Abrdn Property Income Share Discussion Threads

[arthur_lame_stocks] 22/1/2015 18:41

I wonder if it's an attempt to smoke out a higher bid. Presumably there was some interest at a higher price last time the company was put up for sale.

Or are Steel hoping to flip it for a quick profit?

Personally I think there shares are worth £1 and i'll just about breakeven after costs if this takeover goes through.

[davidosh] 22/1/2015 13:24

Are Crystal Amber still active and key shareholders here ? if they did not put their name to the bid and only a few months ago stated in their own AR that this holding should be worth £1 a share then thefe could still be some sparks to fly and upwards adjustment needed to get the 75% they need.

[meijiman] 22/1/2015 11:58

about time this was taken over -management has failed dismally so let someone else have a go!

[gingerplant] 22/1/2015 11:44

Offer at 60pps This undervalues it but they already have 62%.

a bit of a steal it would seem.

[davebowler] 08/12/2014 12:27

Equity Development;
API is a leading manufacturer and distributor of foils, films and laminates used to enhance the visual appeal of products and packaging, helping its customers to communicate brand values and authenticity.

Interim results were mostly as flagged in September. Headline sales were broadly level, 1.6% up y-o-y at constant exchange rates, but lower profit reflects an adverse mix of contributions from the group's four divisions, which sell distinct products into European, US and other world markets.

Group finances remain in robust condition despite recent capex and lower than anticipated profitability. Both mid-year net debt at £5.7m, meaning 22.2% gearing, and working capital were in line y o y. Net interest was just £0.2m in the first half.

The shares appear underpinned by a 7% increase in the interim dividend and potential 2.2p full year distribution, giving a 4.7% prospective yield. Similarly the PER is 10.1x (FY15e), falling to just 7.0x (FY16e) which reflects the uncertainty, but not the recovery potential driven by both completed and further planned strategic initiatives.

[duerespect] 03/12/2014 15:01

Also agree. Shocking set of numbers. CEO is now in the Chair and seems to be CFO as well. Steel Partners used to have real teeth in shaking poor managers out of their trees - how they have fallen ! And the Board had the cheek to call offers of 80p too low last year. Deadlegs indeed. Needs a strong truly indie Chairman to clear the decks and hire hard or this is 20p territory.

[meijiman] 03/12/2014 10:21

Have to agree. Was going to ship them out 6 months ago -but decided on one last chance. That was a mistake!

[salpara111] 03/12/2014 09:31

Well, for once I called something right....see my post no. 1074
The fact that the US economy is growing at a healthy rate but they are producing consistent losses over there suggests that they don't have a proper grip on that business.
I am now taking them off my low level monitor list as I don't think that the current management are able to run the business.

[meijiman] 03/12/2014 08:36

Another hopeless set of results from these deadlegs. Why they couldn't sell themselves is now very clear. Clutching at straws approach to management.Can't see anything changing here -very poor.

[al101uk] 09/9/2014 14:26

Simon Thompsons update on API likely the reason for the fall, last paragraph reads:

"However, despite these positives, and even after the earnings downgrades, I feel that the short-term risk to earnings is on the downside and API's shares could struggle to make headway for the next six months. In the circumstances, I am reversing my buy recommendation and crystallising a 15 per cent loss on this holding. Medium-term holders may wish to hold out for recovery, but with a catalyst lacking for a re-rating I feel there are more attractive investment opportunities elsewhere."

Very rare he backs away from one of his tips!

[paleje] 09/9/2014 07:40

Thanks Arthur.

[arthur_lame_stocks] 08/9/2014 08:05

From Crystal Amber's results:

API Group PLC ("API")

API manufactures and distributes laminates (52 per cent of group revenues), foils (42 per cent) and holographics (6 per cent) to printers and packaging manufacturers in the UK and US. These decorative finishes are used to enhance the visual appeal of branded consumer goods and are sold in the UK (20 per cent of revenues), the rest of Europe (58 per cent), Americas (15 per cent) and Asia Pacific (7 per cent). API's holographics and foil distribution businesses deal with a fragmented and regional supplier base. In contrast, API laminates is the main supplier in Europe, with an estimated 40 per cent market share, which is even higher in products such as tobacco, alcoholic drinks, and personal care. The company produces over 80,000km per year of laminated material, sufficient for approximately 38,000 consumer goods items in the average supermarket.



Due to their relatively low cost, decorative supplies normally become tied to the lifecycle of a brand's product: once the supply is approved and qualified, it tends to last for several years. The customer's focus on supplier reliability and quality creates moderate barriers to entry for large-scale imports. The holographics market is estimated to be over $1 billion in size, and growing at seven per cent per year, with a fragmented and regional supply base. With laminates and holographics, API's challenge is to move from a component supplier to marketing its capabilities direct to clients such as brand owners of consumer goods. Similarly, in foils, API's strategy has been to increase direct sales to customers, acquiring or growing its own distribution hubs in local markets to capture their 20 per cent product margin.



The current management team arrived in 2007 and, following an £8 million fundraising, started a business turnaround. Since 2008, revenues have risen from £87 million to £114.7 million, and a £4 million annual loss has turned into a £6 million profit. Net debt, which in 2009 was £17 million, disappeared in 2014. The consolidation of the two API Foils Americas sites could release considerable value from the Rahway freehold property, and be significantly accretive to margins.



Activist issues have been prominent at API since February 2012, when its board received a request from its two largest shareholders to explore the sale of the business, and the Fund bought its stake. Steel Partners and Wynnefield Capital together hold 60 per cent of the equity and have board representation. The Fund supported the management's strategy and, at the end of September 2012, API initiated a sale process by inviting tenders. In February 2013, after the board announced that indicative bids were below 90p per share, we wrote to the chairman indicating that, in our opinion, an offer at that level would not reflect the value of the company. With management only part-way through its revival plan, we believe that more shareholder value will be released by allowing the benefits of this to become apparent. The board confirmed its agreement with our position and the sale process was terminated.



