Inspecs Share Discussion Threads

[studentinvestor13] 18/4/2024 13:26

I trust a woodlouse more than I trust Myles Mcnulty. Don't rate him at all. He should not be in the limelight imo

[aishah] 18/4/2024 12:56

Happy with the update here. Looks cheap based on 12 mth rolling fcst. Could rebound very sharply imo.
Herd arriving...

[se81] 18/4/2024 08:34

2024 EPS estimates nudged up by 15% after yesterdays update? (per Stockopedia)

[masurenguy] 18/4/2024 07:06

Inspecs hails "encouraging" recent trading after tepid start to 2024
Alliance News - 17 April

Inspecs Group PLC on Wednesday reported improved annual results and said it has
"confidence" that it can achieve market expectations in 2024.

The Bath, England-based eyewear company reported a pretax profit of £200,000, swinging from a loss of £7.7m in 2022. Revenue increased by 1.1% to £203.3m in 2023 from £201.0m in 2022. Inspecs shares were up 8.5% to 51.00p each in London on Wednesday morning. The company is preparing to launch its gaming eyewear offering in May with direct-to-consumer sales, as well as launching new low vision aids through its Eschenbach Optik subsidiary. It is currently preparing to begin production in a new 8,000 square metre manufacturing facility, as well as roll out one of its brands in-store with a leading global retailer. Inspecs added that the company's operational efficiency has been improved by its work on its US operations and global supply chain. Inspecs said it suffered a "disappointing end to 2023 and a slow start to 2024" but trends more recently has been encouraging. CEO Peck said: "I am pleased with the performance of the business to date and, with the opportunities that are in place for 2024, this gives me confidence in the group achieving market expectations for 2024."

[john09] 18/4/2024 05:29

Todays The Times

Inspecs focuses on bright side

Eyewear manufacturer Inspecs seems to have the right vision as the group swung into profit in 2023.
Inspecs, which designs, makes and distributes eyewear, climbed 3½p, or 7.5 per cent, to end the day at 50½p, after the group announced upbeat annual results.
The Bath-based company reversed a £7.7 million loss in 2022 to report a £200,000 profit for the year to December 2023. Revenue rose 1.1 per cent to £203.3 million, up from £201 million the previous year.
The group announced it had achieved record sales during 2023, driven by increased demand for their frames. The results marked a turnaround for the AIM-quoted business which had reported two years of losses.
The eyewear business has recently completed a new manufacturing facility which it believes will lead to increased production in the second half of the year. It also plans to launch new products.
Inspecs said that efficiency had been enhanced through adjustments to its global supply chain
The group, founded in 1998 by its chief executive Robert Totterman, said it had made a slow start to the year but was confident of m

[privileged] 17/4/2024 14:03

Agree Dan but that puts this on a very low multiple.

[dan_the_epic] 17/4/2024 13:50

OK last one promise!

Big EBITDA downgrade on broker estimate for fy24 from 29.6m to 22.5m last September when the stock started to slide from 105p. And then the January downgrade from 22.5m to 19.5m

[74tom] 17/4/2024 13:43

What broker forecasts are you looking at? They have 1 broker covering them & they don't publish forecasts on research tree...

They were in line all the way through 2023, the only downgrade was in Jan;

"The Group has maintained its focus on margin improvement through 2023 and expects to report a 16.1% increase in unaudited Adjusted Underlying EDITDA to £18.0m (2022: £15.5m). Despite this, financial performance is below the market expectations due to softer trading in December."

It's a sentiment driven small cap...

My view is that today's update was better than the market expected, I've never said it was cheap in isolation, it's all dependent on what happens in the future.

[dan_the_epic] 17/4/2024 13:28

I actually like 74tom as he stays on topic even If I vehemently disagree with some of the numbers he has used for the analysis and that the stock is cheap.

Darryn1 nobody asked you to wade in with off topic zero value add posts.

I'll leave you guys to it as I don't want to clog this board further. I'll only post numbers analysis next time they report.

Sorry for the drama. Good luck I hope I'm wrong on Inspecs and it's prospects

[dan_the_epic] 17/4/2024 13:18

"Share Ideas - politics and culture - Post 20722SHA
darryn1 15 Nov 2023 08:51 8
Well Shrewd_n_Sharp is a rather arrogant username and your language suggests that Emotional_n_Selfrighteous might be more appropriate. "

"Dan, as a very recent poster here you clearly don't understand the SPEC share price valuation despite your very patronizing comments to everyone"

Sounds like you just like brushing everyone up the wrong way and you are being equally patronising. Why bring Hvivo into it?, I'll continue to comment against analysis and this stock thanks very much for your concern

It is perfectly reasonable to point out that operating cash flow is never free cash flow and that is a ridiculous definition. You can not ignore lease repayments if you are ignoring leases in your EV.

