Share Name Share Symbol Market Type Share ISIN Share Description
Caparo Energy Limited LSE:CEL London Ordinary Share GG00B64BJ143 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 110.00p 0.00p 0.00p - - - 0 06:36:16
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Industrial Engineering - - - - 179.95

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Date Time Title Posts
10/8/201109:24Caparo Energy3
10/10/200917:30Celsis - Sales and Profits grow1,036
06/6/200815:22Chris Evans - Biotech Guru1,401
04/7/200708:03Celsis - Bios that make money23
14/6/200610:44Celsis- A New Start?4,209

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dpeach: I think we should all sit on hands at the moment and whatever shares you have hold on to them, at present we would still get 232.5 even if we hold them. I think as per DS in the FT on Friday the institutions are putting a slide rule over this one and probably aren't impressed either... 33% below research we paid for is taking the holding institutions and PIs for fools. From the F.T on Friday, David Schwartz column: Last Monday brought news that Celsis, one of my recent trades, was the target of a surprise takeover offer. Ordinarily, announcements of this nature are pleasing. But the Celsis offer brought little joy. The acquirer offered 232.5p per share, a disappointing premium over the previous day's closing price I do not understand why the Celsis board accepted this weak offer. Celsis is a steady profitmaker. Company-sponsored research by Edison suggests its fair value is almost one third above the offer price. Celsis pays no dividend although it can afford to do so. I suspect that a commitment to pay a reasonable dividend could have boosted its share price to a level very close to the offer price, assuming management wished to remain independent. Another point to consider is that the world economy is at the bottom of a downturn and an expansionary phase approaches. Market statistics suggest a bull market is underway. In this kind of environment, an independent Celsis will probably be worth more in the near future without a takeover premium. My conclusion is that the acquisition price is too low. I wonder why a major financial institution such as Gartmore accepted such a poor offer so quickly. I contacted Gartmore but no one was available to explain its decision. The deal is now quite advanced with 38 per cent of the shares already committed. Even so, I am hopeful that uncommitted institutional investors with clout will do the job that the Celsis board should have done and demand a higher price.
stevemarkus: I notice the board had pledged all of their shareholdings - a grand total of 1%. Says it all really. I now understand why the AGM statement was couched in those downbeat terms. Not at all happy with this - I would have preferred the company to start paying a dividend, or announce a cash return, either of which would have given the share price some impetus. Certainly not happy with the valuation put on the company by the offer considering net cash. Cheers, Steve.
go with the flow: Peachy - we have to be careful as both Swartz & Burns are no more than sophisticated 'tipsters'. CEL's share price is being manipulated more & more by the short term disciples that follow these guys. It is difficult to know if the price rise is due to underlying long term investing or just another short term blip! I think a lot of 'range-trading' is going down here. Otherwise uppola ;o) Flow
dpeach: hi silverfern (hello as presume in yesterday if followed FT, goodbye as presume sold out this morning) Also read the FT article I think DS was tipping for longer term, ref. the last sentence: "Management's focus on the bottom line helps to explain why Celsis has turned in six consecutive years of pre-tax profit growth and is on course for another increase. In spite of this sterling record, house broker Nomura notes that the company currently trades on an earnings multiple of 7.1 times historic earnings from continuing operations. This figure is significantly below its peer group multiple. It suggests to me that there is further upside potential for the share price when the economy begins to improve. Celsis is strongly cash- generative and has a healthy balance sheet. To my way of thinking, these shares are a safe place to park money in troubled economic times."
rivaldo: Ywp. Should provoke a bit of interest (Schwarz seems to be following me around given his interest in CAR as well!): "I eagerly await the next interim statement by Celsis, which is due to be released shortly. The company provides laboratory products and services to pharmaceutical and consumer products companies. Its upcoming statement will review third-quarter performance. I hold a small position in Celsis and might top up if the IMS is as positive as I expect. Celsis is on a roll. It has turned in six consecutive years of profit growth and is currently on course for another increase. And although its share price has drifted sideways in the last 10 months, the FTSE 100 lost more than one quarter of its value during this period. In other words, the company is exhibiting a great deal of relative strength which is always a good sign. The biggest operating division is Rapid Detection, which tests health and beauty products before they leave the factory gate. Customers get a 24-hour turnround service against a five-day turnround by some competitors. The company will soon reduce this to two hours – a significant competitive advantage. Its In Vitro Technologies division supplies drug companies with products and services to test new drug compounds in their early pre-clinical phase of development. According to Edison Investment Research, these two divisions contribute about 90 per cent of the company's total profits. A third division, Analytic Services, is having problems. One company in this group provides laboratory outsourcing to pharmaceutical companies. But clients have cut budgets in recent months, a combination of recession and potential threats posed by the new US administration. Nevertheless, Celsis claims that profit gains in its two main divisions more than compensate for weakness in outsourcing. The company also follows a "fix it or sell it" philosophy. It recently promised investors that the performance of Analytic Services will shortly be improved or the division will be sold. I shall study the upcoming IMS to answer two important questions. Are revenue gains continuing for its two main divisions? Are problems within Analytic Services being resolved? A positive answer to both questions could significantly boost share prices."
