Plastics Capital Share Discussion Threads

[bigbigdave] 26/4/2012 08:18

Joined you chaps this morning after reading the thread last night.
Does seem a very interesting little company.

[boros10] 26/4/2012 07:20

I attended the Aim Investor Focus meeting yesterday. Five companies presented but it was Plastics Control which stood out for me. Management came over very well; intelligent, quietly competent and honest. Good operating margins, good returns on total assets (less purchased goodwill), strong free cash flow and a low valuation make it a compelling opportunity.

The only real negative is the wide spreads which leaves me having to look at an ugly loss the moment the deal is done. At this low valuation I'll just have to accept the fact that the market maker is sharing some of my upside.

I have taken a small position and will add on further research.

[davidosh] 25/4/2012 17:07

TB is a class act and the mainly american customers really like him and have belief in him delivering to time schedules and constraints which is very important too. The same investor got me interested in PLA but LOQ was eight years ago.

[interceptor2] 25/4/2012 15:58

Thats funny I wondered if that might have been you, because the LOQ CEO seemed to know you. The chap who was aggressive about LOQs need to diversify to other areas, it did seem uncalled for. But Tom Burnet handled him very well, asking him if he had also enjoyed the 100% share price gain in the last year.

Very impressed by Tom Burnet, he has great enthusiasm imv.

ic2...

[davidosh] 25/4/2012 14:56

ic2....you should have said hello ! I was the one who asked two of the questions to the LOQ CEO but certainly not the guy who was rude and aggressive to him...lol

[interceptor2] 25/4/2012 14:29

Good to see you here cfro, I agree that there does look obvious value here, and a quality UK company expanding by exporting their products. Worth a look at the video on the link in my previous post, really interesting overview of company products imv.

Finnished my research into REDT last Friday, and now on my watchlist. Might join you there in the future, you never know :o)

Davidosh, any feedback would be welcome, I wish I could attend some of your presentations, but I don't live in the UK. But did manage the recent Pro-Active presentation with GBO and LOQ, so hopefully I will have an opportunity to attend some more.

ic2...

[cfro] 25/4/2012 13:27

I would like to extend IC2's thanks davidosh. I too have bought a small holding. Had to pay 82p as i was a little late and missed this mornings TS and because i knew absoloutely nowt about PLA i wanted to check some details first.

However even on a offer price of 82p and despite todays sharp upward move PLA still only trades on a forward multiple of only 6.8. A quick look at the long term chart and one can see that the spp has been in consolidation mode and the old highs of 96p (still only a pe of 8 even at that price) should be surpased soon.

IC2, have you bought into REDT yet ? It does look interesting.

[davidosh] 25/4/2012 13:05

ic2....no problem and very pleased you like them. The company presentation was at AimFocus at around 11am today so hopefully there may be further interest after that. I have a very busy week so could not attend but there may be some feedback later...five companies presenting.

I am hoping to interview the directors and arrange a further presentation after the final results in late June or early July. They will be in a closed period until then anyway.

[interceptor2] 25/4/2012 12:13

I did buy an initial position here today after a very solid trading update imo.

Thanks to Davidosh for highlighing these on another thread. I had PLA on my watchlist for over a year now, and hadn't brought before because of high debt and wide spread.

But cashflow is strong and debt is falling quickly now, and the spread wasn't too wide this morning.

Just had a look at their excellent video on the company website, that explains really clearly their products and markets.

Worth a look imv.



ic2...

[cerrito] 25/4/2012 10:22

glad to see that at least this announcement has had an effect on the price

[cerrito] 03/4/2012 09:51

Interesting that the combined effect of the Cenkos note and yesterday's announcement was a yawn; note in the half year to 911 ballbearing sales were £5,792K out of total corporate sales of £16,255K so this is a key division.

[electronica] 29/3/2012 06:53

Nice bit of positive comment from the house broker today ..... courtesy of the UK Analysts' newsletter ...........

"Cenkos Securities retained its "buy" stance on Plastics Capital* (PLA) with a target price of 110p. Having generated an average of 4 million pounds of free cash flows over the last two year, the broker expects the plastics and rubber products manufacturer's net debt to fall to 11.2 million pounds by the half year, from 19.6 million pounds in March 2009. Cenkos noted that the firm has placed greater focus on geographic expansion, with 25% of revenues now coming from emerging markets. The broker added that on a prospective earnings multiple of 6.4 times for the year ending March 2012, the shares trade on a 30% discount to the peer group average. The shares were unchanged at 68p."

[charlesdar] 20/3/2012 16:52

Hi David
Are you still bullish on this stock? Thanks Charles

[davidosh] 01/3/2012 13:52

Plastics Capital will be appearing at this event in April..



Where and when
Barbican Conference Centre, London, EC2Y 8DS on Wednesday, April 25th.

Presentations begin at 10:00 a.m. Registration from 09:30.

