Yorkshire Grp. Share Discussion Threads

[captain.] 30/11/2001 11:29

The 2001 Interim Report, dated 4th September, made reference to the
expectation that the group's full year profit before tax for the year to 31st
December 2001 would be around break even. Since then the group has experienced
market conditions which have significantly deteriorated. It is now clear that
in the last three months of the year, trading conditions have been and will
remain very depressed throughout our key markets in Europe, North America and
Asia.

In this context, the Board expects the group to report an operating profit
before interest for 2001 around break even. No short-term recovery in trading
conditions into 2002 is anticipated, although cost savings being realised will
benefit 2002. In these circumstances the Board does not consider that the
payment of a final dividend would be appropriate.

Despite the trading downturn, the Board anticipates that through active
working capital management and reducing stock levels, the year-end net debt
position will not be significantly different from the reported position at
30th June 2001 of £31.1 million, subject to the translation impact of the
group's dollar denominated debt.

The group continues to focus upon its strategic objectives and to work
aggressively towards reducing the cost base in line with expected levels of
demand across all of its worldwide operations. The Board anticipates updating
shareholders with developments during the first quarter of 2002.


Cutting the dividend prudent house-keeping in this current climate i see further consolidation in this sector and was waiting for an opportunity to acquire some of this group picked up 25,000.

[merlin37] 30/11/2001 11:04

and to-day's news ??

[dennis russell] 29/11/2001 15:29

this is a totally different business from the historic cash cow - now 3d or 4th in global dyestuffs. I think their strategy of investing in market share in usa in particular will pay off very well in due course. Meantime there is a nice divi

[wxyz] 28/9/2001 22:19

any news or views?

[peterbb] 21/8/2001 02:11

From Lieutenant Colombo to colombo:
Oh, just one another little thing, sir: could I just ask you to make that last comment a little clearer for me? Thank you. The wife will be pleased: she's read all of your books.

[colombo] 15/8/2001 20:04

I do that was a jack was 44p. It was a then .

[salthorse] 13/7/2001 14:26

Yield was best thing going for these up to now. Interim held. Any ideas what we'll get for final?

Maybe we'll see takeover interest at this level

S

[milacs] 13/7/2001 11:28

Watching the streaming site I saw Yorkshire drop 29% without any trading as it issued a profits warning. My first experience with this new site wasn't altogether palatable.
M

[merlin37] 01/5/2001 00:18

As a matter of fact (at least according to ME and ADVFN data) the dividend due to go ex on 9 May is 3 p.

Notwithstanding, although I was trying to give it up, they do look good for a dividend strip. Whilst this dawned on me fifteen minutes ago, the Offer Price has sneaked up another penny, and this morning's trades all appear to be purchases.

With a yield of 7.63 nearly double the P/E of 3.94 they do appear to be rather good value.

[t.broughton] 26/4/2001 15:37

Three large trades today of 63k, 100k, & another 100k.
Not sure whether these are buys or sells, any info anyone!
I do know they go exdivi on May 9th, paying 4.5p

[currypata kai] 29/3/2001 15:11

huge volume today.

Any comments??

[thomas10] 09/3/2001 21:04

they are being bought out I understand, I seemed to have heard a rumour that there was a deal in the pipeline but it was one of those on/off tings

[rikreschem] 09/3/2001 20:35

Over 6 million shares traded late on Friday. Anyone got any further info?

[rikreschem] 01/2/2001 11:16

Still climbing. Up 3.5 yesterday and 2.5 so far today. Wish I knew why!

[clem] 30/1/2001 16:54

Good old value stocks appear to be heavily in fashion right now. YOR appears one of the cheapest on the block.

[justin_thyme] 30/1/2001 16:48

From the wires today;
"Yorkshire Group plc announces the acquisitions of M Balas SA and Societe
Commerciale de Fontbazy sarl for a cash consideration of FF5.5 million
(#511,000).

Balas and Fontbazy are the agents in the French market of Yorkshire
International sarl."

Nothing there to justify any rise.(IMHO)

Last week it was announced that the Pru had sold 600,000 YOR shares (and yet the price steamed north!).

The MMs certainly seem to have a big buyer in the wings - trades through the system certainly wouldn't seem reason enough for the move up and the Pru may well have been letting someone have a chunk for a reason (unknown, but one can speculate).

Ian...

[rikreschem] 30/1/2001 10:07

Up another 3 this morning. Something is bubbling away somewhere but I can find no information.

[merlin37] 25/1/2001 15:02

This got a worthy mention on the ME BB this very morning. Perhaps there is no smoke without fire.

[rikreschem] 25/1/2001 14:32

Climbed steadily from 60 to 71 over past few days. About to take off IMHO. Results due out early April I believe. Get in before then.

[rikreschem] 19/1/2001 14:15

Bringing to the top as there seems to be some activity. See above research. This will fly north when spotted.

