Armour Group Share Discussion Threads

[graham1ty] 25/2/2013 14:31

AGM summary
Only two attendees. With over 2500 shareholders, most of whom have lost most of their money, a few more might have made the effort........
c45 minute open frank discussion with Board keen to engage, even with some quite blunt questions. No attempt to cut the meeting short as so often happens.
Q: yr own brokers note says "the profit recovery is now being generated by internal actions". You have cut almost a third of the workforce. Is there anything else to cut if revenue does not pick up ? Answer ( my précis): yes, we could always cut more, but not really without damaging the business. There is only so far you can go. We believe we are now the right size, in terms of overhead
Q: the statement says you have a 2% increase in gross margins. Does that give you a bit of a cushion if there is no pick up ? A: We have already cut £5.7m from overheads. The increased margin does give some comfort. Note also that there are another £1m of cost savings to come through this year
Q: you spend £1-1.5m per annum on R&D. Is that all necessary ? A: we have to, to keep in front, to keep leaders in all our fields. R&D is investment in future sales and in the future of AMR. It is expensive, but money well spent we believe
Q: yr brokers have no forecast decrease in net debt for two years. All free cash ( c £1-2m pa) is soaked up by R&D or interest cost ? A: yes, there is a balance. We have to invest in the future of the business. We have to balance the needs of the various parts of the Company. We believe we are getting that right and are comfortable with the debt position
Q; will the Chairman's loan ( due July) be rolled over ? Yes ( I do not think that is price sensitive, in my defence it was stated openly in a public meeting)
Q: talk about the balance between Home/Automotive ? A: we would probably not have predicted this balance 5 years ago. Automotive has built an incredibly strong position with commercial, particularly agricultural vehicles. The Home division has been far weaker than we would ever have feared. It is however, as announced, now back in profit. Retail as we all now has been far worse than anyone could have predicted
Q: the CEO is paid £190,000, but after 15 years has only £60,000 worth of shares. Mr Chairman, is that the right balance of exposure to the Company ? A: when the share price was 80p he had a rather larger interest........ Q: why are you not buying ( the Chairman cannot as he has 29.9%) ?: first there is no stock available. Second, do not have the money to do so. ( GTY comment, that is a bit lame. There has been stock around. Second......paid £190,000 and got no free cash !!!)
Q: ( from other shareholder) with yr Scandanavian business, would you consider a dual listing ? A: that business is not enormous and we are not a household name. It would be expensive. Q: can you buy out some of the 2500 shareholders, and save costs on distribution of the AR ? A:wish we could, but very difficult to get behind nominees and actually get to the underlying shareholders, particularly in CREST. We may only distribute the AR electronically ( except for those who actively demand paper copy). Is the website up to date ? Not as much as we would like.
That is all I am going to put down. I felt the chance of this going bust has diminished. They may or may not be right about having passed the lowest point, however, through harsh cost cutting, they have significantly reduced the risks. Even with no increase in revenue, I felt they will get through.
There was not a focus on the debt and no ( stated) great concern about bringing net debt down immediately ( driven by the Company or the lenders). Bob Morton has stood behind them this far and gives the impression he will continue to do so. He gave an air of cautious optimism. All Directors do. However, in AMRs case, I left the meeting feeling they were possibly justified in feeling a little more optimistic.
PS. I welcome any correction to the notes above from the Board or NOMAD. I hope they reflect accurately the discussion and I will correct immediately if it is felt I have misrepresented the views of the Board

[knigel] 25/2/2013 07:23

Loverat, thanks for the thread - will DYOR and consider an investment here later this week. GLA

[graham1ty] 25/2/2013 07:21

I was at the AGM and took part in c60 mins of questioning. Will try to post a summary later today. All cautiously positive

[loverat] 24/2/2013 22:36

Well, lets see how this gets on next week. Certaintly looks like a reasonable recovery prospect at a buying price of 4p. We will see.

