|Just be careful of the pension liabilities.
|CAR have just been tipped as "stunning value":
"A steady stream of contract successes from the automotive sector looks set to keep earnings at Carclo (LSE: CAR) surging in the years ahead, in my opinion — here’s why!
Carclo advised last month that at its LED Technologies arm, its Wipac supercar lighting products keep on making a huge impact with the world’s car manufacturers, with the business noting that the segment “continues to win new lighting programmes within the low volume sector”.
And Carclo added that it “remains focused on securing a further mid volume programme in the new financial year, which will support the anticipated strong growth of this business”.
But the huge potential riches afforded by the fast-growing premium and supercar segments are not the only reasons to get excited about. Carclo’s Technical Products division is also gaining momentum, helped by shrewd bolt-on buys like Precision Tool & Die in October. And the West Yorkshire business is looking to ride this wave by turbocharging its manufacturing capacity in China and India.
The City expects Carclo to keep its record of double-digit earnings rises trucking long into the future, and predict a 13% rise in the year to March 2017 to be followed by increases of 13% and 21% in fiscal 2018 and 2019 correspondingly.
And these projections make the engineer stunning value for money, in my mind. For the current period Carclo deals on a P/E ratio of just 12 times, and the multiple topples to a mere 10.6 times for next year and 8.8 times for 2019.
Furthermore, sub-1 PEG multiples through to the close of 2019 illustrate Carclo’s stunning value relative to its growth prospects."|
|great stuff illis. Agree with pension fund - when the market wants to ignore the pension fund it is extremely good at that. Burned myself often on that over the years.
CTP sales were £70 last full year x 1.26 = $88 so yes not way under, nudging or at depending on exchange rate and growth.
Glad you saw some of the same things in the CTP presentation, reassuring.
10% margins not impossible, just a refrain I've got bored of, but that doesn't mean they can't get there. But on the sales per emp in UK and US they'd be doing well to get beyond.
Still confused on PTD this end. Will look again, but I've looked twice and both times found no existing overlap between their output and CTP's output, but may be being thick.
|Further to my blog 309, CAR is slowly but surely getting into a new uptrend, which will show more when the 140p resistance level has been broken through, and become support. I'm tempted to add, but don't want to unbalance my overall portfolio; though a few more would be ok, I guess. For others, I say buy or add now before the price jumps that much higher, which it will before long, IMHO.|
|RNS - Henderson have significantly increased their holding, buying another 1.25m shares or so. They now have 9.24m shares, or 12.66%:
|Up again today to 141p, with a buy at 143.56p earlier on (the thread header chart is incorrect as usual - it'll correct when an AT trade is put through).
Excellent posts illiswilgig. I would only add that the new facilities for CTP in India, China, the USA etc are all customer demand-led. This is the likes of Siemens etc saying they want additional and local production capacity, so it should be a "relatively" easy matter for CAR to fill these facilities with added production.|
one more thing - my main reason for being positive at the moment and toping up at 123p is that I think the pension deficit is a red herring.
My understanding is that the IFRS pension standard is oversimplifying and by relating the whole pension liability to the corporate bond yield at each set of results is way off beam under current circumstances as the pension fund is not wholly comprised of corporate bonds.
As Albert Einstein is reputed to have said 'Everything should be made as simple as possible, but not simpler.'
Although I miss my dividend cheques I do expect the cashflow being reinvested in the company to result in stronger share price growth in the medium term as it moderates debt.
I think the distinct lack of any desperation on the companies part to restart the dividend rather proves my point.
|such a good finish to the day..could it be an insti taking a position for a decent return as the brokers call it. gla|
|hopefully has 160 in its sights on this next leg up...|
|Not me rivaldo :)|
|Hello - 1.3m shares just bought at 140p.....|
|great news for me Rivaldo.from a cool Malta
sorry two similar posts.Ipad trouble.bahhh|
|great.nice rise on a cold mixed day in Malta.|
|Nice move up today, with buying at 139p now.|
|New note from Edison - they go for 11.6p EPS for the year about to end, and 13.1p EPS for the coming year:
Note the potential for upgrades assuming current currency levels continue.
There must be a strong chance of such upgrades:
"Carclo has announced that H217 trading remains strong and the outlook for the full year is in line with its expectations. Growth is being driven by the two larger divisions, Technical Plastics (TP) and LED Technologies, while the Aerospace division is experiencing stable trading conditions. We leave our estimates unchanged, but note potential currency upside should foreign exchange rates remain at current levels for the remainder of FY17"|
|Its forecast to grow at 13%.
13x13p eps =169p, giving a PEG of 1.
If growth speeds up, then a higher p/e, if it doesn't there's no bargain to be had. Hopefully just reliable modest growth.