bookworm1: Stemis Ben Graham looked at company share prices during the 1920's great depression he observed that high growth companies (like celsis) that did not pay dividends got trashed even though they were delivering good results. Paying out a dividend (however small) had a greater effect in maintaining the share price when P/E's are getting rated down. Which is what we are seeing now. I accept that this is not an income share but it has paid out dividends of between 14 - 24% in the past and I am suggesting that if it has to moderate its growth plans (due to lack of bank lending/worries & market concerns about taking on greater debt etc) due to the current financial climate then restoring the dividend would help it through this period rather than cause it to become included with other growth shares that are being rated down. There are others who have been through events far greater than this before and sometimes it pays to learn their lessons. I agree with your last paragraph but the historical evidence suggests that a dividend payment however small can have three times the effect of eps on the share price. Introducing a dividend would help to maintain the share price. Whereas not paying a dividend would make it more suceptible to being rerated down if fear and panic sets into the market and that is when such a share is likely to be taken over at absurdly low prices. So we would be sitting on capital losses. My suggestion is a medium term strategy until the current financial storm has subsided. The Modigliani-Miller theory of dividend irrelevance is probably right in the long term because in the long terms it is earnings that matter. But as Adam Smith said "in the long term we are all dead" and in the short term survival is more important than anything else.
bookworm1: Guys it is worth more than that! If we take the current share price of 145.5p and projected eps of 20.68p for 2009 then we get a P/E of 7.0 and a Ben Graham Earnings & Dividend multiplier of 21.1 (145.5/(20.68/3 + 0)). When the company used to pay a dividend it paid out between 14 - 24% of eps. So if we assume a dividend of 20% of eps that would give a dividend of 4.136p. Using the Ben Graham multiplier earnings & Dividend multiplier of 21.1 would give a share price of 232.6p (21.1 x (20.68/3 + 4.136)) and that is based on the projected eps and assumes no further growth. If we use the same assumptions and applied this methodology to the 2010 projected results we would get a share price of 343.2p (21.1 x (30.5/3 + 30.5 x 20%)). If you look at this share as a growth share only then all that has happened recently is that the market is rerating P/E's down. In a normal market one would expect a price earnings multiple for a share like this in excess of 15 times which would give a share price above 300p. But as we are unlikely to see the market rerate P/E's for about two years and the market could still go much lower we should be arguing for the reintroduction of the dividend to support the current share price through what will be difficult times.
j m p: For your information, please find below positive feedback following Celsis' preliminary results presentation to analysts on the 18 June 08. Kind regards Jenny CELSIS INTERNATIONAL PLC Preliminary Results 2008 - Analyst Feedback INTRODUCTION AND SUMMARY The key points from the analysts are summarised below: • Celsis is considered to have a strong track record of profit growth and analysts feel that the Company is well positioned in its field • Analysts are excited about the market opportunity, and believe that Celsis has a solid story which differentiates the Company under current market conditions • The presentation was well received and the management team is well regarded by analysts • Analysts are perplexed by the failure of the share price to reflect the underlying business performance and remain supportive towards the business strategy • Celsis' focus on both life sciences products and laboratory services is thought to be a sensible approach • Although some analysts felt the Analytical Services sales have been disappointing this year, they are pleased with Celsis' overall performance • In summary, analysts were pleased with the results and look forward to seeing management continue to take the business forwards. PRELIMINARY RESULTS Overview Analysts are impressed with Celsis' track record of profit growth and were pleased to see another year of strong growth. Celsis is considered to be well positioned in its field, and analysts are enthusiastic about the growing market opportunity within the pharmaceutical and consumer products industries. Two analysts summarised overall sentiment: "I really like the business field that Celsis is in. Safety is a big concern for the FDA these days - the services and products that Celsis provides are well in tune with where the industry is at the moment and where it is going in the future. The Company has a consistent record of profitability and growth, both organically and inorganically, and the presentation was very good. Overall, I was impressed." "I thought it was a good presentation. It is the kind of business that is not wildly exciting, but that is exactly what is needed in these market conditions. Celsis has a solid story – the management team is making profits and the Company has fairly steady growth potential. I have spoken to others who agree that Celsis is an interesting company and there is an obvious discount to the underlying value." Management and strategy Overall, the Celsis management team is well regarded and analysts remain supportive towards the Company's current business model and strategy. Some analysts are perplexed by the failure of the share price to reflect the underlying business performance: "I have known Celsis for a few years – management continue to do what they say they will, and they are still delivering. I genuinely do not know what has to happen for the share price to move upwards." "Celsis is low risk - the Company