Cairn Homes Share Discussion Threads

[wan] 27/10/2011 16:22

Opps apologies, wrong epic code in title, replacement thread corrected/created CRG!

[wan] 27/10/2011 16:18

Corin is clearly not in favour at the moment and the shares are currently trading at a 20% discount to NTAV and a 40% discount to NAV.

Anyone taking more than a cursory look will see that Corin's traditional markets are facing headwinds from austerity measures, along with the industry-wide decline in metal-on-metal (MoM) hip products (which now represent a relatively small percentage of Corin's revenues) and the challenge from their mature knee portfolio. However, the management are a good way through implementing a growth strategy and a rebalancing of the portfolio and there are early signs that this strategy is starting to bear fruit, with the non MoM hip portfolio seeing accelerating sales growth which offset the declines seen elsewhere, as perhaps can also be seen by still achieving some marginal top line growth despite what is arguably a challenging market and a transitional period for the company (which included the transition to direct marketing in the US).

So, yes I can see the downward trend in some of Corin's traditional markets, but I can also see what looks like a strong underlying growth trend coming through. One area that has caught my attention is the supply agreement with a US company called Mako Surgical, which Corin has already highlighted, is weighted to the second half and will contribute to the stronger sales growth that the company expects; "Sales to distributors (including MAKO) are weighted more towards the second half this year than has recently been the case." With the Mako supply agreement firmly in mind, it's worth considering that the increase in net dept from £4.2m to £6m was driven by some significant stocking orders from MAKO for the third quarter of this year, but this trend is not expected to continue in the second half of the year.

Keeping the Mako agreement in mind, a commercial release in the US by MAKO of the Corin hip implant system was currently planned for the second half of 2011, and I note that Mako announced the introduction of the MAKOplasty(R) Total Hip Arthroplasty on September 19th 2011 –


So we should hopefully start to see the early impact of this agreement in the FY Results. What further caught my attention was that to date Mako's success has been driven by initially targeting 'partial' knee procedures, but with 300,000 hip replacements taking place in the US annually, the hip opportunity is many times larger than knees. I also note that the agreement with Mako allows for the potential future integration of other Corin implant systems. Obviously Corin's new 'total' knee system, for which commercial launch is expected in the second half of 2012, springs to mind. However, I note that Corin has received two further FDA approvals for additional hip products 'beyond' those that were required for the initial Mako agreement (see below), neither of which has been reported yet, but may feature in the results and/or extension of the Mako agreement.

Decision date 29th June 2011 – Corin Minihip Femoral Stem


Decision date 4th August 2011 - Corin Optimom Modular Head


With further rebalancing of the portfolio and product launches scheduled for 2011 and 2012, growth should become the main theme and not the underlying one, which should have a notable impact on earnings going forwards in the medium term (2012) and a significant impact on the longer term (2013 and beyond). In my opinion it should be a case of when and not if the market re-rates the shares.
Although Corin is experience some headwinds, it strikes me that it is a case of some joint replacements are wanted, but the higher percentage is needed. So given that the demographics are hardly changing in a way that would imply an underlying reduction in demand (quite the reverse), there will always be a solid if not growing market to go after and indeed in the current situation one could argue a case for a significant build in pent up demand, as what can be put off today, in most cases cannot be put off tomorrow.

With Corin Group broadening their portfolio and positioning the business for growth and with the shares trading below NAV, this arguably puts Corin in play as a potential bid target, which may act as either a floor or a catalyst. But for those with a longer term investment horizon, other solid reasons provide the main investment rationale and hopefully far higher returns compared to an opportunistic bid at these low levels.

[mobile dealer] 02/2/2001 11:27

LC

Hi, do you have any views on how NVR, as it now is, will be likely to move from here on?

Bid side activity today.

Anyone else's views would be welcomed.

[gopher] 22/11/2000 18:12

They have a lot of cash from the Plumbing & Heating sale in the balance sheet, which American Value Investors would like to see distributed to shareholders. The management credibility is on the way up after the value destruction of the past.

[limpsfield chartist] 22/11/2000 09:51

Dragging this one up from the depths as it looks like they are reversing their longer term downtrendthats been in place for about 6 years. Looking for 200 in the short term with a break through here opening up 220 ish - but ;longer term looks like sentiment is a lot more positive over the past 12 months so interesting times ahead I reckon.

LC

[nickb] 27/4/2000 09:15

RNS Number:6678J
Caradon PLC
27 April 2000


Contact Jurgen Hintz, Chief Executive
Caradon plc 01932 850 850

David Bick
Holborn Public Relations 020 7929 5599
[e-mail]


Caradon plc

CARADON TO DIVEST PLUMBING BUSINESSES
AND SHARPEN FOCUS ON GROWTH MARKETS

Caradon plc today announces further significant steps in its strategic
transformation into a simpler business, focused on strong positions in growing
markets.

In the last two years Caradon has radically simplified its portfolio,
divesting 12 businesses and exiting a number of low-growth markets. The
Group's operations have been restructured and focused on achieving growth, as
delivered in 1999: Sales of the continuing businesses grew by 18%, operating
profits by 27%, and earnings per share by 38%.

The strategic transformation of Caradon is now being advanced to the next
stage with the announcement today of plans for:

* the disposal of all Plumbing businesses, Caradon's largest sector, including
leading UK brands such as Mira Showers, Stelrad Radiators, Ideal Boilers and
Twyford Bathrooms.

* the disposal of Friedland, the leading European Door Chimes company, to
focus the Electrical sector on the growing 'Intelligent Building Systems'
markets.

* the acquisition of Columbia, a Californian Aluminum Extruder, to expand
Caradon's vigorously growing Extrusion business, as detailed in a separate
news release.