[loverat] 23/2/2013 14:32

Please let me know if you want anything specific included in the header etc. Might as well do a reasonable job of trying to make this as informative as possible and getting this company back on the radar.

[loverat] 23/2/2013 14:25

I decided to create a new thread as this is outdated and was inappropriately named after the vain fool that created it (i.e me!).

[loverat] 23/2/2013 14:23

This is the full statement from Armour Group. Still risks as the company is affected by the wider economic climate - but very encouraging nevertheless.

I think this company presents an attractive opportunity for investors and traders alike and it will be interesting to see if the share price moves as it did last year. If so, it will then be fascinating to see whether the share price can sustain the uplift.


22 February 2013

Armour Group plc ("Armour" or the "Group")

AGM Statement

Armour Group plc, the UK's leading consumer electronics group focused on in-car communication and entertainment and home entertainment markets is holding its Annual General Meeting at 12.00 today. George Dexter, Chief Executive, will make the following statement:-

"The new financial year has started encouragingly, with the Group returning to profit at an operating level with gross profit margins improving by over two percentage points and operating costs down a further 15% on a like for like basis. Both the core divisions of Armour Automotive and Armour Home have traded profitably and in line with expectations, with Armour Home delivering a significant improvement on the prior year. In terms of funding, the Group is operating comfortably within its available facilities.

Armour Automotive has made a steady start to the new financial year, with profits broadly in line with last year. A combination of new products and good operational control has positioned the business for a strong second half of the year. In the commercial vehicle market, the new radio platform for agricultural vehicles and our driver monitoring system, which is designed to improve driver safety and fuel economy, are both generating exciting sales prospects. In addition, the recent launch of our second generation of iO branded in-vehicle music streaming and hands free solutions has created opportunities across all our sales channels, both domestically and internationally. Armour Automotive continues to be a strong business and our expectation remains for year on year growth in its operating profits in 2013.

Armour Home has made the single biggest improvement in the Group, returning to profit with a turnaround of over GBP450,000 in its operating performance after the first five months of the year. The business has continued to focus on improving gross profit margins and lowering operating costs, whilst maintaining a steady programme of new products launches. This strategy is working well and the programme of new products scheduled for launch over the coming six months is expected to further consolidate Armour Home's recovery and maintain its return to profitably.

The Group has made good progress over the past year. The return of Armour Home to profit coupled with the continued strong profitability of Armour Automotive, provide firm evidence that the actions taken by the management team to turn the Group around are working. There remains a considerable amount of work to be done in re-establishing the Group's financial performance and whilst the retail facing markets served by the Group remain fragile, there is now some positive economic forecasting for the sector that provides grounds for cautious optimism. The Board believes the Group will continue on its path of recovery and, with its much reduced cost base and improving margins, is well positioned to benefit from any wider upturn in the economic environment.

Further Details:

George Dexter Armour Group PLC Tel: [phone]

John Harris

Geoff Nash finnCap Tel: [phone]

Ben Thompson

Stephen Norcross (broking)

22 February 2013

[loverat] 23/2/2013 14:17

After some years of mixed fortunes and a declining share price, Armour Group has issued a statement indicating that a recovery is underway in both its Home and Automotive businesses. Costs seem to be under control and a return to profitability on the cards.

A well known company which produces high end entertainment, audio and communications products.

The company is launching new products and receving significant orders for its impressive range.

This thread is for discussion of this company which has been under the radar for a number of years. With improving sentiment and indications of an improvement in trading, investors and traders may see this as a recovery play for 2013 and possibly beyond.

[jamie62] 22/2/2013 14:11

Thanks loverat...i have had a look at the result and been tempted into a small buy...the upside looks encouraging but i would to see some momentum before making a bigger inevestment. However, looking like it could be positive from here.

