Trading Update 8th April.
Elektron updated the market on year ended Jan 2010 trading and gave an indication of current trading.
Key points:
a. Due to increased order intake in the final weeks of the financial year the company has seen a signicant increase in profitability pre exceptional costs.
b. Availabe for sale financial assets will have increased £800,000 due to a revaluation.
c. "Elektron is pleased to report that the upward order trend has continued in the first two months of the current financial year giving the Board added confidence in at least meeting market expectations for 2010/11. Queensgate, the nanomeasurement specialist which is part of Elektron Ventures, is performing particularly well."
Finncap Brokers Upgrade:
Key Points:
a. Finncap have upgraded turnover from £29.6 million to £30.3 million and increased EBITDA to £2.8 million. EPS has been upgraded from 1.17 to 1.85 basic eps.
b. Price target increased to 25p from 15p. Finncap indicated the likely hood of further upgrades.
Comments:
Turnover and profits started to bounce back from last Summer onwards and the company finished the year very strong. It looks to me like the strong finish to the latter half of the year has continued on an upward trend into the current year. We are already looking for £3 million pre tax profits on the current year I think they will be comfortably exceeded. As turnover rises more profits fall to the bottom line with rising margins.
Finncap our brokers have already upgraded our forecasts a number of times last year I think they will have to again on the current years forecast earnings.
The brokers have indicated excellent trading in the technology division. That group comprises Bulgin, Arcolectric, Sifam. The bulgin subsidiary is a highly profitable business now investors should not underestimate the increase in trading on profits. What caught me out was the increase in business from Queensgate Instruments that operation is capable of good profits going forward.
The share price has increased over 140% from its low point the last 3 months and with the market cap still under £16 million at the current mid price of 18.25p the share price could double again well before the end of the year. The current multiple is far too low at present on prospects.
Saturday, 10 April 2010
Tuesday, 16 February 2010
Director change sets Elektron's sights ever higher.
Today Elektron appointed Malcolm Argent CBE as a non executive....
http://www.elektronplc.com/news/director_16-02-10.html
Malcolm has had a distinguished career with BT and other appointments have included Deputy Chairman of the Civil Aviation Authority (1995-8) and member of the boards of Westminster Healthcare Holdings PLC (1992-9) and Clerical Medical Investment Group Ltd (1994-2001).
Elektron appear to be setting their sights high appointing directors from Blue Chip companies to this rapidly growing Aim company.
Keith Daley, Chairman commented:
'We are delighted that Malcolm has agreed to join the Elektron board and I am sure that Shareholders will join me in welcoming his appointment at this exciting time for the Company. We are continuing to look for an additional non-executive director to further strengthen the board'.
I can't wait to hear who the next non executive will be.
http://www.elektronplc.com/news/director_16-02-10.html
Malcolm has had a distinguished career with BT and other appointments have included Deputy Chairman of the Civil Aviation Authority (1995-8) and member of the boards of Westminster Healthcare Holdings PLC (1992-9) and Clerical Medical Investment Group Ltd (1994-2001).
Elektron appear to be setting their sights high appointing directors from Blue Chip companies to this rapidly growing Aim company.
Keith Daley, Chairman commented:
'We are delighted that Malcolm has agreed to join the Elektron board and I am sure that Shareholders will join me in welcoming his appointment at this exciting time for the Company. We are continuing to look for an additional non-executive director to further strengthen the board'.
I can't wait to hear who the next non executive will be.
Monday, 15 February 2010
Broker upgrade and outlook.
Finncap upgraded Elektron's forecasts when they issues a trading statement on 12th January.
They believe recent strong trading will flow through into the first quarter of FY11e. One of the reasons for that is because Elektron mainy manufacture to order, therefore any orders placed in December/January will see profitability flow through to next years figures. Moreover Elektron win one off orders and its likely these will be hinted at to brokers.
The main changes to forecasts on turnover and eps are:-
Year end Jan 2010...
Turnover increased from £28.45m to £29.60 a forecast increase of 4%
EBIT adj from 0.020 to 1.20p a 500% upgrade.
