Apc Technology Share Discussion Threads

[jailbird] 13/1/2016 22:26

"It should give investors here some reassurance that I am invested here'
I am sure Cantor are very re-assured you are..lol..are you one of their clients?

That is a very arrogant thing to say!!

It does not matter who is invested in any stock...institutions, directors' buys or astute respected investors. So many get it wrong.

And btw I am not re-assured by your investment here.

I am more impressed by Kempche's analysis, who is not following just brokers' notes.

[simon templar qc] 13/1/2016 21:16

kempche,

Brokers forecasts project cash-flow figures, debtors, creditors etc.

All I can say as I have looked at figures carefully and taken on board recent financial review taken last year and satisfied with what the company has achieved.

Have also spoken with management since results I would not be invested if anything concerned me.

I am an activist investor who does not sit back if I do not like what is going on. It should give investors here some reassurance that I am invested here, if things aren't to my liking I will seek to ensure something is done. I have a large investment in EKT management there are being sued as a consequence of unfairness against shareholders and over wrongdoing by directors.

[kemche] 13/1/2016 20:34

Simon, With the greatest respect just a couple of points, which although minor, are I think salient nevertheless:

You show that:
Cash at Bank:

2015A £1,239

which, whilst technically correct, does not really paint the whole picture I think. The company are far less coy about it as they have declared:

"The Group's net debt at 31 August 2015 was GBP1,986,000 (2014: GBP326,000). During the year under review the Group had an invoice discounting facility with ABN Commercial Finance of up to GBP6,000,000, of which GBP2,543,000 had been drawn down at the year-end (31 August 2014: GBP752,000). The Group has no other bank debt."

You then go on to claim that the company "has little debt". Hmmm. A debt equivalent to 128% of cash holding may be considered by some to be a trifle more than "little". And do notice the move in the net debt position since the prior year. Oh, and this was after a £3.4m fundraising. Quite a feat I think you would agree.

You then claim that the company is "expected to be positive cash-flow this year". Expectations are by their very nature in the realms of possibilities but I think as an investor one needs to concentrate on what is probable. So what is the probability that the company with Net Current Assets (that which can be liquidated) of £8.2m pay its Net Current Liability (that which must be repaid) of £11.2m - that is a shortfall of £3m! From a company that has a net debt of £2m.


You state "I happen to think CF forecasts are quite conservative." I would suggest that an objective analysis of the accounts may actually lead one to believe the complete opposite.

But if Cantors have said so then who am I to argue? Those boys know their onions.

[rinson] 13/1/2016 19:51

Thanks Simon. I agree and obviously APC need to prove themselves to the market this year. Hopefully good news on current trading at the AGM February 25th will lead to an upgrade from Cantor.

[simon templar qc] 13/1/2016 19:34

rinson

See my figures above I have EBITDA of £680k for this year.

edit:

Mike, adjusted eps 2016 0.44: 2017 1.31: 2018 2.37

I happen to think this years forecasts are on the low side particularly if the company continues to gain traction as the year progresses.

[rinson] 13/1/2016 19:24

Michael - I said a 1.9m positive swing not 1.9m PBT. 2015 was -1.5M, year ending August 2016 is forecast 400k PBT.

[simon templar qc] 13/1/2016 19:19

The figures I have given exclude a number of items, amortisation, interest, exceptional items, depreciation etc.

The easier figures to understand is EBITDA (earnings before interest tax depreciation)

EBITDA

2015A -1-106
2016E 680k
2017E £1,745
2018E £2,750

Other figures

Cash at Bank:

2015A £1,239
2016E £1,317,000
2017E £2,660,000
2018E £4,981,000

Overview:

Company has little debt and expected to be positive cash-flow this year, I wouldn't worry about talk of any placing.

I happen to think CF forecasts are quite conservative.

[100michael] 13/1/2016 19:07

Hi Simon
Do you have the eps forecast figures for 2016 and 2017 please?
Thanks

[100michael] 13/1/2016 19:05

rinson - thanks, but do you mean Cantor are forecasting PBT of £1.9M for y/e August 2016?
ie not 2015

Simon Templar - you have seen the brokers note - is the £1.9M figure on the note?

Thanks

[simon templar qc] 13/1/2016 18:55

Rinson,

Last year the company made a profit of £696k on sales of 12.658m in their distribution business, this year the brokers are forecasting operating profit of £971k on sales of 12.9m.

With sales in first quarter exceeding 3.5 million in the distribution business the forecasts look very conservative.

Cleantech made a loss of £1.m on £18.4m this year forecasts are for £899k operating profit on sales of £17.6m. The reduction in sales due to ensuring the operations are profitable.

Brokers feel the company recovery and action to stem losses is now complete!

The brokers have indeed indicated a potential upgrade to come particularly if the company makes further progress and further contract wins.

I'm not at all worried about the fall in today's share price volume is very low.

[rinson] 13/1/2016 14:17

I am told Cantor are forecasting a £1.9M positive swing on F15 PBT. With APC reported to have cut annual costs by £1M and to be phasing out unprofitable product ranges it's not rocket science to realise that this is achievable with very little new business not yet reported. IMHO news of another new sizeable contract would precipitate a broker upgrade.

[jailbird] 12/1/2016 19:08

Some welcome contract news will be boost to the price I am sure.

However it would be nice to read about 2016/17 broker forecasts..2018 too long away for me to have any interest. These forecasts can change so much by the time 2018 comes along..positive or negative

[simon templar qc] 12/1/2016 17:13

Hi guys, thanks for supporting the new thread and posting the links.