[loverat] 22/2/2013 14:04

jamie62

The spread is often like this. I think with this one you sometimes just have to take a chance before the news and buy on the dips (this fell to 2p not long back for no reason) What I try and do is either buy early doors (this one always takes a while to move) or take the plunge and just have a look at the chart for this time last year and remind myself of where this could be in a few weeks/months.

It is not shall we say a traders share but still money to be made.

[jamie62] 22/2/2013 13:59

would love involved but the spread is prohibitive!

[loverat] 22/2/2013 13:25

Yes - more interest and some decent buys going through. Folks beginning to see the short, medium and possibly long term potential here. I held these over five years ago at over 50p. Basically the same business I think and if the management can maintain focus we will be quids in.

[loverat] 22/2/2013 08:49

Probably be more interest later. There usually is here and momentum always tends to build up slowly after results. Glad I gave these the once over again.

[graham1ty] 22/2/2013 08:33

Would love existing holders to pick up a few more. Going to be difficult to get anyone new in here until much more progress, but those who know the business ( and are Morton believers....) should be buyers after that.

[loverat] 22/2/2013 08:21

Not a stampede first thing but if I recall steady momemtum is the MO here.

[graham1ty] 22/2/2013 07:50

Great brands and market leader in its niches. Just rubbish areas to be in; homes and automotive.

However, some of the brands must be valuable, as brands, and there is real embedded value here. Hope Morton sticks with it and they keep their eye on the ball. Need first statament that net debt is falling.....

[loverat] 22/2/2013 07:48

The hint that progress was being made was in the last results.

To be fair, the fortunes have been mixed over the years and to a large extent guided by general market conditions. Also management kept letting things slip.

This statement hopefully represents a departure from all that and we should see this move back up big time. It is a reasonable business after all.

[liberatingsteptoe] 22/2/2013 07:45

Positive, progress, profit..... Could we be onto a good thing? I certainly hope so!
LS

[graham1ty] 22/2/2013 07:11

Blimey.......a positive statement out of AMR.......a rare bird, not been seen for a number of years......

Now all we need is some positive cashflow and an indication that the various Director loans can be paid back and then the bank lending brought down.

[graham1ty] 21/2/2013 08:34

Is the AGM tomorrow, so trading statement first thing tomorrow.

Presumably positive statement about the new contract ( but no numbers yet). BUT, can they say anything on cashflow, working capital and the awful debt position. The New Loan from Morton runs out in July. Will he bankroll this indefinitely ? Even if they can announce that it is profitable in 2013, how many years before the bedt position back to normality ?

the prelims promised that AMR was returning to profit this year. If they can restate this tomorrow, might it bounce ? Widows and orphsns only......but possibly worth a short punt ?

[kendonagasaki] 17/2/2013 21:14

The business model here is all but dead? Borrowings x additional loan x payments x current share price x a miracle!!All is lost! Buy some more if you thing it is a viable bussines model with a unique pos????. Don't hold hold your breath all!

[loverat] 15/1/2013 08:49

Interesting. This seems to have a run up this time every year. Last year it was 8p before the retrace. With the last statement mentioning encouraging signs in the Home Division and this contract I think perhaps another good run is due. The chart patterns and behaviour often a good marker for the future. Capped at 2-3 million for a company that turns over 34 million a year and with this contract.

Not the company this once was but a potential opportunity to make a three bagger perhaps. GLA.

[loverat] 15/1/2013 08:03

That explains part of the reason for the rise over the past few days. Probably partly to do with the previous fall (which I missed) and possible leakage of news. Perhaps this is due for a recovery as that contract looks good.

[callumross] 14/1/2013 16:31

Seems to be life in the old horse yet . Some buying interst since the turn of the year although broker forecasts are for little more than breakeven in the current financial year to August. We always get an AGM trading update in February so guess we will have a better idea of current trading then. Maybe a recovery stock but is going to have to recover a fair bit to get me back to break even!

[watermelonman] 14/1/2013 09:02

Any hope in a dead rocking horse?