|Received the proposal for the share buy back today. The offer is for 42p a share.
Not a bad end.|
|I have received the year end accounts today - only skimmed through.
I'll have a better look later. The company is doing far better now,
thanks to some reorganisation, and savings made here and there.
It appears they are looking to buy back the outstanding shares. Who
knows how the shares will be priced? With no market to provide open
demand, they could just pick an amount from the air.|
|Is there any news on Turbo Tech shares?
Do we receive a share certificate, or is this a write off?
Thanks in advance to anyone who replies to this.|
|Voting numbers for the AIM delisting resolution:-
77.7% FOR (75% required),
90% of shareholder votes were cast, meaning that 10% did not or could not vote.|
|What are the chances of the de-lising getting approved? AIM rules mean that they need 75% in favour to de-list but it seems that only 60% of shares are in the hands of big players. Or maybe this is just a cynical ploy to lower the share price so that Execuzen can grab a bigger slice of the company when then loan is converted? Either way something dodgy is going on and I'm becoming more and more wary of investing in any AIM-listed shares.
I'll be voting against the de-listing but the worry is that this is just "Round one" and another attempt will be made to de-list once the big players have increased their total holdings above 75% on the cheap. I still feel that Turbotec is a good business but, as is all too common on AIM, seems to run for the benefit of its directors and their chums, at the expense of small-shareholders.|
|Sharesoc advises members to vote against the delisting
Posted by ShareSoc at 09:19, March 24 2013.
Turbotec Products delisting
Turbotec Products (TRBO) is an AIM listed manufacturer of heat exchangers, mainly for residential heating systems, air conditioning, and domestic swimming pools. The company has factories in Connecticut and North Carolina, and the majority of the directors are based in the US. Activity is dependent on US house-building, so business has been tough in recent years. Turbotec has nevertheless been profitable in every year since listing in 2006, although profits fell substantially last year. The latest accounts to 31 March 2012 show earnings of only 1c, but tangible assets of around 90c (60p per share).
Prior to the announcement of the delisting proposal, the share price had been static at around 20p for the past six months. After the announcement on the 22nd March the share price halved within minutes.
The announcement does not outline any strategy for future returns to shareholders by way of dividend or trade sale of the company. Nor does it offer any reassurance about future governance arrangements. The reasons given for delisting are that:
- there is limited liquidity in the shares;
- the company's market capitalisation has become disassociated from its inherent value;
- a stagnant or falling share price has a demotivating effect on the business and its employees and a potentially adverse effect on customer and supplier perception.
None of these reasons seems compelling to minority shareholders in a business which has been resilient through the recession, and is now expected to recover towards its former profit levels in line with the resurgence of US house-building.
The company states in the delisting announcement that a key point "is the lack of demand for its shares and, in practical terms, a small free float, which further reduces demand. Given the lack of liquidity in the shares, in practice minority shareholders have not been able easily to trade their shares". It is certainly true that recently there has been poor liquidity with no trading on many days. However that is true of many AIM company shares.
Turbotec's parent company prior to Admission to AIM in 2006 was the US-based Thermodynetics Inc, which retains a 13% shareholding. The two other largest shareholders are non-executive director Joseph DeSana (24%) and Execuzen Ltd a company controlled by Adrian Ezra (18%). Both these shareholders appear to have acquired the majority of their shareholdings from Thermodynetics in April 2010. According to the 2012 accounts, L'Espoire Trust has a 6% shareholding. No other current shareholdings above 3% have been disclosed. This leaves around 40% of the shares held by smaller shareholders.
A particularly unattractive feature of the proposed delisting is the possible conversion at a very low price of a recent convertible loan of $200,000 from major shareholder Execuzen Ltd. The loan was made in January 2013, only two months before the delisting proposal. The terms of the loan provide for conversion into shares at 0.25p above the average share price on AIM in the 5 business days prior to conversion. Following the delisting announcement - which has predictably halved the share price as shareholders who cannot or will not hold unlisted shares rush for the exit - Execuzen now appears able to convert its loan at an artificially low price. The terms of the loan were agreed as fair and reasonable for shareholders by the independent directors in late January, after consultation with the Nominated Adviser Seymour Pierce (now Cantor Fitzgerald).
Some Sharesoc members who hold shares in the company do not agree that it is fair and reasonable to set loan conversion terms referenced to the share price on AIM, shortly followed by a delisting proposal which predictably halves the share price on AIM.
Shareholder Guy Thomas said: "There are two aspects of this delisting proposal which are particularly galling for shareholders. First, Turbotec is a consistently profitable company with no immediate financial distress which necessitates delisting. Second, the convertible loan issued at a time when delisting was probably already under consideration will dilute shareholders at a very low price."
This case highlights that investors on AIM face not only the trading risks inherent in a company's business, but also governance risks arising from the ability of profitable companies to delist at the whim of directors and a handful of major shareholders.
