Zotefoams Share Discussion Threads

[woodcutter] 16/7/2016 10:15

gleach - I'm looking longer term than just next year. Sterling has bounced this week on the back of the BOE holding interest rates at 0.5%. I don't see that holding into next year(but i could be wrong) Sterling weakness is likely to be longer term in my view. Although i did mention it now looked to be a long term hold perhaps i should have clarifed my thinking on that point, my apologies. i.e beating future forecasts if sterling remains weak.

According to Digital Look forecast for this year are around 13p and next year 15.7p. As you point out this year may not improve but next year could be very interesting. If the sterling weakness is say 15% on last years figures that would make forecast eps next year around 18p. And possibility of further growth given the latest TS narrative. That would be a forward per of around 14.5 well below their historic average.

There is also the big advantage that the operational gearing is very low as overheads are small in comparison to revenue so if there's a down turn then there's some level of protection and comfort.

Given the illiquidity of the stock if you wait for the results to show the upside potential it will most likely be too late to get any stock. It's clearly a risk buying at present but i believe there's significant potential in the medium term so it's a risk i'm prepared to take at present. I like the business and have been a past holder and will accumulate on any further weakness, i can be patient.

woody

[gleach23] 15/7/2016 14:33

woody - that contradicts the statement put out by the company that I posted above

[woodcutter] 15/7/2016 13:25

Despite the high rating i've been accumulating and now see this as a very long term hold prospect given the market potential.

The exchange rates last year were:

Euro average 1.38
Dollar average 1.53

This alone will have a significant beneficial impact on eps based on current exchange rates. Taking in to account the likely increase in sales and they could easily beat forecasts, Brexit uncertainty excepted.

woody

[gleach23] 12/7/2016 20:15

Looks like an interesting point to get back in here as it hasn't yet taken part in the post-Brexit recovery along with the rest of the market.

Interim results due 2 Aug and perhaps a Trading Update imminent (10 July last year), following the positive recent statements.

I had wondered about currency impact but this from the March Prelims -

"The majority of Zotefoams' costs are sterling denominated, while approximately 80% of sales are outside the UK, mainly invoiced in US dollars or euros. The recent relative weakness of sterling will, therefore, have a positive impact on our Group, although this is unlikely to be significant this year, as the majority of expected foreign exchange exposure during 2016 has been hedged, in accordance with our policy, at rates prevailing before the recent sterling weakness."

[janeann] 06/6/2016 15:22

well someone seems to know something about these - unless they have been tipped somewhere. Either way a very Welcome rise.

[philanderer] 19/5/2016 00:14

MARKET REPORT: Zotefoams, the firm that keeps our shoes comfy, sees shares climb after announcing record sales for first three months of year

Read more:

[battlebus2] 18/5/2016 15:36

Good to see £3 cracked again, hopefully we can stay or move higher from here.

[thomasthetank1] 18/5/2016 12:06

Read Panmure Gordon & Co's note on ZOTEFOAMS PLC (ZTF), out this morning, by visiting hxxps://www.research-tree.com/company/GB0009896605

"Zotefoams, the world leader in cellular materials technology, has issued an upbeat AGM trading update, confirming that trading momentum has continued. Indeed sales for 1Q16 were ahead of the record 1Q15. In order to satisfy the ongoing growth, management has announced it is increasing its capex programme and has ordered a second high pressure autoclave for its US site. We anticipate investors will see today’s news as a significant vote of confidence by management..."

[battlebus2] 18/5/2016 08:16

Not sure janeann, seems to be a lot of shares changing hands at the current level.

[janeann] 18/5/2016 07:59

yes a very encouraging update. And planning for future expansion in capacity. Will it be enough to get us back over £3 I wonder?

[battlebus2] 18/5/2016 07:18

Upbeat AGM statement with trading for the first three months ahead of a record 2015.

[battlebus2] 03/5/2016 16:15

Blackrock continuing to add with another 300k...

[battlebus2] 17/4/2016 20:05

Your just in time for the 3.8p dividend which is x this Thursday.

[woodcutter] 17/4/2016 19:54

thx bb2 my numbers are from the last prelims and compare favourably with those of advfn so i figure i'm near the mark.

need to compare revenue growth with admin costs growth yoy too and also compare operating profit margin yoy perhaps too.

I like to see revenue growth and margin growth with admin cost growth less than revenue, good operational gearing, but it's hard to find.

As you know i'm a past holder but I'm not so concerned about the current price i figure i may be in a bit early but this is a decent growth stock and i'll add on any further pull backs. You can wait for the bottom but as we know with these rascals you just can't get the stock then in any quantity so you've got to take a few risks buying early.

woody

[battlebus2] 16/4/2016 15:06

Good to see you here again Woodcutter. Another exemplary analysis.

[woodcutter] 16/4/2016 13:48

I've taken a small position here this week my analysis fwiw

The candlestick pattern isn't convincing but the indicators are reasonably strong. The narrative in the last annual report was very supportive of the growth prospects so I've taken a small position.

ZTF Chart

free stock charts from uk.advfn.com


ZTF fundamentals
hxxp://www.zotefoams.com/



The Fundamentals P&L
Market Cap £126m
number of share in issue 44.4m.
share price 285p
revenue £54.44m
operating profit £6.33m
operating margin around 11.6%.
eps (earnings per share) 11.1p
per (price earnings ratio) 25.5, forecast eps of around 13.2p this year for per around 21 and further growth out to 2017
dividend 5.6p/share for a yield of around 2%, covered close to 2 times by eps.
interest adequately covered by operating profits 20x
market to book value roughly 2.5 times
tax charged at standard rate

The Fundamentals Balance Sheet
ROCE return on capital employed 9.5%.
current ratio 2.52
acid ratio 1.8
debtors days around 115 days
net gearing 27%.
pension obligations £5.2m

The Fundamentals Cash Flow
net debt £1.59m to EBITDA £8.4m
pbt £6.01m.
cash generated from operations after movements in working capital £8.4m.
depreciation and amortisation £3.48m
capex £8.7m demonstrates the investment in new equipment relative to depreciation charge.
Capitalised R&D spend £0m.

woody

[condom2] 15/4/2016 07:49

This is Great News for a company that has strived so hard against all the odds. Very Well done !!!

[janeann] 15/4/2016 07:27

All good - especially the last line .........We anticipate 2016 being another year of growth and we are confident about the long-term prospects for our business

[battlebus2] 08/4/2016 21:23

I see Panmure reiterated their 370 target price.

[battlebus2] 08/4/2016 14:43

Thanks TTT1....

[thomasthetank1] 08/4/2016 14:38

Read Panmure’s initiation note on Zotefoams (ZTF), out this morning, by visiting www.research-tree.com …
“Zotefoams utilizes a unique (patented) production process to manufacture a portfolio of block foams that deliver superior performance characteristics (e.g. UV and temperature resistance). Clients across numerous industries are increasingly using these specialist materials, driving double digit sales growth (10.9% FY15). We believe this part of the growth story is well understood. However, the market is not fully appreciating the transition in margins taking place (12.0% in FY15 vs 9.4% in FY06). Further operational gearing and a significant uplift from (newer) higher contribution products means this expansion has scope to continue (forecasted EBIT margin 14.3% FY18E)…”

[battlebus2] 04/4/2016 16:25

Slowly climbing off those recent lows, buyers at 290 again....

[battlebus2] 23/3/2016 13:33

Steve Good buys first shares25k @279.

[battlebus2] 22/3/2016 16:41

Miton have bought the million traded yesterday it seems.