Chamberlin Share Discussion Threads

[energeticbacker] 22/5/2012 12:56

Strongly agree rivaldo.
Looks a good story developing
New commentary at www.investorschampion.com

[cfro] 22/5/2012 10:37

Oh lovely to see you here riv. As you say eps virtually came in at THIS years consensus earnings of 18.6p. I was astonished to see that. Pretty obvious that next years earnings estimates will be upped by quite a bit.

CMH and TCN are a cracker of a pair to hold imo. :0)

[rivaldo] 22/5/2012 09:29

Hello chaps. Bought a few on the dip pre-results and more this morning.

Adjusted historic EPS at 18.3p was almost up to THIS year's consensus of 18.6p EPS!

CMH appear to be superbly placed to address industry changes as regards turbo charging, and with all their businesses pushing strongly ahead, and prospects for the current year viewed "very positively" - strong words from cautious people - I'm happy to be in here.

[lufc5] 22/5/2012 08:58

Took some first thing this morning. Now getting quoted 160.5 when offer is 153p.

[owenski] 22/5/2012 08:53

The growing trend for vehicle manufacturers to make smaller petrol engines often turbo charged should underpin that element of the castings business for some time to come....Its interesting to note that circa 5 years ago 1400cc was the standard small engine size, now it seems to be 1200cc, and with Ford Focus's new 3 cylinder offering and Fiats' Superb Twin Air engine, these modern efficient smaller petrol engines look like the mass produced standards that will be the future trend. Although not all these engines are turbo'd, the growth trends on turbo charging for efficient small engine power and fuel economy useage are increasing.

[cfro] 22/5/2012 08:40

Pub dont open THAT early in France does it IC2!? ;-)

One hell of a set of results imo. Debt substantially reduced, cashflow hughly strong, revenues up and eps came in at over 16p!.....which is just amazing....and all divisions well above pre-recession levels.

Outstanding when you realise all this has been achieved in a world recession. Will be good to see any up to date broker forecasts now which will be substantially upgraded.

[interceptor2] 22/5/2012 07:46

Yes good results but they have been charged appx 12% tax this year to achieve an adjusted EPS of 18.3p. At 25% tax the figure would be 16.25p, which is still very impressive. And net down down to £1.6m now.

I'm out of the door at 08:00, so hoping for some positive price movement.

ic2...

[cfro] 22/5/2012 07:30

Whey Hey !! ;-)

[interceptor2] 21/5/2012 20:04

Just a reminder that full year results tomorrow morning.

Set the alarm clocks nice and early.

Good luck.

ic2...

[interceptor2] 09/5/2012 20:34

choppa, I agree the margins are tight, that is why it will be worth looking at net margin figures on 22nd May, and the outlook statement. Net margins are likely to be just under 3% due to a 20% tax rate at the interims, which is likely to return towards the normal 25% in time.

But they are valued as a low margin business with a low PSR of 0.26 and a 2013 PER OF 7.5. If you look back at 2004/5 the net margin was 4%, before the slowdown. Using a modest future revenue figure of £50m, a 4% net margin would mean EPS 25.2p for a per of 5.6 at todays price.

A fairly modest target imv.

ic2...

[choppa] 09/5/2012 19:49

But those margins are tight ic2 would you say. For a specialist company would feel more comforatble with some extra margin to play with.

[interceptor2] 08/5/2012 17:46

I was just looking at the net margins here, and thought it would be worth seeing where we are with valuation. I think these are looking rather cheap at 142.5p. The net margins at the last November interims were 2.75%, so we are probably looking at 3% for forthcoming results. EPS consensus forecasts are 14.8p.

So a fair price range should be between the range in 2003 and 2004 imo. About 140p to 191p now, and higher after this months results. We certainly seem to be at the bottom of the range, which I believe has offered a good opportunity to buy back in.

........2002...2003...2004...2005...2006...2007...2008...2009...2010
Net
margin..2.4%...2.6%...4.3%...4.0%...n/a....1.5%...n/a....n/a....0.25%
SP
High....220p...177p...205p...260p...230p...214p...195p...80p....120p
Low.....155p...130p...150p...190p...190p...185p...70p....40p....50p

EPS.....9.0p...9.6p...18.0p..22.5p..neg...8.0p....neg....neg....1.3p

ic2...

nb.. 2010 Adjusted net margins = 1.25% for EPS of 6.7p

[choppa] 05/5/2012 20:23

Came across this article which follows the discussion above...



