Carclo Share Discussion Threads

[queeny2] 22/10/2015 09:20

Hi Dontay.

If VW are, now, a major customer, and they had let's say a new Audi supercar on the blocks for 2017, does that mean CAR do or don't supply them for other vehicles, say other Audis, at the moment?

If it was Bentley, would they say Bentley or VW Group? I suspect VW.

If VW, as a Group, are fvcked, at the very least for cash for investment in the next five years, but also on their actual existence, and they are a current major customer, and they own Bentley, Bugatti, Lamborghini, Audi & Porsche, and CAR supply the supercar market ..... it's a chunk, anyway.

And as people have said above, the statement was a bit opaque. We don't know. And the market won't like that. I can't recall what part of the analysts forecasts for y/e 3/16 and 3/17 growth were automotive. (You will recall I think CTP is a low multiple business.)

[queeny2] 21/10/2015 19:27

Hello peeps.

Just catching up, I'm still short, mainly through laziness.

There is a very old stock market rule, which is being in suppliers to large car manufacturers is a horrid business, but this is a little different. I imagine the small shaving of this year's profits is on prototype payments as VW developed the car, which is now cancelled in effect.

Reading the statement, they say that VW Group IS a major group customer. Hence the price fall. I don't know what has happened to VW unit sales since the scandal, but they aren't the major customer you want at the moment, and there is still a risk that other car companies get sucked in too.

You could get another warning on this year, depending on how big VW is, and how much their unit sales fall in the relevant vehicles supplied by car led? And it is LED where they have been claiming the profit rises are 'baked in' iirc, which may not now be the case? How much of those future baked in profits were down to VW new flagship we don't know, but they are a volume producer unlike many of CAR LED's customers.

Can't really argue with a 20% fall on what I know after five minutes reading!

[rivaldo] 20/10/2015 10:25

Arden's new forecasts are 9.61p EPS this year and 11.9p EPS this year, with 3p and 3.5p dividends respectively.

CAR's recent core EPS record would therefore be:

6.1p to Mar'14
7.9p to Mar'15
9.6p to Mar'16
11.9p to Mar'17

Which is impressive growth. The "marginal" decrease in this year's forecasts will have dented confidence, but CAR are now on a good value rating, backed by a decent dividend yield. Confirmation that CAR will meet revised expectations should push the share price back to 150p+ imo given a PEG of only just above 0.5.

[dontay] 19/10/2015 22:28

Totally agree yump. And of course sentiment left over from the CIT debacle is undoubtedly still being felt... and the resulting loss of confidence could be another reason why, due to those very recent events and circumstances, this share price drop could be said to be a perfectly reasonable and understandable reaction... rather than what some have called an overreaction. Lack of trust is going to be very difficult to recover from for this company and they sure haven't helped themselves with the wording in this latest statement.

[yump] 19/10/2015 21:36

Actually it always seems that when a company is forecast to continue to grow profits quite fast, but then doesn't quite grow them as fast as it said, despite still growing them fast, the share price gets a hit.

Usually opportunities then, providing the share price wasn't reflecting a sky high rating.

I think CAR lost its claim to a high growth rating with the CIT stuff, which leaves it in the middle ground between 10 (boring doing nowt) and say 15 (moderate growth ?).

[the stigologist] 19/10/2015 20:22

Profit warnings always come in threes is the old adage

[dontay] 19/10/2015 18:52

Carclo's half year results stating that profits are likely to take a hit from what can only be fairly minor VW payments this early in the process... and that is being construed as a profit warning just doesn't make a whole lot of sense... given TP is well ahead and projected to keep forging ahead. Is it possible we are reading something into the statement which wasn't intended?The first part on the subject states "we anticipate that this announcement will impact the expected launch date of this vehicle (2017) and therefore the timing of anticipated related revenues for our Wipac business"... that makes sense... that's fine, somewhere down the line 'timing of anticipated revenues' for the Wipac business could take a hit or be delayed. But the last bit "The Board anticipates that the likely impact of the announcement from VW will mean the Group's full year performance (for THIS year) will be marginally below its previous expectations"... is that in fact a profit warning? IF 'previous expectations' were that full year profits were expected to well exceed last years (which we believe they were) but will now end up 'marginally below' JUST those expectations BUT still showing an increase over 2014/15 as bad as we are thinking it is?This announcement was rushed... and we know Carclo had only received the bad news from VW immediately before publication. Is the reason it doesn't appear to make much sense due to the fact that the wrong interpretation is being put on the wording?I dunno... just food for thought! Hopefully things will become clearer with the interims.