Group Chief Executive, Jurgen Hintz, commented:

'We are determined to keep simplifying the Group, to concentrate resources on
opportunities for enhanced growth and higherreturns. Today's moves advance
these objectives. They will allow us to build scale and competitive advantage
in our chosen markets, and thereby generate sustainable economic value.

'After these transactions Caradon's exposure to growth markets will have been
trebled since early 1998, when less than a quarter of Group sales were in
markets growing over 5% per year. Going forward, three quarters of our
businesses will benefit from such underlying growth.

'The Plumbing businesses to be divested are performing well, following their
restructuring in the last two years. They benefit from a first-class
management team and from strong brands, combining to a market-leading position
in the UK. They are well placed to continue to advance under appropriate new
ownership.'


In 1999, the companies to be divested grew total sales by 5% to #370m, and
operating profits by 12% to #40m, before restructuring. The proceeds of these
sales will allow Caradon to make further strategic, value-enhancing
acquisitions and to fund possible further share buy-backs. CSFB is advising
on the disposals.

Going forward, Caradon will be concentrated on three sectors, which in 1999
grew reported sales by 25% and operating profit by 31%. Including the
full-year contribution of four recent acquisitions, the 1999 proforma sales of
the three sectors adds to over #1.2 billion, roughly doubling the Group's
scale in these markets, as follows:


1998 1999 1999
Sales # million Reported Reported Proforma

Indalex Aluminum including Easco
Solutions (Extrusions) 196 313 528 and Columbia

Intelligent Building including Brand-
Systems (Electrical) 267 288 470 Rex and eff eff
Alarm
Security Printing
Services 215 244 244
__________________________________________________________

Total 678 845 1,242
__________________________________________________________


In 1999 these three sectors achieved a combined return on invested capital of
16% pre-tax, before acquisitions. Each sector exceeded the Group's cost of
capital, delivering on our commitment to create economic value.


Indalex Aluminum Solutions (formerly Extrusions)

Indalex is a leading competitor in the strategically attractive North American
market for aluminum extrusions. Market volumes are expanding by over 7% a
year, driven by three factors: building demand in the sun-belt states, growth
of recreational products (from golf bag frames to camping vehicles), and
high-tech electronic component growth.

Indalex volumes and profits grew 19% in 1999, excluding the Easco acquisition
contribution. Customer demand for enhanced service performance and higher
technical specification product are driving this organic Indalex growth.
Ample opportunity for further fill-in acquisitions exists in this fragmented
industry, with over a thousand small U.S. extruders serving their local
markets.

Intelligent Building Systems (formerly Electrical)

Intelligent Building Systems (IBS) covers the Wiring Devices, structured
Datacom cabling, Security Controls and Building Controls markets, which are
converging in the channels of distribution and at the customer. Caradon is
now well represented in all key IBS segments. Growth of 5-8% in the Datacom
and Controls markets is driven by four factors: rapid expansion of data
transmission volumes, rising technical specifications, growing security and
energy management demands, and an increasing trend towards remote monitoring
and control of systems via the Internet.

The recent acquisition of eff eff Alarm and Brand-Rex provides Caradon with a
strong platform in these markets, with particularly strong positions in the UK
and Germany. Benefiting from restructuring and growth in Building Controls,
total IBS sales grew by 8%, and operating profit by 20% in 1999, before the
contribution of the recent acquisitions.

Security Printing Services

While the basic UScheque market remains large and stable, the services we
offer to banks and consumers supporting cheque order fulfilment are growing
rapidly.

Non-cheque sales at Caradon's Clarke American cheque company grew by 36% in
1999, approaching nearly a quarter of total revenue. This is driven by the
transfer of cheque re-ordering to our Call Centres and the Internet. These
services quadrupled last year. This growth, plus Clarke American's ability to
win share in the underlying cheque market, supported the 14% sales and 14%
profit growth reported by this sector in 1999.

END

[nickb] 27/4/2000 09:04

Thanks Chris an interesting post, i have picked some up this morning.

[chrisg] 07/3/2000 23:36

Tucked away in the small print of the Operating Review published yesterday there is some interesting detail.

The largest contributor to the Group’s operating profit is what they call the Security Printing division, which operates exclusively in the USA. But it is in much more than just plain printing and it made an operating profit of £49.4million. It’s the largest division in the Group and yet it is not in manufacturing. Its in business services. The main company in the division is Clarke American (100% subsidiary), whose business is that of helping their clients (mainly banks) strengthen their relationships with their customers. “This includes sophisticated fulfilment processes, including call centre services, internet solutions and direct marketing capabilities” according to yesterday’s statement.

Caradon (via Clarke American) owns and operates a telephone call centre in Charlotte which opened just a few months ago, and has a second call centre in San Antonio which will open within the next three months. These centres are substantial within Clarke American, and are very profitable and cash generative. The centres presently employ 600 staff, which indicates how serious this business is, and the second centre has still to open. More will follow where there is the demand. In any event, Clarke American “is accelerating its growth through continued investment”.

So the company which most people probably only think of as the company once which used to own Everest Double Glazing, actually earns the largest single source of profit from “telecoms̶1;, “internet services”, “direct marketing” and specialised printing using InTouchR technology.

And all of the above ignores the acquisition of the fast growing data-com and tele-com cable manufacturing business, Brand-Rex, announced just this week, whose products are so much in demand for the so-called “intelligent buildings” which office tenants now require.

For some reason, Caradon is not singing this transformation from the rooftops. Perhaps it is to avoid accusations of jumping on a bandwagon. But the facts are there, including the historical p/e of exactly 8. Check them out, because sooner or later the world will wake up to the transformation in Caradon.

Always do your own research first, but don’t miss out, because this one should zing, despite any falls in the market generally!! Even the Chief Executive just bought some more yesterday!