600 Share Discussion Threads

[cjohn] 10/7/2019 18:20

Net tangible equity - ie discounting all intangibles and any forward tax assets - is now up to over $12m. Three years back, we had negative equity. So profitability has built shareholders' equity.

Debt levels are also tending in the right direction, but there's a long way to go. Debt was $14.5m at year end. Encouragingly down from $15.6m, with some improvements in levels of inventories and receivables, in spite of increased turnover.


So at the balance sheet date, tangible gearing was down to around a mere 120%. Post the receipt of the pension fund surplus, debt was around $9m and tangible gearing around 75%.


Post the acquisition, net tangible gearing will be back over 100%!

It does look like the company are prioritising the reduction of working capital with, amongst other steps, the proposed sale of Gamet Bearings,

[wynmck] 10/7/2019 17:31

no...can't link.. just google 600groupnews and it's the 3rd one down

[my retirement fund] 10/7/2019 17:23

You got link?

[wynmck] 10/7/2019 17:22

good video interview with CFO Neil Carrick at proactiveinvestors site today

[hastings] 10/7/2019 11:33

Pre-tax profit of $5.3m EPS of 4.25c fwd PER of under 6. Plus progressive dividend now in place.

[my retirement fund] 10/7/2019 11:25

Turning into a bit of a growth story now. What you got for 2021 ?

[hastings] 10/7/2019 07:53

Very happy with the results this morning and the newly installed 2021 forecast.

[dozey3] 10/7/2019 07:36

A summary or the results out this am:

· Revenue from continuing operations up 1.9% to $65.2m (2018: $63.9m)

· Underlying* operating profit up to $5.3m (2018: $1.8m)

· Gross margin improved 2.4% to 36.1% (2018: 33.7%)

· Underlying* pre-tax profit up to $4.1m (2018: $0.6m)

· Group order book up 6.5%

· Recommended final dividend of 0.5p per share

Look good to me, but the icing must be the acquisition of CMS which enhances the offering in industrial lasers. What am I missing here?

[asagi] 05/7/2019 12:03

I understand that results will be next week.

I'd count Friday out but given that we are one week later than the year before last, I'd guess first half of the week myself.

Asagi (long SIXH)

[hastings] 03/7/2019 10:59

Results due any day now!!

[cjohn] 28/6/2019 08:31

hastings
27 Jun '19 - 16:04 - 826 of 827
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I think we could see some decent earnings progress here now CJohn, looking forward to hearing more in the results!


Yes, agreed, Hastings.

What I'd like to see even more is a sustained effort to reléase cash from working capital.

Up till now higher profits have been locked up in more stock and receivables. Levels of debt have remained high and stubborn.


I don't know if there will be any efficiency gains from the new acquistion, which could reléase working capital. On first glance, it looks not.


On earnings grounds these should be significantly higher, particularly without the albatross of the massive pension schemes. But getting debt down would be another important catalyst.

[wynmck] 27/6/2019 17:32

Co say early July....currently being signed off by Auditors

[hastings] 27/6/2019 16:04

I think we could see some decent earnings progress here now CJohn, looking forward to hearing more in the results!

[cjohn] 27/6/2019 15:56

At 20p, it clearly makes no sense to convert.

The higher the price rises, the more tempting it becomes to convert, sell and lock in a profit.

[asagi] 25/6/2019 11:42

there is also now a yield on the shares. Warrant holders would need to come up with the 20p per warrant, forego the 8% FIXED interest but get any capital gain on the shares and any forthcoming dividends, which may rise and fall with time.

It's not clear cut.

Asagi (long SIXH)

[cjohn] 25/6/2019 10:41

At any price, it's less risky to hold the debt.


Which means if they do convert, it's likely to be followed by an immediate sale of their new shares; ie profit-taking to eliminate risk of shares falling back. (Otherwise, they could merely go on holding the debt.)


That having been said, investors often follow sub-optimal strategies.

[battlebus2] 24/6/2019 18:54

Apologies. I wasn’t saying they would convert them just pointing out 20p is the conversion price, I don’t believe they will take any up given the future prospects of a substantially higher share price over the medium term.

I’m also long here.

[cjohn] 24/6/2019 18:01

Hi Asagi,


It works a little bit like a long-dated call option. (The main difference is that debt holders are being paid to hold the "option".)


You'd expect the debt holders to convert to shares when the share price went above 20p and seemed likely to stay above 20p. In view of share price volatility therefore, they'd be unlikely to convert at merely 20p.


What's more, as the holders of the debt are receiving a juicy 8% in interest, you'd expect them to have a still higher strike price for converting the debt to shares.


For example, if there was a firm takeover approach at a price above 20p, then they would convert.


Another example, say in the ordinary course of events, the share price rises to 23p, it would only make sense to convert if you knew you could off-load all your shares at above 20p, which would be unlikely in view of the illiquidity of SIXH.

[asagi] 24/6/2019 12:43

"pay down the debt" I mean pay off the loan that comes with the 8% coupon. The two figures are matching (from memory)

[hastings] 24/6/2019 12:20

With $5m pencilled in for the year in progress the shares still trade on a PER of 6 despite the recent rise.Decent growth prospects here now which can counter the warrant issue.

[asagi] 24/6/2019 10:47

I'm a bit lost on this point battlebus2!

Strictly they are warrants at 20p. Holder is the same person holding the, is it, 8% debt. 600 Group would make new shares available at a price of 20p each and use the proceeds to pay down the debt. Now when the warrants become worth more than holding the debt I don't know - hopefully some bright spark will be along to explain it.

Asagi (long SIXH)

[battlebus2] 24/6/2019 10:07

Options available at 20p when we get there.

[hastings] 24/6/2019 08:30

Looks a great acquisition and the 13% increase on EPS for current year is very welcome.

[my retirement fund] 24/6/2019 08:27

One rather suspects we will shortly be seeing a breakout with higher multi year highs.My personal target has been increased from 22p to 25p