is making profits and there is not a huge amount of debt. I can probably think of a hundred reasons as to why the share price should be higher." "I enjoyed the presentation. It is nice to see the business continuing its pace and the growth into new regions is very encouraging. I can understand Jay's frustration that he keeps delivering and unfortunately it is not reflected in the share price. I don't know what people are looking for." "The Celsis story is clear - it comes across well and is readily understandable by people. The Company has got growth and a good story - the only thing that does not appear to be working out is the share price." One analyst commented on the possible impact of the wider market conditions: "I am not sure what is going to move the share price. There are structural problems with some of the small cap fund managers at the moment – they are being forced to sell stocks in order to pay people who are withdrawing their ISAs, for example. We have to bear the ongoing wider economic concern in mind at the moment." Business model The Company's focus on both life sciences products and laboratory services was well portrayed and analysts agree that it is a sensible approach: "The message was clear and I like the focus on both services and products - products are easier to model, whereas services businesses only need to lose one contract to end up in trouble." "Celsis is not a biotech company, it has products and provides services – that is great in these markets because there is less risk attached, you can track the progress of the business and alter your view accordingly." "I think the blend of services and products is wise – there are higher margins on the products side of the business so that makes sense." One analyst commented on the performance of the Analytical Services division: "I think Celsis experienced some disappointment with the Analytical Services sales this year, it would be nice to see sales pick up again in six months' time. I think Celsis has a very sound business model and I think the Company is very well positioned." Another analyst would have liked more detail on the business segment profitability: "The profitability of the services division has fallen off dramatically. I know there was some transfer of costs between the divisions after the IVT acquisition, but I would have liked a bit more of an explanation on this - otherwise it looks like the transferred costs are flattering the other two divisions." Outlook Overall, analysts are pleased with Celsis' continued progress and expect to see more of the same going forwards: "Management need to continue what they are doing and accelerate the growth. However, although the Company has delivered consistently, even mid-teens growth at the moment may not be enough to excite people. I would like to see more focus on the sales and push the revenues." "Overall I think that management presented well and Celsis has a very solid story. Looking ahead, I think that management have to show that the business can be integrated and that it is on a steady growth trajectory – it would be nice to see if the Company can achieve more than sustained mid-teens growth." One analyst commented on a future dividend: "Management just need to continue what they are doing, stick to their guns and deliver. They may want to think about a dividend, which would attract a different kind of investor, but then the yield would need to be at least 4-6% yield to get anyone interested. They are doing all the right things, so I hope to see more of the same." Another analyst summarised their outlook for Celsis: "Celsis has got good sales, regional diversity and the Company is selling its products in rapidly growing markets. Outsourcing to the pharma industry in order to save costs and get quicker results provides huge opportunities – it is a very good market to be in at the moment." Conclusions and recommendations In summary, analysts are impressed with Celsis proven track record and think that the Company is well positioned in a growing market. There remains an element of frustration regarding the current share price, however analysts are supportive towards the current management team and the business strategy. Celsis' continued growth and profitability has generated interest amongst the UK analyst community, particularly as the Company is considered to be well positioned in light of the current market conditions and investor sentiment.
go with the flow: Thanks guys for the reassuring newsflow. Certainly the CEL share price has pull back more than I anticipated. I shall shall put my medium term hat on & hold for the moment. Flow
bearraider: the tax postion for celsis is a little confusing as i understand it the eps pre tax equates to the profit earned before tax the eps post tax takes the above and deducts tax paid BUT in celsis case adds the value of tax credit so that THIS YEAR will be the LAST when celsis post tax eps is greater than it's pre tax eps. I expect the interims and the finals for 2005/6 will for the first time show a lower post tax than pre tax eps as celsis has now brought in all tax credits due to past losses on to the balance sheet. However this will not be anywhere near the 30% level of a fulltax charge as celsis as enough tax credit to last at least 3 years at current profit level. make sure you own celsis shares in multiples of 5 or according to the small print all "leftovers" after conversion will be sold for the benefit of the company! I understand that to be listed on Nasdaq a share has to be valued at Above $1 however this may be irrelevant certainly in the short term as there is no proposal for such a listing. A previous post suggested it may be to make celsis more appetising to a us comany who wants to buy celsis however the cel share price is irrelavant as it is the share price of the company that is the purchaser that is relevant to the listing. ( except in a reverse takeover)
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