for a few days and make a awful lot of money .
Hi both. I actually tthought it was just me! I read through the whole report and I could not find literally even a footnote that hinted things are not going well. Yet if you look at the SP it seems like a profit warning has been issued. Debt has been paid down substantially and there are more acquisitions in the pipeline with ready loans to pay for it. At constant currency the company is outperforming last year by some margin. I am imminently going to need some of UDG's products personally as I am left scratching my head.
Eagle and Knife , me too I will never understand how results like these can see a share drop like it has done this morning . Very very tempted to buy some more .
I'm also at a loss as to why after a really good set of results we are seeing a drop in the SP of between 4% and 5% and I'd be really interested to hear contrarian views. I'm definitely not selling my holding and I see this as a bit of a buying opportunity
with a 17% rise in profits and and a 7.5% hike in the divi. I am not sure what the market wants seeing this has fallen 3%+ so far. The investor conference call may spur some buying. Looks a solid share to me and once the dust has settled I will be buying more.
900 would be nice, looks like Fidelity have seen an opportunity .
Clawing back its losses now. Although today only might be a blip I expect we can make 900p just before results. However if they disappoint I guess we will be hammered. This current level is a massive buying opportunity.
I doubt there will be bad news Dogsy. Perhaps currency movement will flatter the headline figure. This has fallen fast and far since the broker update. But I expect we will claw back some of the losses in the run up to the results as investors position themselves for good news. I can't explain the drop save to say it ran up strongly to 960p and there has been a bout of profit taking.
all gone tits up , any ideas , bad results next week ?
I think a broker downgrade may be behind the fall. I am not sure why though because these brokers shift about Tp's constantly and their target prices are only ever finger in the air valuation. I suppose if we get a further follow on fall or drift down then sentiment has changed here. Undeservedly imo of course. However as results are 18 days away I would say we will have a run up into them. One thing I will be looking for is the effect in currency movements on the earnings.
Working its way back up now, lets hope so
After a strong run. I expect the breakout to new highs was probably a prescription for investors to avoid financial headaches down the line by hanging in for too long. Maybe these investors should see an optometrist instead because it is a little shortsighted. I certainly expect UDG to be 20 to 30p higher by results day on November 28th.
I am sticking Dogsy. Simply because I don't think it will retrace far enough to make it worth trading. Serialisation is a year away and that was the only weak segment. Obviously the market overall is probably quite toppy and if there is a correction UDG will go down like the rest. I really think there is strength behind this rise. Falls have been short-lived and usually powered past the previous highs. 940p could be the peak here and a good trigger point to sell. But it might be worth hanging on to see if 950p comes shortly as we break into a new trading range and possibly attain �10 as you suggested.
Been in and out since 650 , latest buys at 852 , could go past a tenner , decisions! decisions
Just a penny away from my TP of 940p now. Any other holders here? Who's sticking and who is twisting after this good run up.
I am building a stake here as I believe it to be worth 940p. I think serialisation which has been delayed until November 2018 will be a big money spinner for UDG. Every other segment of the business is performing well. 900p is proving to be a bit sticky to overcome. A hold above that would be significant to break into a new trading range.
Joined the party at UDG couple of days ago during the sharp increase , but have been tracking the stock for a year - they keep delivering and this stock will move up past £10 on the next major move up .not expecting fireworks but they will deliver as they have been doing over the last couple of years. Acquisition anybody? GLA Scotinvest
seems to have regained its mojo since it fell to about 832p recently. I see £9 coming here as we move into a new trading range. Very undervalued share and a quiet board. What's not to like?