ShareSoc advises shareholders in Turbotec to vote against the delisting.|
|Delisting. No real reason. Another nail in AIM's coffin.
How come director Joe DeSena had 24.2% in January, but today the directors collectively only have 20.34%?
Also note convertible loan $200k from major shareholder in January...now convertible at the trashed price? Seems dodgy.
Nothing in announcement about plans for future dividends, corporate sale, other ways to realise return for shareholders.|
|This is looking very cheap. I would love to see Joseph DeSena pay a little more attention and get involved much more. Perhaps look to increase market share in the Middle East, especially Dubai.
The picture is not too rosy at the moment but I feel they do have potential.|
* Sales turnover of $22.1 million (2011: $24.8 million)
* Earnings of $0.1 million before tax (2011: $1.4
million), despite significant development costs for
* Net assets increased to $11.6 million (2011: $11.4
* Investments in new Hickory, North Carolina
manufacturing facility eclipse $8.4 million
* Transition to new Hickory manufacturing facility
continuing with completion expected during 2013
* Final settlement of litigation proceeds received in
July 2011 ($0.3 million)
my reading of the report suggests that state of the US market will discourage
domestic companies from expanding, hence the focus will be on retaining
market share. There is little in the report that makes encouraging reading.
I am now out, but will follow the company's reports as the global energy
markets may change to a more favourable cast in the next year or two.|
|Loans of 3.3M @ 5.3% interest, and an overdraft of 1.2M @3.25% interest, with
a 9% drop in profit margin means that these guys are now working to pay off
their Bank. Also, the management's statement looking forward is hardly
I seem to remember that last December's report was also depressing. If TRBO
gets its act together maybe March 2012 will seem a little brighter, but the
risks now seem significantly higher, IMHO.|
|I'd guess that thoughts are turning to the year-end report due sometime before August, and factoring in
the possibility of a dividend being paid. This is trading below fair value IMHO.|
|Buying from the open this morning makes you wonder if Joe is planning a bid.|
|" The Company expects results for the year to 31 March 2011 to be slightly ahead of market expectations. In the past five months, the Company has seen growth in unit sales volumes as well as increased selling prices arising from higher raw material costs, which have been passed on to customers in line with agreed contracts."
A significant change in sentiment from December's report, and it appears the company is performing
in-line with the US economy.|
|and they have done|
|Looks to me like Thermodynetics have sold down their position|
|Just bought 25K @ 25.5 as you can't fail to see the value.|
|I would like to repeat the advice I gave in post No.9 dated 28th August 2007, when the share price was circa 90p,"If you are out, stay out. If you are in, get out ASAP"!|
|The figures seem a lot more positive than the tone of the Company's Report.
P/E looks to be below 4 and net assets in excess of $11m, plus revenue has
increased in difficult times. Glad I held!|
|The remaining dispute which relates to the lease created in April 2006 by TDYT,
and to the overcharging of rent for both the sites occupied by our operations.
We may be due a big rent rebate too!|
|Tried asking TRBO, this is the clarification ...
"The litigation referred to by Thermodynetics in its SEC report relates
to litigation between Thermodynetics and Turbotec Products, Inc (the US
operating company) regarding facilities leased by Turbotec from
Thermodynetics. This trial is currently set for February 2012 in the US
The response also clarified that the UK litigation is "resolved".|
|TRBO seems to have sound engineering and financial attributes, but litigation
seems to be an ongoing problem. If you check out the latest SEC filing for Thermodynetics (TDYT) there is a reference to a jury trial in February 2012,
so that particular thorn in the flesh is not fully gone.
IMHO this looks like poor judgement (apologies for the pun) by TDYT, however, I
am wondering as to exactly when TURBO will fess up to the presumably, material fact? Waiting for something positive to bury bad news? IMHO, it's just poor PR.
I'm overbought generally ATM, so without positive noises from this management,
I'm on hold.|
|Turbotec is a highly profitable little business, with reasonable margins even during a tough 2010 (note that it had legal costs of 750 this year due to a dispute with its former owner, so FY profit would have been a healthier ~1100). And its growing - sales in 2003 were 11,200, growth of 8% per year. The best part of this is the valuation, 3.4x peak earnings or 6x adjusted 2010 earnings.
Returns on capital employed have been lower over the last few years due to the cash held on the balance sheet, but the company has recently moved its manufacturing to a low cost region of the US, which should see all that spare cash spent.
The company plans to resume its dividend at some point in the next year, which I think will provide investors with a 12% yield under quite conservative assumptions.
I have been busy buying, anyone else see the value?|
|I think this is new from the report :
" with a recovery to $3.2m pre-tax on the cards for 2011-12. "
If that entirely depends on the housing market I would be concerned. However,
given the possibilities for higher temperatures this summer, and higher US oil
and NG prices in the coming winter, that recovery looks plausible.|