[cerrito] 17/1/2012 18:15

From the Unquoted-analyst
17th January 2012



Analyst: Steven Moore
Email: [e-mail]
Tel: [phone]

Plastics Capital - "In-line" Trading Update; reiterate 'Buy' at 68.5p, Target Price: 100p

Key Data

EPIC

PLA

Share Price

68.5p

Spread

66.5p - 70.5p

Total no of Shares

27,542,532

Market Cap

£18.9 million

12 Month Range

60.175p - 96p

Market

AIM

Website

www.plasticscapital.com

Sector

Chemicals

Contact


Nick Ball,
Finance Director,
020 7326 8423


Plastics Capital, the plastics products group focused on proprietary products for niche markets, has announced it "continues to trade broadly in line with market expectations" and that, despite a weak economic environment, recent new business successes give it confidence of making further progress in the year ahead. The announcement gives us confidence that the forecasts from our November update remain valid and we remain of the view that the current valuation the market is ascribing the company fails to reflect what is a proven robust, cash generative business.

In a trading update today Plastics noted new business wins are helping to maintain sales levels, that it should meet expectations over its final quarter and that the sales pipeline remains "strong". The company particularly emphasised that its bearings division has recently converted a major design project to manufacture plastic bearing devices for a new customer based in the USA - a project "expected to be worth over £2 million", with sales expected to commence in 2013 and gradually build. The company additionally noted that, with working capital and capital expenditure being prudently managed, its cash flow continues to be strong and that its debt is falling ahead of expectations.

Though the company is clearly not immune from the current chilly economic winds affecting the UK and some of Europe's major economies, a business model based on significant engineering know-how and automation, and currently seeing approximately 65% of sales being exports to more than 80 countries worldwide, provides some degree of insulation. The company's resilient cash performance is shown in our expectation of a further material reduction in year-end net debt - and the debt position remains comfortable; the company's results for the six months ended 30th September 2011 showing net bank interest payments being covered more than 9 times by underlying EBITDA.

During Plastics Capital's year commencing 1st April 2012, we see net debt being further reduced and the company re-embarking on a growth path in terms of revenue, EBITDA and earnings per share - as shown in the table below. For now, and as per our 30th November note on the company's interim results announcement that day, we continue to consider a 2012 EV/EBITDA multiple of 7 times as an appropriate immediate valuation - suggesting a share price of 100p. However, on the company's post year-end update (historically mid-late April) emphasising continued robust trading, we will likely be increasing our target price as the focus moves to that trading year. With the shares presently trading at 68.5p, we reiterate our stance of buy.

Forecast Table

Year to 31st March

Sales
(£ million)


Adjusted
Pre-tax Profit
(£ million)



Earnings Per Share (p)


Adjusted EBITDA (£ million)


EV/EBITDA (x)


Net Debt (£ million)

2010A


26.69


2.45


9.62


5.06


7.2


17.54

2011A


33.51


3.78


12.02


5.76


5.4


12.18

2012E


31.5


3.8


10.2


5.3


5.4


9.7

2013E


33.0


4.1


11.2


5.4


4.9


7.4

Source: Growth Equities & Company Res

[cerrito] 17/1/2012 15:22

As you say Electronica pretty good stuff and it is a reflection of the AIM market that there has been no price reaction and indeed only 1752 shares have been traded so far today.

[electronica] 17/1/2012 07:21

Good IMS

Debt reduction in advance of expectations - that's great & the cloud that has brooded over PLA for a couple of years seems to be now completely lifted.

Trading in line with market expectations - as the company's own broker is predicting 10.5p eps for the year to end March we can expect PLA to meet this. A forward P/E of less than 6.5 is far too low. PLA should be trading on a forward P/E of at least 9 with the debt problem now in the past.

FY2013 indication of significant growth is v encouraging. P/E of 9-10 on FY2013 eps of 12p+. That's my call - indicating a share price of at least 100-120p by this time next year. Loads of scope for beating this too.

[cerrito] 30/11/2011 23:06

In the circumstances nothing to complain about in these results even if the very good cash flow in the first half was somewhat flattered by the Skor sale. Good to see a company reducing debt and starting to pay dividends, however modest and trading at a current pe of less than 7x.
I am very happy to hold though given all the uncertainties am not anticipating there will be a rapid increase in the share price and am not immediately planning to add.

[glennborthwick] 30/11/2011 22:53

solid results seeing current environment

[windass] 30/11/2011 15:32

Good comment from GE&CR today

[mr hangman] 12/10/2011 11:08

No Interest at all...

[davidosh] 12/10/2011 11:06

For those interested in meeting management at PLA they should be in attendance today at the Growth Company Investor Show at the Barbican as they have a stand there according to the GCI website. It helps investors understand the business and with the recent trading update released that will allow open discussion on the information.

[bozzy_s] 05/10/2011 02:58

Now LOQ is fairly valued, maybe even over-priced, are you looking to change your mind mr h and go positive?

[bozzy_s] 05/10/2011 02:57

re 207 - there's a reason to buy PLA! LOQ went from 5p to 200p. A few of these investors made HUGE profits. And mr hangman made the biggest wrong 'short' call I've ever, ever seen!

[davidosh] 04/10/2011 18:11

hangers....'this should be bust in a year' ? What will exactly and can you explain how ?

Coral Products is a tiddler going nowhere. That is not to say that PLA may eventually feature on the radar of a larger player at some point. I am quite happy with how things are going.