Have now obtained the latest brokers note. Brokers are now looking for 2.4 pence in 2018.

When I have time I will provide more information.

Share price relatively strong on small turnover today I suspect we will not see much downside from here.

Brokers reiterate price target with a hint of upgrades to come. All subject to further progress.

[playful] 12/1/2016 15:51

I expect we will see a big uplift in news flow over the coming months culminating in a lovely “we are exceeding expectations” RNS on full year figures.

[rinson] 12/1/2016 15:42

playful: This is a great story and thanks for posting. I think APC have been offering this service for over a year; maybe it looks just too good to be true. Install LED lighting, save bundles of money and only pay us for it out of the savings. What better guarantee is there?

Once the first fines hit for failing to meet the ESOS deadline at the end of January I think we should start to see a flurry of news releases of companies taking up this offer. I know if someone offered me the service in my home I would bite their hand off!

[playful] 12/1/2016 15:03

Time to see the light

[playful] 11/1/2016 13:49

Haringey Council

Now complete, the new LEDs have reduced lighting energy consumption by an average 68%, with the greatest savings achieved at the River Park offices, where additional lighting controls have resulted in a 77% reduction. -

Minimise finalised the new lighting design for each building, reducing the number of fittings needed wherever possible, installing lighting controls to maximise savings, and ensuring optimum lighting levels.



Also ....

[simon templar qc] 10/1/2016 19:29

CF forecasts Nov 2015

Company forecast to have a positive cash-flow this year of £339k and £1,264 in 2016/17

I do not see a need for either a further placing nor the need for loan notes.

Forecast cash on deposit: 2016 £1,312,000 2017 £2,308,000

Forecasts very conservative in my opinion as first quarter trading has exceeded management expectations.

[simon templar qc] 10/1/2016 18:53

Stay long say charts...

[simon templar qc] 10/1/2016 18:50

New thread with forecasts....

[simon templar qc] 10/1/2016 18:47

APC Technology PLC is a technology company its core businesses are:

Interim results ending 28 February 2017:

-Operating profit before exceptional items of £0.4m, representing a significant improvement from the £0.1m operating loss in the comparative period

Outlook: "The Board acknowledges that there is much more work to do, not only to continue to improve efficiency but also to grow revenue.  Having achieved profitability, positive cash flow, and reduced balance sheet risk, the focus now is on leveraging supplier and manufacturer relationships within our existing technologies. Our immediate aim is to increase the order book and cash generative sales.  We feel confident that this will occur in the coming periods."

eps pre exceptional items 0.3 pence

Net debt at the end of the period was £2.9m, including £0.2m of cash, £2.5m drawn on the invoice finance facilities and £0.6m of unsecured loan notes from shareholders (due July 2018). This is down from net debt of £3.2m at 31 August 2016, a reduction of £0.3m in the period.

-£8.25m first half bookings for the refocused business with March 2017 Group bookings of £2.1m underpinning confidence in the new business model and a profitable outlook for the full year
 
-     Significant follow-on orders received from long standing customer relationships and significant new orders gained through new preferred supplier agreements signed with major blue chip customers

-The Board is confident that the core business can grow organically. Our suppliers are very supportive and many have seen strong growth in their non-UK markets. With a renewed attention to the basics of the design-in distribution business, we expect this same success will be reflected in the UK market over the coming years.

[simon templar qc] 10/1/2016 02:56

So how do I know that the brokers are right this time?

-Well for a start the company has already seen near 4 months trading in the second half.

-The numbers haven't worsened in fact they have been strengthened by recent contract wins.

-The company has removed some fixed overhead costs.

-Concentrated on profitable work and eliminated poor value work.

The brokers have looked at their forecasts and what the company has done and are satisfied their forecasts will be met.

Does anyone remember the last time the builders were in recession and had to buy work? I do. The builders are now one of the most profitable sectors.

The way I look at this company is they have grown at an expediential rate the last year they have made a number of mistakes and refocused. With a number of months trading under their belt I think the company is now on the right course.

Its a leaner company now and a refocused management its not long to wait before we see whether the refocused company will deliver.

[simon templar qc] 09/1/2016 22:51

As for Cantor I appreciate that brokers do get fees from companies but they also have

[simon templar qc] 09/1/2016 22:51

As for Cantor I appreciate that brokers do get fees from companies but they also have their own clients to consider the cost savings the company implemented should make a difference the current year. The brokers appear very positive following the results:

"Electronics and environmental services group APC Technology Group (LON:APC) is looking ahead to the new year with optimism after a testing twelve months.

On Thursday, the firm released its full-year results to August, which saw sales jump 51% to £31.1mln compared to the year before, and pre-tax losses narrow to £2.1mln.

APC conducted a strategic review after the period, focusing on its water and component distribution business and its LED lighting subsidiary Minimise group.

As a result, “the 2015 loss before tax was heavily impacted by one-off costs, losses from discontinued businesses and overhead increases that have now been removed from the group,” chief executive Richard Hodgson said.

Since the year-end, he added, APC has also removed £1mln of annualised costs.

The review followed problems in the generation and American businesses.

Cantor Fitgerald said: “It is reassuring that there has been no further deterioration in either numbers or outlook.

“With recent contract wins in all the business divisions we remain confident in our forecasts,” the broker added.

The final results come after the firm announced earlier in the week that its LED lighting division Minimise Group has won several major contracts worth a total of £1.15mln.

It is part more focused strategy on the profitable businesses, Leonard Seelig, chairman said.

“2015 was a challenging year for APC but with the business now stabilised and a clear new strategy in place, there is cause for a renewed sense of optimism,” he added.