There may be something in there which has some potential to accelerate growth, I don't know.|
|illis - thank you. Forces me to put some flesh on mere assertions and half-memories. So here’s a perhaps colourful longer essay putting the case for the prosecution; you are invited to cross-question.
The first key slide:
Technical Plastics - Strategy
• Continue to develop medical focused global business
• Leverage existing customer base for growth
• Improve customer perceptions via: - increase in scale and capabilities - addition of value add services - improvement in site aesthetics
• Focus on automation development to improve: - efficiency - customer data capture and product conformance - business ‘retentionR17;
• Expand the business whilst leveraging infrastructure, management and technical teams
• Retain profitable and sustainable non-medical business
1 & 2 are boilerplate
3 is new, and states that from the larger customers’ pov they are sub-scale, with a dull range of non-value add products, produced from sub-par sites that put off the major customers.
4 is new, states that they are over-manual (hard to argue, look at sales per employee next slide), don’t know their customers well enough, and could do better on customer retention
5 half boilerplate, half recognition that margins will never improve unless the marginal sale has lower ‘central’; costs
6 I can’t recall what these are, but states they are going nowhere
(Their oft-repeated target margin of 10%, which they never get close to, has always told me CTP is a dull business even in their own minds.)
Next slide - does $100,000 & £100,000 sales per employee in the US and UK sound ok? Not great, to me.
Next slide - typical competitor has sales > $500 million (I would think in many cases rather more than that). CTP is way under $100 million. As suggested everywhere in the presentation this scale issue constrains everything,with the only plus being nimbleness, and an odd but telling plus that they are perceived as being larger than they are.
Next slide - we know all this
Next slide - PTD acquisition. This is still as clear as mud to me, my bad I’m sure, but I THINK I understand that they make the machines that CTP use, so they have bought a supplier, and I don’t understand why. Quite different business.
Next slide - China! Ok, but. Czech, India and China also all have excess capacity (we can see that from sales per employee previously too), so winning sales is the issue not expanding facilities to accommodate demand inflow, which repeats the first key slide message. “Vision” is to treble the size of CTP and get to 10%+ margins. I’m sure that’s the hope.
That’s all from me on CTP
Firstly, why oh why so many pictures of Bentleys etc, they may as well pop Kim Kardashian in there and put some lights on her. Overkill.
“Wipac are the only remaining OEM lighting designer/manufacturer in the UK” What? One of the largest car (and luxury car) manufacturing countries in the world, and they all buy their lighting from somewhere else do they? They certainly have infinite choice where to buy it from.
The interesting slide is the payment profile one. They have always previously said that the early years of a contract are low pay, lower profit, but then the gravy runs for a few years. I was expecting therefore some gravy in the last 18 months, certainly the last 6/12, and was disappointed, also I recall the words re forecasts became less bullish?. But couple my dislike of motor OEM suppliers and your words, and it probably isn’t very exciting anyway?|
|Underlying EPS shows terrific growth - 123% growth in 4 years:
to Mar'18 - 12.95p (forecast)
to Mar'17 - 11.45p (forecast)
to Mar'16 - 10.1p
to Mar'15 - 7.9p
to Mar'14 - 6.1p
If it weren't for the previous management's forays away from the core business, plus the dividend issue (which most really aren't bothered about due to the immateriality), then given such growth CAR would be trading on a P/E of 18-20 or so, against the current 10.2.
The profile of the business is that of a growth business expanding worldwide at the express wishes of its major customers who wish to have locally sourced, high-spec production from a reliable provider.|
|N+1 Singer reiterate their Buy with a 161p target price:
|I'll read it again tomorrow, but I think it was more than that, in that they set out all the things they needed to do, or do better?|
|I've just read it as an 'as you were, until further notice' statement.|
|just read the 31/1 presentation.
CTP really isn't a great business, ie low p/e quite appropriate, and credit to them in a way for outlining so many issues. Dull growth, dull margins, very hard to see breakthrough. Essentially very sub-scale versus competitors, and scale matters in all sorts of ways.
Lighting better, but I've mentioned my disappointment with recent numbers and near term targets before, I had expected higher growth. 've never liked motor OEM businesses anyway.
Cash flow - positive in the future, like they always say.
Pension - nothing to make one much more cheerfull.
Nothing in there to make me revisit from the bull side.|
|Hey yump, how are you? (We differ on the rationality of their gung-ho-ness back then!) x|
|Someone rolled a delayed buy with the 2 trades that equate the 10k sell added together,,at the bottom so we drop..bahhh after such a good RNS..imho.gla
will hold and add as peel Hunt says ,£1.90p will do me tommy a near 50% rise,bring it on.....|