Avon Technologies Share Discussion Threads

[ch1ck] 16/2/2022 12:43

Conwy Certainly being cash rich is always an attractive proposition for a bidder but there is so much more than that.I agree with Jeffian the share buyback does not alway lead to shareholder gain but what I take from the response is the board are not in hiding and genuinely believe in the company and the work they doValue will be gained with more wins and better resultsI would like to see. Steady climb to levels seen 1 year ago

[conwyrebel] 16/2/2022 11:11

Sounds to me like they are positioning for a merger or sale of themselves.

[p1nkfish] 16/2/2022 11:02

What the shareholder feels is down to the shareholder. Fact is the EPS will improve over time as a consequence. The multiple placed on that EPS is down to the growth of the company and P/E that is likely to be compressed across the board for a while as market flows slow and liquidity is reduced.

[jeffian] 16/2/2022 10:50

" All things be equal this increases the value of each share. "

And therein lies the fallacy. All things are not equal. The value of each share in the shareholder's hands is not the underlying NAV or any other theoretical basis, but what Mr. Market will give him.

I can see I'm in a minority on this but if the shares stay where they are or go down whilst the company spends £m's of real cash, will all shareholders feel that they have had "cash returned" to them?

[ch1ck] 16/2/2022 10:37

So the rules are clear a company can not buy back shares and manipulate the price and restrictions are in place to prevent this.I am impressed with the level and standard of communication with share holders who ask sensible balanced questions

[ch1ck] 16/2/2022 10:28

This is the reply I received from the CFO today. Which is full of detail and hope is helpsThank you for your follow up questions regarding the share buy-back, which I have attempted to answer as follows. Given our immediate priorities of closing the armor business and reshaping the group around our core respiratory and head protection businesses, we have announced that we do not intend to initiate any major merger and acquisition activity in 2022. Given the strength and cash generative nature of the core business and our strong balance sheet we have concluded that a share buyback is a good use of the cash we expect the business to generate whilst M&A is off the agenda. The principle behind a share buy-back is that it reduces the number of shares in issue increasing the proportion of the business owned by each share thereby resulting in the earnings attributable to each remaining share increasing. All things be equal this increases the value of each share. Of course, on a given day or short period of time, there are many other influences on the share price, such as other news relating to the company, other similar companies, and the economy in general, so it's not possible to disaggregate all those influences. A buy-back also has the secondary benefit of allowing holders who are looking to exit, a liquid market to sell their shares into and thus decrease any "overhang" of stock which would depress the share price in the short term. Based on the current share price, the $25 million share buy-back programme should improve our EPS by c. 4 – 5%, which in theory should convert through into a share price rise of the same level. Given that in will take c.6 months to complete the share buyback the 4-5% increase will be achieved over the same c. 6 month period. As such the SBB will not result in a dramatic discernible move in share price in the short term or on any particular day. I should highlight that U.K. listing rules limit the number of shares we can by to 25% of the daily trading and put a ceiling on the price that can be paid of 105% of the average price over the last 5 days. It is these rules that are determining the level of shares bought on a daily basis and which drive the estimated 6 month period to complete the programme. More generally, the driver for delivering shareholder value is for us to continue to grow the business, with the contract win of the Advanced Combat Helmets for the US military, announced last week, an excellent step forward. As we continue to deliver growth across our portfolio and demonstrate we can deliver on city expectations for the core business, I expect this to be the main driver increasing share price.

[conwyrebel] 16/2/2022 09:13

One would have thought with all this Russian sabre rattling that military suppliers stocks would benefit

[p1nkfish] 16/2/2022 08:53

Ceiling at 1206p. Break through and a chance of a run imho.

[p1nkfish] 16/2/2022 08:50

Cost willbe be a fraction of what plebs pay.

[ch1ck] 16/2/2022 08:25

I don't know which is there broker

[conwyrebel] 16/2/2022 08:05

Good question. Aren’t they doing this through Jeffries the broker?

[ch1ck] 16/2/2022 07:44

Here is a question for all you clever people.Avon is in the middle of a buy back program and yesterday they reported the following purchasesDate of purchase: 15 February 2022 Aggregate number of shares purchased: 15,576 Lowest price paid per share: 1128.00 Highest price paid per share: 1154.00 Average price paid per share: 1143.60 It looks like they are trying to buy as many shares as they can when ever the price drops and did this Via a bot 200 times yesterday with some of these trades being for a few sharesMy question what is the dealing cost of each transaction if it is 10 pounds then it's thousands per day in dealing costs or do you pay a set fee to the broker which covers all transactions.If I was trying to move the price higher this would be the opposite to what I would do.So it seems to me we are paying to improve EPS not enhance share holder value via share price gain

[conwyrebel] 11/2/2022 08:37

Totally agree…it will get bought out so averaging down with this is best option right now.!

[p1nkfish] 11/2/2022 08:32

Theres no quick fix for the share price here outside of a sale of the company. AVON will be in purgatory for a while so a very good time to pick up shares cheaper than they would be.

The market might forgive but it wont forget for a while (6-36 months) and its end of the tax year soon too. I dont expect much change until after the summer, just imho. May be a reaction 30 days after end of tax year once losses are all booked etc???

[p1nkfish] 11/2/2022 08:29

Or if the price goes down less than it otherwise would.

[ch1ck] 11/2/2022 08:01

I sent a message to the CFO today asking if there was a strategy to the buyback program There doesn't seem to be Enhancing share holder value through a share buyback program only works if the price moves up

[p1nkfish] 09/2/2022 07:23

Yesterday close was £12 approx at 1.7x usual daily vol for last 3M.
Most transactions were new money as buyback was muted.

Date of purchase: 8 February 2022
Aggregate number of shares purchased: 5,765

Lowest price paid per share: 1145.00
Highest price paid per share: 1181.00
Average price paid per share: 1162.50

[ch1ck] 08/2/2022 21:09

Yes I do sorry

[p1nkfish] 08/2/2022 18:33

I think he means 2000p

[ch1ck] 08/2/2022 17:04

I think 200p is fair value till it proves it can generate cash with out dropping the ballThree more contract renewals and a few new contracts will do the trick

[p1nkfish] 08/2/2022 16:02

Happy to hold, problems are known here so in the open and more than priced in imho.
I see £15 as reasonable. Often wrong so dyor etc.

[jw330] 08/2/2022 14:43

looks like trend reversal in full swing here. Caught a load of short sellers out me thinks!

[p1nkfish] 08/2/2022 09:36

Ch1ck, and sharehoders want what is good for shareholders so go with what shareholders want. You can bet a special divi was discussed, or similar, or a tender offer perhaps, and all kicked into touch vs buyback.

[ch1ck] 08/2/2022 08:48

I have to a agree with Pinky on this. The board did say it was after consulting share holders the share buyback program was implemented.I'm just happy good news is out we should see a break out