600 Share Discussion Threads

[baner] 23/12/2022 14:05

It is time for mr Dupee to surrender…R30;.this company is worth not less than 20p/share if put up for sale to an industrial buyer. This is a true growth business and there is good appetite for M&A in the sector. Low risk, good upside.

[my retirement fund] 23/12/2022 13:19

I wonder how supportive their bankers really are. Their short term borrowing costs and invoice dismounting schemes will now be incredibly expensive. It looks like they may have failed to fix the roof when the sun was shining.

[my retirement fund] 22/12/2022 23:15

To be honest, it sounds like they need to do some sort of fundraising to shore up working capital given the headwinds. A discounted rights issue or placing? I'm not sure how supportive their shareholders are, an accelerated book build may be out the question as they don't seem to be demonstrating a control of inflationary input and labour costs.

[pldazzle] 22/12/2022 17:45

Dozey - I'm baffled by your comments: as I understood it, substantially all their activities are now USA-based. Please tell me if I'm wrong.

[dozey3] 22/12/2022 17:28

Now they have disposed of machine tools and are concentrating on industrial lasers, and additionally looking to develop these and enhance margins, I agree. Strong exports must be central to their efforts though, UK is in a death spiral. I’m not selling any of my considerable (for me) holding.
Clearly Mr Market doesn’t agree though!

[value hound] 22/12/2022 16:20

I bought a few of these today having traded them successfully in the past (though I still had a few left). I think their strategy will work (is working?), now priced around NTAV.

It may be a long term job though :-(

[gurjit] 22/12/2022 08:17

Looks like the market did not like! Perhaps that's why they were trying to sneak these out in the quiet pre-Xmas week!

[gurjit] 22/12/2022 08:00

Not sure what to make of these results! Debt now low as anticipated, increasing revenues but translates into net loss again from continuing ops due to cost inflation & supply issues. Order book actually down as lost a large order & no dividend. Seems a fair amount of uncertainty ahead with looming recession.Really looking for an opportunity to offload....think I would do so now if it reaches the highs of last year.Any thoughts / more learned opinions?

[1gerryp] 03/9/2022 14:56

Given the fall in Sterling since the US$ sale proceeds, it is to be hoped they have not hedged the US$ cost of the £ loan redemption due next August. This is currently looking about US$1.25m better. Likewise the final interest payment of £680,000. Sterling's fall also reduces the impact of any re-instated £ dividend. I presume the US$3.25 loan facility has been repaid. Should be reporting very soon

[buywell2] 21/5/2022 10:56

free stock charts from uk.advfn.com

[coolen] 05/5/2022 20:52

wynmck, good spot. Yes a shrewd cookie this gentleman. Has been in the "value investing" business for a long time. Recent cash inflow from his previous
stake in INV.

[wynmck] 05/5/2022 15:13

new holding rns

[my retirement fund] 14/4/2022 01:15

That's nonsense, Sixth have had a manufacturing and sales operation designing, manufacturing and selling their own brand of computer controlled laser markers under their brand name Electrox in Letchworth Garden City, Hertfordshire for years and years. I remember back in 2007 getting a chap to laser mark my products and he had a unit full of them. When I asked him what made him get into the contract laser marking, he told me he had been a sales rep for them in Letchworth for many years but left as they didn't offer him much of a future career progression etc

[pldazzle] 13/4/2022 23:28

ALS - Indeed. SIXH had no laser business until it acquired, initially, 80% of TYKMA in February 2015; there have since been further acquisitions on the laser side. The balance sheet at 31/3/2015 shows goodwill of £7.144m [accounts were expressed in sterling back then] against zero a year earlier.

It follows that none of the goodwill relates to the businesses sold.

[arthur_lame_stocks] 13/4/2022 14:19

varies I would think most of the goodwill is remaining with the business as the move into laser marking has come much more recently and through acquisition.

