One further thing for novice punters looking at the now historic PE ratio and thinking this looks cheap, firstly, PER's aren't the 'B' all end all valuation metric and are irrelevant in a situation when growth projections become uncertain.
The forward PE for next year could be as high as 70, it will definitely be well over 50 at today's current market cap - 35.5m
IMO |
Owenski: Thanks for the summary of possible projections. IMO the silence is a precursor of a storm. |
Cash position was 19m at March this year, it's now 13.5m
Cash going down, although some of that might be spend on inventory, but it doesn't quantify.
If they do get a 30% reduction in revenue and operating costs remain the same - likely, unless they're making redundancies, then revenue could be as low as 19.1m and
Gross profit 14.3m if they maintain 75% GM
Hopefully cost of sales will be lower??? but the rest without reduced head count will remain the same.
If their expenses remain broadly similar - 6.9m sales and 13.9m admin (can't see cost of sales staying the same obviously, it has tended to be 20 - 25% of revenue, so it should fall to 4.75m ish)
So rough ball park - 4.75 + 13.9 = 18.65
Rev. 19.1- 18.65 = PBT of 0.45m, could even tip into a loss.
Ball park rough estimates only at CLX's 30% lower estimates.
Not good though is it and with an uncertain outlook.
Personally, I don't think CLX looks cheap, no wonder that director dumped his stock.
NAI |
VV fair comment.
1 buy to 5 sells today.
Looks like complete capitualtion.
Doesn't look like Instis, but we will see via Rns updates over the next few days.
I believed that it is a well maneged business, and was generating cash for fun.
If the orders cease, there is little to be done in the short term except ride it out.
cash in the bank and 'orders' still on the books that might be filled one day. The whole industry cannot stand still forever, and they have a reasonably healthy cash buffer... for now.
red |
Red - just from the real negatives posting I would guess only Don't have any insti evidence of shortsWould possibly be too small / illiquid for intis to playMaybe a holding in co RNS due |
Lots of volume here today.
Might be the capitulation day.
Best of luck. |
VV
Evidence of short positions?
red |
Some dishonesty towards shareholders going on here in my opinion. |
They were in 'close' periods surely. |
This was on my watch list. The trading update was dire. It just takes basic arithmetic to see that profit will be wiped out in FY24. And these situations ... they always get worse than initially admitted. FY25 seems a long long time. Had a look at director selling ahead of the two profit warnings, agree with earlier remarks the sales really stink and surely, surely, they were making use of inside knowledge that the company performance was deteriorating ?? |
Large prints just gone through- first potential attempt at a bottom here? |
Sharesurfer1: I definitely agree with the red flags you pointed out. I think this will go far lower than where it stands now and I won't even be surprised to see staff leaving if it stinks rotten fish. IMO any business model without at least 50% visibility on revenues is doomed to fail as it survives in a probabilistic world - basically a lottery. |
Staggering drop / fall from grace this From 195p in January to well under IPO price nowAgree about the guy who dumped shares Questions should be asked Almost feel company needs to put a further announcement out, this is such a mess |
There's a long list of apparent insiders selling ahead of profits warning. I dont recall ever seeing anyone convicted from insider dealing.
Perhaps lots of people have credible defences? The VP of Bus Dev should know that sales are slow, he/she might claim that they dont follow equity markets or what analyst forecasts are, and therefore wouldnt know whether its material or not. No idea...but I wouldnt waste your time waiting for something to happening with the trades which you mention |
 I have taken my time to analyse this, as calnex is suffering alongside the market in general, and there is opportunity that a rebound makes the current pricing very opportunistic. But there are a lot of things within their RNS submissions that pull up red flags.
1. VP of business development didn’t just sell shares before the most recent trading update, they did it right before the negative February update aswell. As have a number of VPs within the business over the last 12 months. Surely the regulator needs to review the timing of these sales, as once is unfortunate, twice in quick succession and before a 70% drop in value linked to revenue a business development VP would have clear visibility of - well that stinks. I would be shocked if all the VP team didn’t have visibility of the position that was coming.
2. VPs were issued essentially nil price options of considerable volume 2 months prior to a negative trading update. Who approved an LTIP scheme of this magnitude in the current trading circumstances? Very inappropriate, and I would suggest not aligned with the current size or position of a smaller aim business.
3. The 3pm release of the trading update stinks, I struggle to believe an experienced board do this by accident. Some serious credibility questions need answered. |
Why would any director buy? The VPs were all issued share options with a vesting of only 1p, 2 months before a trading update that crashed the share price due to under performance (which they would all have been aware of) |
And yet no director buying ! Unless their arms are too short to reach their pockets ... |
48p was the ipo price having just reminded myself |
Now below floatation value.
Strangely, no director buying at these extremely low levels.
Shall we understand the share value will drop further ? |
From the admission doc;
"Manufacturing
Calnex has outsourced the manufacturing of its products to Kelvinside Electronics since 2007. Kelvinside Electronics is a specialist manufacturer of advanced electronic products, operating from a custom built 40,000 sq. ft. facility located in Kilsyth, Scotland.
Calnex utilises real time sales information with which it can optimise the production and manufacturing processes. The Company provides Kelvinside Electronics with rolling forecasts of product orders and regular face-to-face contact ensures that procurement and production schedules are efficient. Kelvinside Electronics manages the procurement on behalf of Calnex and maintains a base inventory of key materials which enables flexible manufacturing. Calnex provides technical product training to Kelvinside Electronics’ engineering team.
Calnex business represents over 20 per cent. of Kelvinside Electronics’ revenues and the Company has become a key client for Kelvinside Electronics in recent years. Calnex’s management team has reviewed Kelvinside Electronics’ Disaster Recovery Plan. From their worst-case predictions of outage, Calnex has modelled its financial response to produce a contingency plan to deal with such an event. The typical lead times from customer order to delivery (4-8 weeks, with 12 weeks not
unusual), provide Calnex with the ability to prioritise manufacturing such that equipment and component inventories can be maintained.
Whilst Kelvinside Electronics currently is the sole manufacturer of the Company’s products, Calnex’s management team monitors the availability of alternative UK-based contract manufacturers with comparable capability and is satisfied that in the unlikely event of a manufacturing issue, the Company would be able to manage the situation until the outage was resolved or production was moved to an alternative supplier." |
Great point APAD. Small company with c. £11m sales and 11/12% PBT margin. If I have the right company, accounts and confirmation statement appear to be overdue at Companies House (see Kelvinside Electronics (Number 1) Limited). |
I have been speculating about the private company that does the manufacturing for CLX. It is a special relationship and as things are bad for CLX they could be worse for their manufacturer. Because it is a private company we have no means of knowing whether it can/wants to weather a recession.
apad |
Shorters dream |
Agree on a mid 30's entry price, let's see how things are looking when they announce their results on 21st November though. Spirent appears a far safer bet & also pays a dividend, so as you say the upside needs to be very significant to tempt decent money to buy & hold. One thing is for sure, there will be some major opportunities when the macro does turn, the key is avoiding the profit warnings between now & then! |
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