[rikreschem] 12/12/2000 17:10

See attached excellent bit of research

"Posted by tiredoldbroker on 29/April/2000 at 18:33:

Earlier today, I referred to YOR, where Per Gyllenhammar has just
upped his stake to 5.2% as very cheap. For anyone who's missed my
thoughts on this stock, here's the details.

Yorkshire Group PLC......................................18.4.00

price 48-53p; shs in issue: 52.3m; mkt cap £27.7m; final div 3.05p mkg

6.1p; yield 11.5%; eps forecast to 31.12.00 18.8p; p/e 2.8.........
yes, 2.8


At the start of 1999, YOR had a strong financial position, holding
over £30m net cash from the sale of non-core businesses.
Unfortunately, the trading outlook was bleak. Its UK factories only
made acid dyes for wool and nylon fibres and cationic dyes for acrylic

fibre, so it served just a fraction of the total world dyestuffs
market. It was exposed to a declining UK clothing industry, the strong

£ and cheap Far Eastern imports. It was involved in the 'commodity'
end of the market, making its own presscake (a basic form of dye),
where it could not compete on price with Chinese manufacturers. The
only reason for buying the shares was the very high dividend, paid
from cash on deposit not trading profit, and the hope that the cash
would be handed back to shareholders.

A series of strategic moves during the year fundamentally changed the

nature of, and outlook for, the company. In January 1999, YOR
announced the purchase of Viochrom SA, an Athens based manufacturer of

speciality disperse and cationic dyes for the automotive industry, for

£12.8m cash. This was a step towards positioning YOR as a broadly
based speciality dyes and chemicals business, with a geographically
diversified manufacturing base. It also provided a qualitative
improvement in its technical resources.

Then in March 1999, YOR agreed with the major Japanese chemicals
company Nippon Kayaku that it would take over marketing NK's textile
dyes in selected markets, to develop sales to new customers. They also

entered into discussions on further collaboration regarding the joint

development of their global textile dyes businesses.

At the same time, YOR announced that it was accelerating the
restructuring of its UK operations. It would cut production of low
cost pre-finished commodity products, sourcing them instead from the
Far East, with YOR concentrating on added-value dyestuffs.

There will be an exceptional gain here, not reflected in the 1999
accounts, with Crosby Homes (a Berkeley Group subsidiary) paying £6.1m

cash in return for YOR relocating plant to permit a major leisure
development on land adjacent to the Hunslet Road site. All production

on that site will now be from a single, specialised, highly efficient

unit.

Finally, at the end of 1999, came the major news, which promoted YOR
from an insignificant regional player to immediate status as the
fourth largest supplier to the world textile dyes market. The £54.1m
acquisition of businesses from CK Witco gave YOR the market size and
spread which it needed to establish itself as a serious competitor,
with a broad product range and a decent market share. The businesses
acquired were in textile dyes, serving worldwide markets including
clothing, carpeting, swimwear, hosiery and home and automotive
furnishings, and European industrial dyes, serving markets outside the

Americas, including leather, paper, wood stains, reprographics and
other speciality applications.

YOR will now be able to offer a more complete range of dye products,
adding acid, reactive and direct dyes to its disperse and cationic
dyes. It will also benefit from strong market positions, including
being the second largest supplier of acid dyes in the world, to add to

disperse dyes where YOR was already one of two leading worldwide
suppliers for acetate and one of the major worldwide suppliers for
polyester

CKW has entered into a 5 year agreement not to compete with YOR and
has retained 4 of the 7 plants supplying the dyes businesses, signing

a supply agreement consistent with YOR's policy of outsourcing
commodity products. The company believes its competitive edge is
reinforced by having a lower dependence on own-manufactured product
than any of the other major European dyestuff suppliers.

YOR was able to acquire these businesses because CKW was itself formed

by the merger of two American chemicals companies in 1999, and in the

wake of that deal they were looking to sell off operations which they

viewed as non-core. YOR has taken over 3 manufacturing facilities, in

Lowell (USA), Oissel (France) and Tertre (Belgium), the hq in
Charlotte, North Carolina, and R&D facilities in Gibraltar,
Pennsylvania, along with the European admin & IT centre in Brussels,
the US warehousing & blending facility on a 16 acre freehold site at
Greenville in South Carolina, and sales offices and warehouses in a
number of locations worldwide. Senior management will continue with
the enlarged group. The total purchase price of US$86.5m (£54.1m) was

met by US$78m (£48.8m) cash and the issue of 6,481,060 shares (12.4%)

at the then market price of 81.15p, and the businesses had a net asset

value of £62.5m.


The global dyestuffs industry has been consolidating, with YOR's move

coinciding with the merger of DyStar with the textile dyes business of

BASF. Production of basic products seems likely to continue to move to

low wage economies, but overall the worldwide balance of supply and
demand is improving. The enlarged YOR group will be well placed to
profit from the improved conditions within the industry and to exploit

opportunities anticipated from further industry rationalisation. For
example, BASF-DyStar is likely to be required to divest assets before

merger approvals can be granted. YOR now has to be ranked alongside
the dye businesses of Clariant, CIBA and BASF-DyStar, with these four

controlling more than half of the world trade in dyes.