With the distraction of the sale process behind, the Fund held discussions with management around key issues including the reintroduction of a dividend, the composition of the board and the establishment of new strategic targets. Despite initial reluctance, the board has in 2014 reintroduced a dividend, and announced a review of the board composition that we expect will result in the appointment of a new chairman. We look forward to additional engagement on the selection of a new chairman, and the quantum of the dividend.



Over the 2014 fiscal year, API continued strengthening the business, and has now opened a new distribution site for foils near Manchester, which will allow its other site at Livingstone to focus on production. New SAP systems have been installed in the US foils business and are now being rolled out in the European distribution network. These will help API reduce its working capital and improve pricing. Together with these changes, API has experienced the inevitable turbulences that come with operational changes but the changes have resulted in a stronger business.



It is our belief that the reorganisation, investment and marketing initiatives combine to offer upside well in excess of 100p per share. We intend to continue our engagement with the board and management to ensure that full value is delivered.

[davebowler] 04/9/2014 14:07

Equity Develpoment;
API is a leading manufacturer and distributor of foils, films and laminates used to enhance the visual appeal of products and packaging, helping its customers to communicate brand values and authenticity.

Yesterday's trading update warned that results for both the first half of the current year, and the full year itself, are likely to be below current expectations. Indeed both outcomes are probably going to be below the outcomes reported in 2013 / 14.

The problems are in the pigments unit and may not prove long-lasting, indeed the RNS states that ''a recovery is now getting underway.'' It also comments that the other divisions are trading broadly in line with last year.

We reduce forecast underlying diluted EPS for the current year to 5.7p, with 7.1p in the year following. Applying our previous calculation as to fair value at 11x forward EPS on the new estimate gives a share price of 78p.

Considering a historic yield well over 3% on the shares (last dividend of 2p), coupled with ongoing investment and some exciting growth prospects, the shares seem reasonably underpinned after this correction, pending future updates on improved trading that should drive a recovery in ratings.

[paleje] 04/9/2014 13:10

Equity Devs revise target to 78p saying recovery already underway and when better news filters through they will re-rate. Probably true but in the meantime might be further falls. No mention whether divi's safe.

[salpara111] 03/9/2014 12:31

Have kept an eye on this one for quite some time but never invested....given that the US economy is growing at somewhere around 4% at the moment I can only imagine that their performance over there is company specific and as such I wont touch this one.
I am actually surprised that it didnt get marked down more heavily this morning.

[meijiman] 03/9/2014 09:31

This Simon Thompson seems to be an excellent contrarian indicator-there again you made money from the Chronic by doing the opposite to the 'advice' proferred

[paleje] 15/7/2014 17:46

Anybody attend the AGM today, any idea why they wanted to disapply preemption rights? I've emailed them but just wondered if anyone knew.

Simon Thompson did a piece on them today btw, said share price in excess of 90p would be more appropriate given the steady progress being made.

[meijiman] 17/6/2014 16:18

The key question is why the rating of API is at such a discount to their peers? The track record is not brilliant but the company looks to be well run and should re-rate. I just feel its off the radar and maybe illiquid so management may need to give that a bit of thought. A bit of a discount maybe but here its on a multiple which is half that of two larger peer companies.This broker note might help.

[paleje] 17/6/2014 15:58

New guesstimate out, bit more modest than their last one, target 93p.

[davebowler] 06/6/2014 13:43

Crystal Amber update:

Crystal Amber's NAV emerged at just over 157p to end May. News in May included the successful culmination of the company's actions with Leaf Clean Energy in which Crystal Amber has an 10% stake. This morning the company also sold over 1.1m treasury shares at the NAV to fund a purchase of a further position in NBNK Investments, giving it a total stake of some 17%. NBNK was the shell formed to buy bank branches from Lloyds and lost out to the Co-Op.



The top ten investments now account for just under 60% of NAV and include Thorntons, Sutton Harbour, 4imprint as well as Clean Leaf and API in which a just over 10% stake is held. Cash is a little over 10%. The share price continues to trade not too far away from NAV.

[paleje] 04/6/2014 10:05

That about sums it up meijiman, steady as she goes, right direction and won't need much of a pickup to send us higher. ST might have some comment, he's apparently got it on his list although I'm note sure he can add much at this time.

[meijiman] 04/6/2014 08:34

Alot of moving parts here -but net net it looks overall positive. Good cash conversion plus dividend. Continuation of H2 momentum should see these re-rate back up towards 90p plus over next few months I think.

[paleje] 08/4/2014 11:03

Numis issued a Buy note this morning, target reduced though from 90 to 84.

[davebowler] 08/4/2014 09:23

Equity Development;
The strength of API's performance in the second half of the year to 31 March 2014 was indicated at the time of the interims, and this has been confirmed in the company's trading statement. However, the weak first half of the year (relative to a strong period in the previous year) was not fully offset by the improved performance in H2, and consequently API's guidance is to the lower end of expectations.

Laminates saw volumes on the major new supply contract reach target levels in the H1; Holographics, which saw total revenues decline by almost 10% in H1, returned to breakeven in the last quarter; Foils Europe continued to make solid progress while Foils Americas suffered an unexpected weakening of sales volumes in the final quarter.

The trading statement reflects the company's flexibility and fast response to market conditions, and the success of the measures taken to enhance its balance sheet since a positive cash position should be reported at year end. Results will be released 4th June.