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Molins Share Discussion Threads
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|Cheers Joe. I've just learned from you. Thanks for the feedback.
I'm hoping Molins can now improve the trading situation as this prior pension niggle looks fine once again and hopefully with the rate cycle turning upwards won't come up again but as you suggest possibly relieve them of any future funding commitments which can be used to invest in the company instead.|
Just to correct one point in your post - the pension scheme surplus/deficit included in the balance sheet numbers is based on the yield on corporate bonds not gilt yields. The corporate bond yield is higher than the gilt yield because they are higher risk but the 2 rates do tend to move in tandem.
Having said that I look at how the 10 year gilt yield is changing to get a feel for what is likely to be happening to the pension scheme funding position because I find it much easier to get up to date and historic numbers for the gilt yield (if anyone knows of a free website that shows the relevant UK corporate bond rate I would be grateful!).
As far as I am aware it is nigh on impossible for a company to get any pension fund surplus paid back even if it is enormous. If all parties agree, it can stop paying contributions if the surplus is considered to be more than adequate to meet the pension obligations, but the surplus has to be massive relative to the potential obligation for this to happen (SIXH is a company which is in this happy but unusual situation).
I'm not trying to nit pick with your post. I just thought that if anyone compares the current gilt yield to the discount rate used to calculate the pension scheme balance sheet position in the last set of accounts they will think that the next results will show a large deterioration.|
|The Pension hole could now be a surplus.
The liabilities are calculated from Gilt Yields at the time and I'm no expert on why it's done this way, but Gilt Yields have rallied from the historic lows of that time.
It's possible the next valuation may show a surplus and if Government bonds continue to fall in value and yields rise, then so will the pension surplus in future valuations.
Now, if the company can have any of that surplus paid back to it somehow, that would be very interesting, but I don't know if that is possible. At least i'm quiet certain from how I understand things that there is now no black hole based on current gilt yields.
Please explain if i'm mistaken. cheers.|
|As a holder I am very pleased to see the unexpected rise today on no discernible information. The reason for the rise, we can only speculate. My guess is that with the fall in the pound it has become a potential takeover target. The Chinese are still keen smokers and possibly see the company as a viable prospect. Who knows, I am just guessing, I have no inside knowledge.|
|Rising ! What's the story ?|
|MASSIVE PENSION HOLE
Molins PLC, the international engineering and services company, announces the following trading update for the financial year to 31 December 2016.
Trading to date in the final quarter has been materially lower than expected, partially due to an unfavourable sales mix and a number of deliveries delayed into the early part of 2017. As a result the Board is revising downwards its expectation of full year performance.|
|there is the 5% plus yield?
|The lad at ED thinks they might. But confidence in this is so low that there are simply no buyers at any price. The forward multiple on those forecasts would be 3x.
This company lost its way years ago and has not got it back............|
|Molins delivered adjusted EPS of 22.4p (with 5.5 divi) and 15.1p respectively for 2014 & 2015 - so if things were ever to return to normal.....|
|With hopeless management there is little hope of a business turnaround so it seems to be a binary bet on the pension being sorted out or not. Could be interesting.......|
|Pathetic stuff from Molins as usual. The list of excuses is never ending. The dope at Equity Development is paid to write positive copy. He thinks Molins will make 18p of earnings in 2018-clearly no one believes it.|
|New research out this morning from Equity development
Evil talks about MLIN|
|Yes I have to agree that this has the look of being a train wreck. Clueless hopeless decisions over many years........don't they have any property left?|
|Anything smoking related is now a big risk ... even efags as their toxicity has not been evaluated properly as yet
Major surgery now needed by MLN or else the chart looks terminal
Such surgery should have been carried out over 4 years back or very soon after efags made their debut
Not much left now with which to raise lolly for a complete change of tack|
|Nearly all my shares are powering ahead except this one. Surely they are a gainer from sterling. You might have thought they would be seizing opportunities to increase export sales.|
|I think the shares will be sub 20p by the time this strategic review is done.|
|I share your pain on this one meijiman as I am nursing a 40% loss and it is by far the worst performing share on my limited portfolio. I am still going to hold as the new boss may bring about an improvement and let's hope the cautious Half year results are just that, a bit too cautious. At least it still makes a profit and pays a little divi, so not a complete basket case. Some you win in this game some you lose.
I bought the share for the flimsiest of reasons. As a teenager I used to go past the factory on the bus from Aylesbury to High Wycombe and see the gleaming machines in their showroom window and thought they looked pretty impressive and wondered what they did. Now I know. Nostalgia is not the most sound method of stockpicking!
New investors might like to view this as a recovery play and take a punt. At these prices, if the positive story goes right you could do well. Analysts value it at 90p. Good luck.|
|Got to feel the management of this basket case company has been appalling. Let's hope the new man does a better job than the deadleg he took over from. I think for most people this is a writeoff-if you havent exited by now there may be no point in selling.Are there any reasons to think this wont be 50p in a year's time. Answers on a postcard.....|
ED's summary was this (on Aug 24 with the share price then 61p):
Better H2 expected despite tough conditions
Aug 24, 2016
This morning Molins (MLIN) reported Interim results in line with management expectations, with sales from continuing operations of £35.0m (2015: £39.5m) and an underlying profit before tax from continuing operations of £0.1m (2015: £1.3m).
As in recent years, the Group's full year trading performance will be significantly weighted towards the second half.However today Molins has stated that it is experiencing continuing delays in receiving orders and is therefore taking a more cautious view of the short-term trading outlook, and has revised downwards its trading expectations for the current year. Consequently going forward, regardless of the usual Q4 seasonal bounce, we have downgraded our 2016 and 2017 PBTA forecasts by -28% and -6% respectively to £1.9m and £3.2m.
The new CEO, Tony Steels, appointed in June, has started a review of the strategic direction of the business with the aim of maximising growth, economies of scale, efficiencies and operating margins. This is a complex exercise involving many moving parts, and will take approx. 3-6 months to complete with conclusions set for late this year or early 2017.
Given the tough short term outlook, we reduce our target price from 120p to 90p a share. At 61p, we rate the shares as good value, trading at a 19% discount to net tangible assets (75p) and on modest EV/EBIT and PE multiples of 7.7x and 8x respectively, whilst also offering a 4.5% prospective yield (2.7x covered).|
|Bartle - Just reading the doc would be simpler and more accurate|
|Would you mind giving us a précis of what ED are saying today, Brummy?|
|New research out today from Equity Development