[beeezzz] 19/10/2015 16:37

Dontay....I hopes so, that is EV's, been investing in graphite.

[dlku] 19/10/2015 15:49

looks a bit wretched

[illiswilgig] 19/10/2015 15:16

I am certainly disappointed that management still don't appear to have learned (learnt if you like) to judge the right level of contingency across their businesses.

Yes, they probably got caught out by a number of factors coming together and you can't protect against a worst case - but this is apparently not a worst case, just a marginal reduction. Or are they understating their problems as well as overstating their forecasts?

hmmmm. I wonder.

[yump] 19/10/2015 12:14

Dontay

That was a very good point though. This year seems a bit early for any orders from VW, I'm sure lead times are not that long - perhaps there are some initial payments for design/prototyping/initial production run batch for testing... ?

[batham1] 19/10/2015 12:09

They did say only marginally lower. Fall looks overdone... top up time I think

[rivaldo] 19/10/2015 07:31

Excellent news - Aberforth have bought another 3.375m shares and are now up to 7.99m, or 12.12%.

A nice vote of confidence.

[dontay] 16/10/2015 18:34

Well at least Arberforth think they are now good value!http://otp.investis.com/clients/uk/carclo-diagnostic/rns/regulatory-story.aspx?cid=429&newsid=583378.

[dontay] 16/10/2015 18:00

Andrew, on the face of it I agree but I also think something has spooked the market and that something is due to Carclo maintaining that just one car which wasn't due to be launched for another couple of years anyway... is responsible for THIS years profit warning... which six months into the year are already ahead of last years equivalent period. Something smells IMO and if others feel the same... why what maybe (or maybe not!!) an overreaction.

[andrewbaker] 16/10/2015 14:03

The price drop due to VW has been greatly overdone, IMHO. Good reason now to buy more before the market realises it's underpriced.

[rivaldo] 16/10/2015 08:12

Singer's new forecasts are:

this year : 9.6p EPS, 3p dividend
next year : 11.1p EPS, 3.4p dividend

This continues the rising trend from 7.9p EPS last year and 6.1p EPS the previous year.

EPS from the core businesses will have not far off doubled in four years. CAR are however now on a forward P/E of only 11.4.

[rivaldo] 15/10/2015 16:03

Back from a meeting - decent bounce as expected from the ridiculous early sell-off. It wouldn't surprise me if the price bounced back to 140p or more over the coming weeks.

In particular, the interims on 17th November should look terrific compared to last year and may instigate a further bounce.

The year as a whole should still also show considerable growth over last year, with the promise of much more to come from the various expansion programmes.

[dontay] 15/10/2015 15:03

N 1 Singer... reiteration, was hold at 148p. New target 135p.

[dontay] 15/10/2015 13:15

My reading... VW's car wasn't in any case expected to launch till 2017 so I can't see that can be held solely responsible for the profit warning that's projected for this year. IMO it's more a case of the Euro weakness together with the capex associated with TP's expansion and probably with a bit of the engineering division's drop in orders thrown in that's the reason for it. The first half has been well ahead of 2014's so no real concerns. Also, though CDS is counted has being in the share price for free, that isn't IMO quite true... it IS eating money... and that will have to be justified at some stage or written off... so far, and after many years of development... it's not gone anywhere very fast to say the least.

[wageslave] 15/10/2015 12:48

Any ideas whether that 2 million trade (marked as a sell) is? The other big trades look like crossing and should not have impacted on price.