EPS adj 0.01 to 1.15p
The brokers have indicated that Elektron's competitors are on a pe ratio of 13 times earnings and have therefore pencilled in a price target of 15p for Elektron. It has to be said however those forecasts are based on year end Jan 2010 figures and in my view the current share price is undervalued on the current earnings forecasts for Year end Jan 2011 and 2012.
Finncap have left Year end Jan 2011 and year end Jan 2012 unchanged.
Forecasts for Jan 2011 are eps of 3.40p and Jan 2012 of 4.45p
However with current trading appearing to be significantly up on last year, I feel Finncap will have to upgrade 2011 and 2012 forecasts in due course. This is what Elektron said in their recent trading statement..." In December average daily order intake exceeded £175k per day which was a record for that month, representing a 74% increase on the prior year comparable figure."
Further evidence that things are picking up recently, Premier Farnell and Electromponents have indicated good trading of late more so in the far east, the US and China, which are growing strongly.
I am expecting a further pre close statement in due course. At that stage I expect further upgrades to 2010/2011 turnover, profitabiluty and eps.
However if we follow Finncap's methadology on EKT's competitors being placed on a multiple of 13 times earnings on 2011 eps of 3.40p that would equate to a target share price of 44.2p and for Jan year end 2012 on an eps of 4.45p would equate to a target price of 57.85p.
I think however, Elektron should be on a rating of at least 15 times earnings I base that on a strong balance sheet with low gearing, and rapid rise in eps the next 2 years with better prospects than Finncap have indicated.
Finncaps 9th July 2009 cash forecasts show :-
£0,347,000 cash for Jan year end 2010
£2,858,000 cash for Jan year end 2011
£5,908,000cash for Jan year end 2012.
Taking into account trading at year end being significantly higher than broker forecasts, I suspect the cash position will be far better than Finncap have forecast. Moreover interest charges should be lower as Elektron payed a scrip divi, which was accepted by over 50% of shareholders. This will have resulted in further cash savings.
When the company came out with their trading statement in Jan the company also announced a possible sale of their stake in Hartest. Should the Delta offer be accepted on the 22nd February 2010 Elektron will receive proceeds of approx £1.3 million.
My own Cash balance forecasts taking account of uptake in orders at year end and payment of scrip dividend are as follows ;-
For year end Jan 2010.
Previous profit forecasts EBIDTA adj 0.78 million. Upgraded to £.1.02 = an increase of 340k
Estimated saving on scrip dividend of say 200k plus an estimated savings on interest charges of say 50k = 250k
Previously Finns forecast cash balances for Jan year end 2010 £0.347,000 add on above savings of 737,000 = Cash balances at year end 2009 = £1,084,000
For Jan year end 2011 Finns had cash balances of £2,858,000. Add on 737k = £3.585,000. However should the HTH stake sale go through EKT will receive a further £1.3 million less tax which could equate to cash at year end of approx £4,485,000
Finns had cash balances of £5,903,000 for year Jan year end 2012 taking account of the above would equate to approx £7,640,000
They believe recent strong trading will flow through into the first quarter of FY11e. One of the reasons for that is because Elektron mainy manufacture to order, therefore any orders placed in December/January will see profitability flow through to next years figures. Moreover Elektron win one off orders and its likely these will be hinted at to brokers.
The main changes to forecasts on turnover and eps are:-
Year end Jan 2010...
Turnover increased from £28.45m to £29.60 a forecast increase of 4%
EBIT adj from 0.020 to 1.20p a 500% upgrade.
EPS adj 0.01 to 1.15p
The brokers have indicated that Elektron's competitors are on a pe ratio of 13 times earnings and have therefore pencilled in a price target of 15p for Elektron. It has to be said however those forecasts are based on year end Jan 2010 figures and in my view the current share price is undervalued on the current earnings forecasts for Year end Jan 2011 and 2012.
Finncap have left Year end Jan 2011 and year end Jan 2012 unchanged.