[varies] 13/4/2022 13:51

MRF
Thanks for your comment.
I have no idea how much of the Goodwill of $13,174,000 relates to the businesses sold but I certainly expect to see this asset much reduced in the next balance sheet.

[my retirement fund] 13/4/2022 12:44

Goodwill is not normally worth anything! Its just an accounting slight of hand that accountants use as a tool to present a business for a variety of reasons including tax. Certainly in a business who's income is from tangibles, it should normally be discounted to zero. I mean if they went bust for example and someone buys them out of administration what do you think shareholders would get back. see what i mean?

[varies] 13/4/2022 12:30

correction
$3,000,000 rather than $300,000

[varies] 13/4/2022 12:28

The balance sheet at 31 March 2021 showed current assets of $32,317,000 and current liabilities of $24,837,00 : net current assets $7,480,000.
It also showed non-current liabilities of $12,263,00.
My approach may be over simple but I reckon, therefore, that the total liabilities exceeded current assets by $4,783,000.
Deducting this from the $21,000,000 proceeds of sale of the machine tool businesses leaves net assets (more or less liquid) of $16,217,000.
The fixed assets before deducting non-current liabilities were shown at a value of $31,461,000. These will presumably be reduced by $21,000,000 to $10,461,00
and the total equity should be little changed from the March 2021 figure of $26,678,000 since the sale is at book value, more or less.
At today's exchange rate of 1.30 our market cap is c$23,400,00.
If we can indeed expect the Laser division to produce profits of over $3,00,000 p.a., then our shares look cheap.
Am I wrong ?

[my retirement fund] 11/4/2022 17:50

As I said earlier lucky if its £800K left assuming they extinguish the expensive notes too, no mention about that, they may just want to keep the cash to ensure they can pay themselves ever increasing eye watering salaries bonuses and benefits in the next few years or so rather than doing what's right for shareholders! You can bet your bottom dollar that now that fat wad has landed in the companies bank account, they will be licking their lips!

[varies] 11/4/2022 15:26

KoR_Wraith
You make a compelling case.
I fear, however, that the cash position may be less straightforward than you suggest;
it would have been helpful if SIXH had produced a Pro Forma balance sheet to accompany the announcement that was selling the machine tools business.
For what this is worth, I will attempt to analyse the figures and see if I come to the same conclusion as you do.
I have been buying some shares back recently that I sold at below 10p at the end of 2020 as I too take a more positive view.

[kor_wraith] 11/4/2022 13:41

Sale complete and cash received.

Any thoughts on the below?:

Market Cap @ 16.15p:........$24.8 million
Cash minus Debt:............$6.9 million net cash
Market Cap minus net cash:..$18.7 million
FY22 H1 Laser Profit:.......$1.8 million

Proposed Current PE = 5.2 based on FY22 H1 figures

[kor_wraith] 15/3/2022 13:39

I agree with Callum.

The machine tools division generates high revenues with low profits in the good times and losses in the bad times.

The laser division, very importantly, is higher margin and less cash hungry in terms of assets/stock. The recent statements have been very bullish on its near term growth.

That being said, a degree of caution is always wise and management does not have the best track record.

[callumross] 15/3/2022 12:04

Personally, I thought the opposite, that it was derisking the business with the removal of the debt and a highly cyclical machine tools business. Take your point about fixed costs in relation to a business that will be 50% smaller, at least in terms of turnover.Really important that they drive those HO costs lower to allow the laser business to flourish and grow.

[my retirement fund] 15/3/2022 10:42

From what I can see they will barely see $13M on the sale of this as the sale does not include debt and after paying the loan notes will be left with perhaps $1M for the laser business.

That's a drastically smaller business in which to support the fat cats salaries.

Any change in shareholder ownership should be watched carefully, particularly Perloff increasing or decreasing his position.

From what I can see, this all looks a hell of a gamble, very high risk and its unclear if shareholders will see a longer term return.
For that reason I will not be buying.