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Zytronic Share Discussion Threads
Showing 1826 to 1849 of 1850 messages
|Good explaination of the nature of the business and the lumpy orders from Richard Beddard.
Watch: Zytronic (ZYT)
Touch sensor manufacturer Zytronic's (ZYT) results can be unpredictable. The company's big weakness is that it relies on three major customers for 58% of its revenues.
If a big customer stocks up in one year, it orders less for the following year; and there's always the risk Zytronic will lose the business of a significant customer altogether.
Having stocked up on displays for its vending units in 2015, Coca-Cola ordered far fewer in 2016, sending vending into third place behind the gaming and banking industries in terms of revenues earned by Zytronic.
Although the company managed to lift profit marginally in the year to September 2016, in previous years when it has experienced de-stocking that hasn't always been the case.
In mitigation, Zytronic's sensors and screens are designed into its customers' products, so it tends to remain a supplier for the product lifespan. Zytronic's patented sensors sit beneath glass up to a centimeter thick, enabling the screens to withstand vandalism and harsh environments.
As well as vending machines, it supplies screens for slot machines and ATMs. One of the glitzier applications for the sensors showcased in its annual report is a digital roulette table housing an 84-inch screen.
Though profitability undulates, over the last decade Zytronic's return on capital has never fallen below 8%, and strong cash flows in recent years have allowed it to pay down debt.
The company's cash balance net of very modest borrowings stood at over £11 million at the year end. A share price of 390p values the enterprise at £40 million, about 15 times adjusted profit in 2016. For long-term investors, the shares could make a good investment.|
No recurring revenue as such (ie licence or service). The ZYT touchscreens are designed into customer products which can though be sold for several years so in that sense a customer continues to be supplied by ZYT for a number of years.|
|Am considering buying in here - can anyone please tell me if there is any element of recurring income here or is it all one-off sales.|
|Hi galeforce. You were asking about aim shares in a sipp ref inheritance tax. Sips I believe e can be passed on in toto without hit. Worth confirming with your sipp manager and nominating Beneficiary damn this predictive text without hit should be without I H T|
|It's quite a substantial cash pile for its Mkt Cap. My personal preference would be to buy back shares or a special dividend unless the company has something else in mind. Zytronic is very cash generative with a very low price to FCF of 13.7
I'm not a fan of companies retaining cash as a comfort blanket which seems to be the case here, either get it to work for you or redistribute it via buy backs or dividends.|
|I think it's difficult to read across from one company to another with these sorts of corporate transactions. ZYT have plenty of cash available and the cash pile has been growing year on year. I think it's possible the issue with the reserves had been preventing them from distributing more of that cash back to shareholders, but I'm not invested here just for any potential special dividends.
I do think they need to do something with that cash though, it's just a wasting asset otherwise. They haven't really been growing the top line so it doesn't seem like the cash is needed to fund expansion. If they're not interested in M&A then what else is there other than paying it back to shareholders?|
|The 'no immediate plan' was stated in the notice of AGM, so the fact it is being reiterated in the process announcement shouldnt I believe be seen as new or cause for concern.|
|bestace, the same situation arose in another investment I had, PEG, where they arranged the capital reduction in late 2015. Yesterday, with the 2016 final results, when I expected a maiden dividend (which they could have financed), not a peep was mentioned. One investor believes the directors are waiting to convert all their loans into shares first!
Anyway, the reduction is likely a long term plan. As you say, it is not "never".|
|"no immediate plan" isn't the same thing as "no plan". Why would you spend all that time and money on getting the capital reduction through unless you were going to do something with the reserves? It's not as if trading is so poor they need the reserves to continue paying the existing dividends.|
|kalkanite, the RNS also says:
"furthermore there is no immediate plan to return capital to Shareholders, whether by way of any additional dividend, a share buy back or otherwise."|
|Confirmation of capital reduction...
Special dividend on its way?|
|Despite the conservative basis of our valuation, it still suggests that Zytronic is under-priced at the current (March 2nd) share price of 405p, for a £65m market cap.
Should the anticipated growth be achieved through 2017, a fair value of £90m+ would be more realistic, offering potential share price upside of >40% from current levels.
There will always be an element of risk given the customer profile, but this risk:reward proposition appears to be more than fair to potential new investors.|
|Nice chunky dividend received.|
|Tipped in Shares magazine.
"Reliable growth and income with Zytronic"|
|had two more bites today
|So kind, galeforce1!|
Qualifying AIM shares are exempt from IHT if you have held them for a minimum of 2 years.
I'm not sure if there are any special rules re. AIM shares held in a SIPP. I don't think so.
Qualifying AIM shares are not a threat to your immortal status!|
|I have recently added here but I am mightily disturbed by recent posts that imply a threat to my immortal status. Should I be concerned?|
|Interesting stuffAs someone who a good way along his mortal coil ...does this apply to any aim stock sitting in your sipp on the day of your demise|
Another interesting thing is that although property companies are usually non-qualifying, various property managers are qualifying. For instance Lok'nStore (LOK) (despite the fact that they own most of their buildings). This is a very good business, with great management.|
|Thank you galeforce, that's very useful.|
There's a useful site that allows you to check on whether specific AIM shares qualify for IHT relief - www.investorschampion.com
There's a charge (£5 per search or £30 for ten searches), but it's a useful tool.
Importantly, AIM copanies do not have to be Brtish to qualify. For instance Safecharge (SCH) which is Israeli, qualifies. So dies FXI which is Malaysian, or AFG which is Chinese.|
Indeed I do, but this is not the place to discuss, but briefly: the Inland Revenue is cagey as to which companies are eligible: they have to be British, not quoted on a recognised stock exchange, so AIM shares are OK, and not builders, financials or miners. That's my understanding. As well as ZYT, my favourites are IQE, BEG and RNWH, which are I hope eligible but I'm happy to hold anyway. Good luck.|
|Hi DozeyI also appreciate the advantages of holding ZYT with regard to inheritance Tax. Do you have any other AIM stocks that offer a similar security and advantage as ZYT?|