Assuming that YOR can complete most of its integration by 31.12.00, it

will have turned itself from a regional manufacturer of polyester dyes

into one of the 4 global players in the industry within 12 months. It

has also changed from a commodity producer into a manufacturer of
speciality dyes and chemicals. Thus, the quality of earnings has been

improved. The acquisition is expected to produce cost savings of £5m
per annum within two years, whilst also enhancing earnings. It also
positions YOR to benefit from further rationalisation within the
industry.


The CKW purchase moved YOR from net cash of £27m to net debt of £19.6m

(gearing 30%) at the year end. This is a very manageable level of
gearing. Interest cover is good, and the balance sheet would support
'bolt-on' acquisitions.

The share price is currently at a discount of over 57% to shareholders

funds of £65.2m, as reduced by special provisions, and the market
capitalisation of the company is around 16% of annualised sales. These

two factors would indicate that the share price is currently too low.

Both the net debt and shareholders funds figures quoted here ignore
the £6.1m due on the Hunslet Road site.

The deciding issue is how much YOR can earn from its enlarged
business. In the year to 31.12.99, the small trading surplus was
swamped by a £25m provision for rationalisation and integration costs,

but at least with those expenses already covered, the current year
began with a clean slate. The company says that in cash terms, pay
back on the £25m is less than 3 years. On 12.4.00 the Chairman said
that the group had made its best start for several years and that the

combined businesses were an excellent fit. He added that cost savings

would be extracted as quickly as possible, and that demand was showing

distinct signs of improvement over 1999, helped by YOR's reduced
dependence on clothing manufacturers. The broader international spread

of manufacturing facilities should also insulate the company to some
degree against currency fluctuations.

In the year to 31.12.98, the CKW businesses made an operating profit
of £13.3m; In the six months to 30.6.99, the figure was £4.2m. Assume

that the annualised 2000 profit figure will be twice that half year
figure, i.e. £8.4m. Also assume that the original YOR business and
Viochrom contribute nothing. Knock off interest at 8% on the £19.6m
debt and apply a 30% tax charge. You're still left with £4.78m after
tax, putting the shares on a p/e of 5.8

Then start looking more closely. The CKW businesses could do a lot
better than £8.4m. With the accounts for 1999, the Chairman said, "we

are delighted at the quality and strength in depth of the organisation

we have acquired". YOR has entered into a supply agreement with CKW,
which it says will result in substantial annual savings. Worldwide
overcapacity has been reduced. Some of the anticipated £5m cost
savings will come through in months, rather than two years. The
original business and Viochrom should contribute to year 2000
earnings. Suddenly, the p/e looks likely to come out at rather less
than 5.8

In December 1999, the Investors Chronicle reported that Credit
Lyonnais Securities were recommending that the shares be bought at
77.5p, following the CKW acquisition. At that time, CLS forecast EPS
of 18.8p in 2001. Since then, there has been little or no City
coverage of the company - it's as if analysts, along with the market,

really don't know what to make of it. But on that forecast of
earnings, the p/e is as low as 2.8. Even if the CLS forecast is overly

optimistic, it is hard to see much further downside in the shares.

That is partly because the share price performance over the last few
months has been dreadful. From 100.5p before the CKW deal, to 81p when

the shares were issued for the acquisition, to 53p offered today. It
looks as though all the speculators who bought hoping that the company

would return cash to shareholders have been disappointed sellers, not

waiting to see what the merger delivers. Likewise, shareholders
chasing oversized dividends have sold as the company has reduced
payments to a level sustainable out of trading profit. With the fall
in the share price, even on a dividend reduced from 9.6p to 6.1p, the

yield is 11.5%. The xd date for the final dividend of 3.05p will be 15

May, payable on 2nd June, so a purchase now will even produce some
mid-year income.

I would also point out that the 'enterprise value' of YOR (market
capitalisation plus net debt) is currently £47.3m. Yet the CKW
businesses were valued at £54.1m in December, Viochrom was acquired
for £12.8m and the Hunslet Road site brings in a further £6.1m. Even
if the original dyes business is deemed valueless, the discount to net

worth on this basis is over 35%, far more if YOR's Leeds operations
are given some value.

Therefore, whatever basis of valuation one adopts, the shares appear
cheap. Cheap compared to shareholders funds, cheap compared to sales.

Cheap on a conservative view of earnings, very cheap on an optimistic

view. Cheap compared to last year's high, cheap as an income stock,
cheap compared to break-up value. The only conclusion I can draw is
that the shares are underpriced - but by how much we will only know
when the next set of figures are published in October, or the City
starts to write about the company again. Unless, of course, in the
mean time, one of the three bigger companies in the sector decides to

take out the competition through an offer well above the market
price."

[justin_thyme] 12/12/2000 15:08

Unusually heavy buying of this very undervalued Chem. Co. today - something in the offing?

Ian...

Mr Gyllenhammmar owns 5.27% by the way!