||EPS - Basic
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MS International Share Discussion Threads
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I think there's only Cavendish Asset Management Limited with 16.6% that have a notifiable holding.|
|Who are the institutional holders here ?|
|Perhaps the ultimate contrarian investment :-)|
|We struggle to understand why anyone (other than the Board) would want to hold shares in this business: Directors remuneration is excessive and long standing managers are hard to replace.
It looks a real shocker to us that should be nowhere near the stock market!|
|Heading past 200?|
That's the most positive I've ever known Michael Bell. Four mentions of the word 'growth' and only one 'challenging'!|
|I made a small top up yesterday (more by luck than judgement).
1 MSI has been a dog and not joined in the post Brexit recovery.
2 The weak pound must be beneficial.
3 Defence stocks have moved up on the back of Trump.
4 The tick up in long term interest rates reduces the pension deficit.
PS I either had to buy a few more or ditch my holding)|
|No. Interims in December.|
|Are results imminent guys please?|
I thought the results were a mixed bag, good to see the company investing for the future and the dutch acquisition being ahead of expectations. The positive (for MSI) outlook statement is also very welcome.
Whilst as you point out defence is ahead of H1 2014, it wasn't close to matching H2 2014 which may have disappointed some investors. We do know though from the outlook statement in the finals that they expected defence to have a good H2 this year and this business does have excellent visibility.
The current global terrorism & military threat whilst unsettling for everyone is clearly a tailwind for MSI.|
|Why are investors so pessimistic about this company this morning? Steady, if unspectacular progress, has been made overall, with Defence revenue up by £2.6m in the half year and Petrol up £1.5m. Admittedly, Defence was not profitable (but close to breakeven) and Forgings turnover is down by £1.7m producing an operating loss of £0.3m in that division.
Plenty of investment in the future going on (CAPEX £1.19m, 2014H1: £0.31m)
Plenty of cash £11.45m, and no debt.
Plenty of experience in coping with cycles in these three industries.
Was the market expecting a big bounce back already, and is now disappointed?
|While the headline numbers are relatively modest I've never seen them so positive in their recent outlook statements:
Clearly, the Group is ready and in a good position to take advantage of any opportunities presented and we look forward to the future with optimism.
'Defence', we are predicting an improvement in the level of activity for our business in the second half of the current year, even though markets remain constrained.
We expected a continuing difficult environment in the global defence market and in my July AGM statement I highlighted that it was unrealistic to anticipate that trading would be any easier than the previous year.
Whilst the markets of our largest division, 'Defence', are contending with greatly reduced expenditure budgets it would be unrealistic to anticipate the current year being easier than last year.
And having sat on their cash pile for many years they now seem to be investing it:
Innovative, technology driven, internationally competitive product development programmes continue unabated at 'Defence', alongside the recruitment of additional engineers, business development personnel and the upgrading of previously underutilised manufacturing facilities...
Previously reported plans to expand 'Forgings' capacity and capability in the United States, have progressed to the stage where we have acquired a property to develop, which is conveniently close to our existing over-stretched premises in South Carolina. Making this major investment in a much larger, purpose designed and superior equipped facility will enable the division to achieve levels of business beyond our current abilities.
Given how cautious they have been in this area then it would be diffucult to make an argument that they are doing this rashly. It seems likely that these investments reflect real demand in their markets. It also removes one of the critiques of an investment here: that they are very cheap on an EV/FCF metric but were just going to sit on the cash and not return excess capital.|
|Potential further business
|Decent article - Opening paragraph
'It's not often that you come across a company offering a rock solid cash rich balance sheet, an attractive dividend, rated on a single-digit earnings multiple after stripping out net funds, and with the risk to earnings to the upside. But that is the compelling investment proposition offered by Doncaster-based MS International (MSI: 180p), an Aim-traded company with a market capitalisation of £30m.'|
|A sudden price surge at 12pm can only mean one thing:
Tipped by Simon Thompson
|1 of 9 companies included in a Investor Chronicle Free Cash Flow King screen.
MS International (MSI), an engineer with interests in defence (37 per cent of revenues), forging (33 per cent of revenues) and petrol station superstructures (29 per cent of revenues), has just endured a tough year in which EPS dropped from 14.6p to 8.2p. However, things are not quite as bad as they first seem, as reflected in the fact that MS held its 8p full-year dividend. Indeed, considering the group finished the year with record net cash of £17.2m (60 per cent of the market cap), it looks like it can comfortably afford the payout, which cost £1.3m last year. Importantly, trading has also started to look up for MS.
A weak defence market coupled with investment in product innovation weighed on last year's result and pushed the defence division into the red. But MS saw a strong pick-up in trading in the second half, which looks like it should continue into the current year. Indeed, not only is the defence market looking somewhat stronger but the first of the new products the company has been investing in has been well received and more new product launches are in the pipeline. Meanwhile, management believes trading at the forging business should be stable whilst the petrol station superstructure business could benefit from a trend for big oil companies to sell their retail operations to independents. Even if earnings stayed at last year's depressed level, the shares' cash-adjusted PE would be just 8.5 times.|
|even after today's rise they look cheap - 28m market cap with 17m cash leaves 11m EV. They had a bad year yet still generated 1.5m profit, 5m OCF, 4.2m FCF.
Outlook more positive, investing in future products to launch over the next year. Earnings-enhancing (well it would be hard not to be with today's interst rates) acquisition at least partially justifying why they are holding more cash.
Still could do with some further actions to put the cash pile to better use - tender offer, buybacks, special divi etc. but overall pleased with the results today.|
|Early birds certainly catching the worm here after an improved H2 and the most positive outlook statement I can remember in a while.
Dutch Acquisition adds scale to the forecourt business.|