Chamberlin Share Discussion Threads

[zoolook] 30/3/2017 07:55

Wow. Not the best investment then (so far). Must have paid for itself in dividends though.

[redartbmud] 30/3/2017 07:40

Bought Chamberlin on 16 Sept 1991 @ 96p

[zoolook] 29/3/2017 23:02

You're welcome.

The operations are in a good place now and with the machining facility they now have an integrated offering to the market which should be an attractive proposition to customers - even potentially those who do all their machining in house currently.

Given they are at only 50% capacity at the foundry means new orders for castings will magnify profits though if castings are then machined they will have to add a new line which will be operationally straightforward (they have space for 3 more)but require investment in a new line - though given the long term nature of the contracts it is a relatively low risk investment.

I'm excited by the prospects - you can probably tell!

[chrisis33] 29/3/2017 20:52

Thanks for sharing all the info.

[zoolook] 29/3/2017 20:24

Thanks for update rhomboid

In summary for any wanting to explore the investment case here then useful reading background is:

Newspaper article revealing eye catching EPS forecast from the Cambridge Punter (aka hastings)
www.cambridge-news.co.uk/business/business-news/chamberlin-shares-could-engineer-growth-12285139

A company paid research note: hxxp://hardmanandco.com/docs/default-source/company-docs/chamberlin-plc-documents/21.03.17-turbo-charging-into-a-new-growth-phase.pdf

CEO's presentaion notes at opening of new machiniing centre last week:

[rhomboid] 29/3/2017 17:34

Well I've read the note and have reversed my stance altogether, I've bought a few as a result, I like the decisive action in closing Leicester site and think the future may well be far more positive given the growth opportunity in turbocharger mkt. I'm not enamoured with the remuneration policy but sometimes you just need to take the rough with the smooth..

[cockerhoop] 29/3/2017 12:05

From Hardman

The turbocharger market for automotive industry is projected to grow at a CAGR of
7.63% to reach a market size of $18.49 Billion by 2021. The market is driven by
factors such as trend of engine downsizing, stringent fuel emission norms, demand
for better fuel economy and performance, increasing vehicle production and other
factors.

[cockerhoop] 29/3/2017 11:51

I did plough through it...........just can't remember the details :-)

Will have another look!

[zoolook] 29/3/2017 11:40

By the way has anyone ploughed through the Hardman report yet and picked out anything interesting? It is quite a daunting document

[hastings] 29/3/2017 11:40

No problem, thanks again.

[zoolook] 29/3/2017 11:37

It was obviously mainly about the Foundry and Machine shop. The new LED products were mentioned in passing as doing well and are used in the new machine shop The Petrel MD wasn't there. It is the business I know least about. Sorry

[hastings] 29/3/2017 10:44

Thank you very much Zoolook nice informative summary, appreciated.In at 69p but would add a few more around these levels, certainly so, if there is any drop off.As an aside, was there any mention on Petrel, last time I spoke with Nolan and Roberts it was suggested New LED offerings were picking up business both in and away from the traditional oil&gas/mining.

[zoolook] 29/3/2017 10:39

Maybe but at least it ties them in for 3 years as I read it

[redartbmud] 29/3/2017 10:36

Zoo I have never underestimated the scale of the turnaround. They have done an excellent job. Company policy on share options isn't very clever. Didn't realise till too late that you could go to the machine shop opening otherwise I would have attended.

[zoolook] 29/3/2017 10:03

Bearing in mind this has been a difficult turnaround situation where shareholder returns are realistically going to gain proper traction in 2018 onwards I'm not sure that is a fair comparison in terms of the longer term shareholder value they are likely to generate. Personally I don't begrudge them a penny but I can see how at a distance others might think differently

[rhomboid] 29/3/2017 09:40

When I last looked in 2015 he was paid a total of 326k and didn't own a single share, that struck me as way too much, and out of kilter with shareholders returns. I've just checked and this dropped to 255k in 2016 which is still generous compared to similar sized businesses in the engineering field, he also was gifted over 200k of nil cost options in December 2016 which vest between 80 & 120p which again is v generous at shareholders expense. This is in addition to over 900k of options that are now in the money between him and David Roberts.

[zoolook] 29/3/2017 09:11

Are you saying they are overpaid?

Didn't ask directly but Nolan isnt a stocks and shares man ie he is the exact opposite of the wheeler dealer spivvy type AIM CEO on-the-make if you know what I mean. Dave Roberts the same. This is Nolan's first listed company. I don't know their stakes but I wouldnt read anything into them not ploughing their own money in.

[rhomboid] 28/3/2017 22:49

Thx zoolock , great report , did you get any sense as to why Directors are well paid but not major shareholders?

[zoolook] 28/3/2017 22:16

So general feedback and impressions are entirely positive which allayed my nerves as I am now grossly overweight here.

The event was invitation only for customers, investors and suppliers. The company is now no longer firefighting and has a growth plan with purpose and direction. I could probably write an essay but the main issues the main takeaway points for me are:

-The Hardman report was issued publicly because before it was done inhouse by their former NOMAD? but their current adviser doesn't do this as a private service so they had to commission it separately so they thought they might as well make it publicly available (ie no behind-the-scenes softening up for a rights issue)
- They did talk about their plans for a new disa foundry and sell the current site to a housing developer but this would be predicated on order growth and bearing in mind the existing foundry is only 50% utilised we are looking a few years of order book growth ahead before this happens though if/when that does happen the scale of the investment might mean a right issue to fund it
- It is a MYTH that they only supply to the diesel turbocharger market. Most of their turbocharger housings are currently for petrol engines!!! and they only have a miniscule % of the market so significant growth in a flat mainly untapped market is entirely possible
- Their cleaning processes are unique to them and give them a competitive USP to customers in getting rid of sand over European competitors who are restricted by environmental legislation
-I worried that now they machine that might mean they deliver finished product lineside on a JIT (Just In Time) basis to assembly plants. Fortunately not so. This is a good thing as they are not running the risk of ruinous line stoppage charges if they fail to deliver

I asked the CEO if I could put his presentation in the public domain and he said yes so you can find it here (hopefully):

I think they are well placed to win new orders due to drop in sterling, improved QCD reputation, reduced internal costs from productivity improvements and with the spare capacity in the foundry production can be ramped up with little investment.

Spoke to Exidor MD too and things seem to be going well there too.

Great narrative all round. If price drops back I will buy more. Certainly wont be selling at the current share price Good times.

[hastings] 22/3/2017 12:38

Be good hear your general feedback and impressions if possible.

[zoolook] 22/3/2017 12:21

Ill be attending the Machine Shop opening tomorrow.

Let me know if there is anything specific that anyone would like asking

[hastings] 22/3/2017 07:55

Figures suggest a PER of 8 falling to near 5 next year and that should be nailed on given existing contracts underpinning. Currency a real plus too. If as should be expected all on track then the 2019 pencilling in of 23.9p looks doable.

[coolen] 21/3/2017 23:35

One bear sign is that Hardman, the analysts involved, are known to be paid by their subject companies for producing research, sometimes ahead of a cash raising.

If a cash raising is imminent, then we hope the story this time is better than that dribbled out at any time during the 30 years I've known this company.

[chrisis33] 21/3/2017 22:29

Also agree this is a good idea, providing a good overview for investors.