Forecasts for Jan 2011 are eps of 3.40p and Jan 2012 of 4.45p
However with current trading appearing to be significantly up on last year, I feel Finncap will have to upgrade 2011 and 2012 forecasts in due course. This is what Elektron said in their recent trading statement..." In December average daily order intake exceeded £175k per day which was a record for that month, representing a 74% increase on the prior year comparable figure."
Further evidence that things are picking up recently, Premier Farnell and Electromponents have indicated good trading of late more so in the far east, the US and China, which are growing strongly.
I am expecting a further pre close statement in due course. At that stage I expect further upgrades to 2010/2011 turnover, profitabiluty and eps.
However if we follow Finncap's methadology on EKT's competitors being placed on a multiple of 13 times earnings on 2011 eps of 3.40p that would equate to a target share price of 44.2p and for Jan year end 2012 on an eps of 4.45p would equate to a target price of 57.85p.
I think however, Elektron should be on a rating of at least 15 times earnings I base that on a strong balance sheet with low gearing, and rapid rise in eps the next 2 years with better prospects than Finncap have indicated.
Finncaps 9th July 2009 cash forecasts show :-
£0,347,000 cash for Jan year end 2010
£2,858,000 cash for Jan year end 2011
£5,908,000cash for Jan year end 2012.
Taking into account trading at year end being significantly higher than broker forecasts, I suspect the cash position will be far better than Finncap have forecast. Moreover interest charges should be lower as Elektron payed a scrip divi, which was accepted by over 50% of shareholders. This will have resulted in further cash savings.
When the company came out with their trading statement in Jan the company also announced a possible sale of their stake in Hartest. Should the Delta offer be accepted on the 22nd February 2010 Elektron will receive proceeds of approx £1.3 million.
My own Cash balance forecasts taking account of uptake in orders at year end and payment of scrip dividend are as follows ;-
For year end Jan 2010.
Previous profit forecasts EBIDTA adj 0.78 million. Upgraded to £.1.02 = an increase of 340k
Estimated saving on scrip dividend of say 200k plus an estimated savings on interest charges of say 50k = 250k
Previously Finns forecast cash balances for Jan year end 2010 £0.347,000 add on above savings of 737,000 = Cash balances at year end 2009 = £1,084,000
For Jan year end 2011 Finns had cash balances of £2,858,000. Add on 737k = £3.585,000. However should the HTH stake sale go through EKT will receive a further £1.3 million less tax which could equate to cash at year end of approx £4,485,000
Finns had cash balances of £5,903,000 for year Jan year end 2012 taking account of the above would equate to approx £7,640,000
Sunday, 14 February 2010
Trading statement and possible disposal.
Elektron issued a trading statement on the 12th January and
http://www.elektronplc.com/news/Trading_update_12-01-10.html
Key points :-
a. Significant upturn in orders. December had a daily order intake of 175k per day a record for that month and a 74% increase on the prior year comparable figure.
b. The company indicates profit will significantly exceed broker forecasts.
c. There is to be divisonal reorganisation, the number of divisions reduced from 3 to 2 the two new divisions being Elektron Technology and Elektron Ventures.
d. "The purpose of the reorganisation is to focus the Group and its management on the highest growth opportunities.
ET is currently concentrating on opportunities within the global connector market (estimated $35 billion sales in 2009). Each EV business unit will be managed for growth and where growth is not available, consideration will be given to disposal of the relevant business unit."
e. "The Board announces that it has signed a non binding letter of intent to enter into an irrevocable undertaking to accept an offer, when made, by Delta Controls Limited for all of the issued, and to be issued, share capital of Hartest Holdings plc at a price of 69p per share. There can be no certainty that Delta will make an offer or that any offer made will be successful. However in the event that an offer is successful Elektron expects to receive proceeds of approximately £1.37 million representing a profit on original cost of £0.01m and a profit on last reported carrying value of £0.90m. "
http://www.elektronplc.com/news/Trading_update_12-01-10.html
Key points :-
a. Significant upturn in orders. December had a daily order intake of 175k per day a record for that month and a 74% increase on the prior year comparable figure.
b. The company indicates profit will significantly exceed broker forecasts.
c. There is to be divisonal reorganisation, the number of divisions reduced from 3 to 2 the two new divisions being Elektron Technology and Elektron Ventures.
d. "The purpose of the reorganisation is to focus the Group and its management on the highest growth opportunities.