I guess its also a play on the oil price and and government subsidies on hybrid vehicles and whether it will ultimately change consumer habits away from the petrol forecourt into new technology.

[choppa] 05/5/2012 19:49

Thanks electronica thats very enlightening will take a look over the balance sheet and see how it looks.

[electronica] 05/5/2012 12:05

choppa

I don't know of 1 European auto company that still majorly casts metal in house. Ford closed its last car parts foundry 20 years ago, all 3 of the Japanese implants (inc the Toyotoa & Honda engine factories) buy in castings.

Most of the bought-in castings come machined from their suppliers - although Ford still do machine engine block & cylinder head castings for their 4 million per year UK engine build programmes.

You are proposing a complete reversal of the casting (and sintering) outsourcing trends of the last 30 years - get real! As you can see from the CMH reports they supply castings to the turbocharger manufacturers (e.g. IHI & Borg Warner) who supply complete turbochargers to the likes of Merc & JLR. Auto companies have been (almost) mere assemblers of major sub assemblies for years - they have better uses for their scarce capital & their even scarcer skills than making parts. Best to leave the tricky business of complex castings to specialists like CMH - via their Tier 1 sub-contractors.

As far as electric & hybrid power trains obviating the need for turbochargers - don't believe everything you read in the Daily Mail - it ain't happening yet & we're up to 10 years off seeing major electric/hybrid market share at the top end of the market. Anyway, I think that you will find that CMH supply the castings for the pancake motor electric wheels supplied by the GKN/EVO JV (that's 4 wheels per vehicle vs 1 turbocharger impeller).

[interceptor2] 04/5/2012 18:47

I bet it feels good to be holding these again cfro :o)

Below I will repeat an extract from last years results, which I believe shows how this sector is very much a specialist area with only four companies able to make turbocharger units in Europe.

ic2...

"In recent years we have focused our automotive activity on turbocharger castings, a high growth area that currently represents 21% of Group sales. As one of only four specialist foundries in Europe with the technical capability of supplying these castings for turbochargers we are in an excellent position to benefit from the increasing trend for car manufacturers to apply turbochargers to petrol engines. This trend is being driven by the need to comply with emissions regulations and to provide an indication of its scale, in 2010 some 10% of petrol engines were turbocharged however, by 2015 approximately 80-90% of car petrol engines are expected to be turbocharged causing the existing market to grow by over 50%."

[cfro] 04/5/2012 17:41

I agree electronica. Simple reading of what they do reveals that they are a very specialist co indeed !

[electronica] 04/5/2012 16:44

"I do not see how a casting can be a specialist and technical area with barriers to entry."

Why do people feel a need to display their complete ignorance in public?

[choppa] 04/5/2012 15:16

Isnt castings for turbo chargers part of the production line that can be easily replicated by the car manufacturer? I do not see how a casting can be a specialist and technical area with barriers to entry.

[cfro] 04/5/2012 08:40

Made a small purchase IC2. :-)

[interceptor2] 03/5/2012 15:48

The reason I am excited by the turbocharger market is due to the extract below from 2011 full year statement.

ic2...

In recent years we have focused our automotive activity on turbocharger castings, a high growth area that currently represents 21% of Group sales. As one of only four specialist foundries in Europe with the technical capability of supplying these castings for turbochargers we are in an excellent position to benefit from the increasing trend for car manufacturers to apply turbochargers to petrol engines. This trend is being driven by the need to comply with emissions regulations and to provide an indication of its scale, in 2010 some 10% of petrol engines were turbocharged however, by 2015 approximately 80-90% of car petrol engines are expected to be turbocharged causing the existing market to grow by over 50%.

[interceptor2] 03/5/2012 15:43

Electronica, Yes the JV should contribute to a strong final result, plus the door closer business brought from Jebron in February 2011 have been performing strongly, and will make a full 12 month contribution.

But it is the turbocharger market that has always been the area I see the most potential.

ic2...

[electronica] 03/5/2012 15:25

IC2

The big new opportunity with CMH is the new Merc / Japanese JV making turbochargers for Merc.

The next set of numbers that we see will include revenues from these new contracts for the first time - & this business is going to be very significant for CMH as it builds up over the next 2 years & beyond.

[interceptor2] 03/5/2012 13:08

Brought back in today with an initial position ahead of results on 22nd May. CMH have CAT and JCB as customers, who are both reporting record business. Also I read somewhere that BMW reported strong numbers this morning, not sure if CMH supply BMW directly, or maybe via a OEM. But they certainly supply goods to this strong sector.

ic2...