[dan_the_epic] 17/4/2024 13:15

You are absolutely spot on Tom

What has happened is they have taken garden shears to the forecasts, and forecasts today are much lower than before. They have proven themselves to be unreliable operators in terms of hitting broker forecasts and that has earned a red blotch and discount from many investors. That can change over time

The shares are not cheap in a vacuum. You need major earnings upgrades to get back to 100p you're not going to get there with these broker forecasts

[darryn1] 17/4/2024 13:11

So Dan, in addition to being patronizing you also ascribe comments to other posters that they have never posted either. I have never stated that "the stock is cheap" or made any assessment on valuation. Small caps are largely driven by sentiment, outlook and cash/debt positions but you clearly don't understand this and the post made by 74tom above sensibly summarises that scenario.

As I previously stated, why don't you just stick to ramping hVIVO instead. A piece of gratuitous advice. When someone justifiably states that your comments "look a bit stupid" why continue posting here and removing any doubt that they are!

[74tom] 17/4/2024 12:13

Dan, over the last 15 months this business has gone from 40p to £1.40 and now back to 50p. Over ether period the balance sheet hasn't materially changed. The volatility is based on the outlook, pure and simple.

The market decided in Jan 23 that the business was cheap & shares doubled in a couple of days, the opposite was true from July onwards when it fell by over 50%

So based on your apparent methodology, the market was right last Jan, wrong from Feb to November and is now right again?

Don't you realise this looks a bit stupid?

[privileged] 17/4/2024 12:01

Market is rightly sceptical on companies that have a poor track record of profit warnings and missed targets and poor management teamLook at saga and docs for two others this week

[dan_the_epic] 17/4/2024 11:39

Err. Darryn. Some of the guys who are saying the stock is cheap so the burden is on them guys to prove that the market is wrong to value it on this valuation

I'm trying to help them understand the accounting here and why most of the market DOES NOT think it is remotely cheap

[74tom] 17/4/2024 11:13

Yep, aggressive and patronizing comments are so pointless. There are a million ways to value a business, there is no right or wrong, just opinions.

I think valuing a business on price to earnings when the market cap doesn't account for cash / debt is pretty daft. And no, small cap stocks are not efficiently valued as they are highly sentiment driven.

EV/EBITDA or EV/FCF make more sense to me, what you decide to include or exclude from those calculations is debateable.

Deducting total CAPEX from operating FCF doesn't make sense if that CAPEX is discretionary, which £3.5m of SPEC's is, as it relates to construction costs for their Vietnam factory.

Likewise with interest expense of £4m, if a large buyer took them over and paid off the £44m bank debt then FCF would improve by £4m overnight, so again you can debate whether or not that should be included or excluded from calcs.

It's not black and white, otherwise there wouldn't be a market!

[darryn1] 17/4/2024 10:31

Dan, as a very recent poster here you clearly don't understand the SPEC share price valuation despite your very patronizing comments to everyone. Why don't you just stick to ramping HVO instead.

[bigbigdave] 17/4/2024 09:47

Results well received

[dan_the_epic] 17/4/2024 08:57

I am not bullish inspecs but I'm genuinely trying to help you guys out with the financial metrics as there are some serious things that need to be understood that mean this is not as cheap as it may look IMO

[dan_the_epic] 17/4/2024 08:51

The problem you have with EV metrics is what most acquirers would notice IMO

Lease liabilities are only 4.4x the cash flow figure which to me suggests abnormally short lease terms

If you normalise to 10x, you would add another £24m to net debt.

@ Tom - Also that is a fake FCF definition. You need to do operating cash flow minus total capex minus lease repayments. If you are going to ignore lease debt you cannot ignore depreciation as there is lease depreciation in there that carries cash cost in the CFS

"Any buyer isn't going to value the business on a P/E basis because non cash costs for depreciation & amortisation make P/E irrelevant." - Sorry but I've never heard this before

The tax rate here also needs standardising up to 25% because it is very low backwards looking

[74tom] 17/4/2024 08:49

Sorry, those previous figures are incorrect as they include lease liabilities debt.

Net debt was £24.2m at 31/12/23, down from £3.4m year on year. So EV at 50p is £75m, vs "During the year, the Group generated £12.7m in net cash flows from operating activities after tax and interest"

So FCF / EV is 17%

Any buyer isn't going to value the business on a P/E basis because non cash costs for depreciation & amortisation make P/E irrelevant.

No idea where it goes near term given the market deterioration, but it does look cheap on a forward looking basis IF you believe they can grow the business at 5% PA (which is what current market forecasts are) and net debt continues to reduce.

[privileged] 17/4/2024 08:24

Exactly 74tom always do a rough estimate from that to get a steer on likely share price performance on results day. I reckon these up 10-16% today

[dan_the_epic] 17/4/2024 08:14

What percentage of sales is superdry? who is the large customer more than 10% of sales?

[dan_the_epic] 17/4/2024 08:10

isnt the forecast eps like 5p? so 100p would be 20x