ET is currently concentrating on opportunities within the global connector market (estimated $35 billion sales in 2009). Each EV business unit will be managed for growth and where growth is not available, consideration will be given to disposal of the relevant business unit."
e. "The Board announces that it has signed a non binding letter of intent to enter into an irrevocable undertaking to accept an offer, when made, by Delta Controls Limited for all of the issued, and to be issued, share capital of Hartest Holdings plc at a price of 69p per share. There can be no certainty that Delta will make an offer or that any offer made will be successful. However in the event that an offer is successful Elektron expects to receive proceeds of approximately £1.37 million representing a profit on original cost of £0.01m and a profit on last reported carrying value of £0.90m. "
Wednesday, 13 January 2010
Elektron vacancies point to rapid organic growth.
Elektron PLC has recently been recruiting key staff in both the UK and China as they seek to drive rapid organic growth.
Left click to enlarge picture.
Divisional Managing Director will assist in driving growth forward in the Technology subsidiaries.
"The division will operate a videoconferincing system for board meetings.
The division is placing particular emphasis on the Asia Pacific region which represents 44% of its addressable market but only 14% of existing sales."
Left click to enlarge picture.
One of the vacancies was a divisional finance director for their Technology division in China the subsidiaries comprise Bulgin/Arcolectric/Sifam.
In their job advert the company state they seek to double sales in this division within the next 3 years.
The Technology division is the most profitable part of the company and accounts for about 74% group of turnover. Should the company achieve their sales growth targets the brokers forecasts will be beaten by a wide margin.
Left click to enlarge picture.
Divisional Managing Director will assist in driving growth forward in the Technology subsidiaries."The division will operate a videoconferincing system for board meetings.
The division is placing particular emphasis on the Asia Pacific region which represents 44% of its addressable market but only 14% of existing sales."
Left click to enlarge picture.
One of the vacancies was a divisional finance director for their Technology division in China the subsidiaries comprise Bulgin/Arcolectric/Sifam.
In their job advert the company state they seek to double sales in this division within the next 3 years.
The Technology division is the most profitable part of the company and accounts for about 74% group of turnover. Should the company achieve their sales growth targets the brokers forecasts will be beaten by a wide margin.
Wednesday, 19 August 2009
Elektron trading statement.
Elektron came out with a trading statement today.
As I stated in my footnote to the brokers forecasts the most profitable subsidiaries doing very nicely indeed.
At the moment the ECD division contrbutes 60% of group turnover the other divisions split 20% hard metal components , 20% from instruments.
Looking a little further ahead I am expecting the instruments operations to not only catch up on ECDs profitability but to be the most profitable business overall. The reason being some of the instruments are high value products and therefore margins will be better.
The company stated they were confident of long term growth in profits and dividends.
As I stated in my footnote to the brokers forecasts the most profitable subsidiaries doing very nicely indeed.
At the moment the ECD division contrbutes 60% of group turnover the other divisions split 20% hard metal components , 20% from instruments.
Looking a little further ahead I am expecting the instruments operations to not only catch up on ECDs profitability but to be the most profitable business overall. The reason being some of the instruments are high value products and therefore margins will be better.
The company stated they were confident of long term growth in profits and dividends.
Tuesday, 18 August 2009
Total Carbide launch.
Total Carbide launch new identity and new product line together with a £1.8 million investment programme.
http://www.totalcarbide.com/media/TotalCarbidelaunchOE2009FINAL.pdf
Neill Rickets indicates the subsidiary has already had success in new business in the last 3 months.
The company has developed a new Nickel Chrome alloy for the oil and gas industry.
http://www.totalcarbide.com/media/TotalCarbidelaunchOE2009FINAL.pdf
Neill Rickets indicates the subsidiary has already had success in new business in the last 3 months.
The company has developed a new Nickel Chrome alloy for the oil and gas industry.
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