Undervalued?23 Jan 2023 20:07
Based on the last available accounts we can set up the following calculations:
Current assets(£m) = 29.32
Non-current assets excl. intangibles(£m) = 5.42
Current liabilities(£m) = 14.97
Non-current liabilities(£m) = 3.77
Number of shares(m) = 60.96
Tangible equity(£m) = 16.00 (27 pence/share)
Net-current asset value(£m) = 10.6 (18 pence/share)
Tekmar Plc consists of 5 subsidiaries. By estimating what each company is worth we can do a sum of the parts calculations of the company:
Ryder Geotechnical Ltd (£m) = 0.7
AgileTek Engineering Ltd (£m) = 1.7
Subsea Innovation Ltd (£m) = 6.3
Pipeshield International Ltd (£m) = 4.2
Tekmar Energy Ltd (£m) = 31.2
Net-current asset value(£m) = 10.6
Value(£m) = 54.7 (90 pence per share)
As a summary we can say the following:
Liquidating price = 18 pence per share
Tangible equity = 27 pence per share
Price in a “normal” market = 90 pence per share.
In my opinion selling shares at 9pence to the institutional investor seems like a bad decision from the management. The best thing will be to scrap the deal. They have won several large contracts recently, and with a good execution of the contracts we might be able to see green numbers on the bottom line and a share price considerably higher than today.