Coral Products Share Discussion Threads

[aleman] 10/3/2021 13:40

So I should have summarised my last post as £6m+ cash plus £3m+ from the property sale, plus some ongoing trading-generated cash since, takes the total to possibly £10m+ cash, meaning the trading companies that look to be generating a pretax of perhaps £1.5m+ seem to be thrown in for free or even at a slightly negative figure. There is uncertaintly in this but it would seem to make more sense for the market cap to be £20m than £10m. Of course, when the shares have been lower than the current price for a year, you will always get some drag in any rerating.

[zoolook] 10/3/2021 13:15

Be useful to disclose budgeted cost of roof repair. Can be expensive if asbestos is involved

[aleman] 10/3/2021 12:47

How do you get less than £6m? 8 days ago, the company reported it had around £8m of NET cash - not gross. Closing out the mortgage and CBIL loan does not affect the net position as loss of cash is matched by loss of loan. Knock off the acquisition and roof from that and you should stil have well over £6m.

On 24th of Dec, gross cash was £8.8m plus reverse CBIL liability topping it to £9.3m. Mortgage was £1.7m and other loans £0.8m. Net cash then was therefore £6.8m. £900k paid for the acquisition takes it to £5.9m but there has been 3 months of profitable cash generations since so net cash should be back above £6m. (I assume lease liabilities are met from revenues and leave a profit, though it might be lumpy. Payables and receivables might also swing it slightly.)

[clocktower] 10/3/2021 11:47

Sorry to correct you Aleman but there will not be £6 million remaining - Cash was used to purchase CPL, and to put a new roof on Haydock. Still, a considerable amount must still be in the kitty, and the cash grows every day because all three companies are profitable.

[aleman] 10/3/2021 11:38

What a transformation we are seeing. It is now conceivable that the run rate on pre-tax profit is £2m. With £6m cash remaining after paying off loan and mortgage, ongoing profits, and cash to come from the property sale, there could be a lot more to add to profit from acquisitions to top that £2m up to closer to £3m. Though acquisitions always have scope for the odd mishap, a market cap of nudging £10m still seems to leave plenty of upside. As per my previous post, J.G. likes dividends too, and there should be plenty of earnings this year and in future to pay out a substantial one.

[clocktower] 10/3/2021 11:00

With rent of £300k pa and savings of another £300k pa the numbers look even better than I think some have yet to cotton onto.

From the RNS:

"This will result in cash savings in interest and capital repayments of approximately GBP300,000 per annum."

So at a stroke that is a £600k turnaround and bearing in mind cash is not income generating that makes really good sense, as the company still has a considerable cash pile as well.

[clocktower] 10/3/2021 10:02

Looking at how stagnant the share price is, it would seem JG will have to do something amazing to get the share price to move far north, while we see so many junk AIM companies trading at numbers that bear no relation to assets or earnings.

As for property temelco, the boom in prices has in part been due to the likes of the NS&I reducing interest rates to almost zero - so many people have turned to investing in flats, and the flat owners have with the rising prices been able to sell to investors and loan more cheap money to move onto traditional homes, which in turn has escalated prices of homes.

The building boom is the way most governments see as a way of simulating the economy, and moreover it benefits the rich and increases rate and tax returns, as profits flow from the working population, that need to rent these new flats (mostly the young) into the hands of the landlords, which in turn get taxed on the profits.

While the young cannot obtain mortgages that are affordable, property speculators can borrow cheap money and the rich get richer without really lifting a finger.

However those that invested in retail or office property are catching a cold at present and I expect will continue to do so for some time. Everyone needs a roof over their heads and while people seek higher standards of living the bubble continues to grow.

[base7] 10/3/2021 09:50

A 6% yield seems high for that location but blue chip covenant with a decent yield should result in a decent offer by a pension fund/property company looking for revenue .I expect he will sell at some point but only when he has better use for the proceeds generating a superior yield

[temelco] 10/3/2021 09:26

Clocktower, well yes I suppose so but lots will depend on how the post covid property landscape develops and is seen. As an aside, properties listed in Glasgow at £350,000 are apparantly going for £435-450,000

[clocktower] 10/3/2021 09:20

temelco, I said almost but seriously would you not think 6% is a good return for a building that will be in very good condition (with new roof) with a decent tenant?

Still either way, the rent is £300k pa and charo has set out the numbers several times of the take on the current likely profits, which make very good reading indeed and are very conservative imo.

[eezymunny] 10/3/2021 09:18

The sale agreement was dependent on "(2) the completion of certain works at the Company's Haydock site, expected to be finalised on or before 31 January 2021."

Presumably the roof repairs...

[baner] 10/3/2021 08:52

a new roof should be less than a year´s rent. the property is probably worth 4m+ minus repair cost. maybe good to sell when there are many years to go on the contract - on the other hand, we earn 0% on the cash. under any circumstances; mr Grimmond is doing an excellent job for all shareholders! heading for 15-20p during 2021.

[temelco] 10/3/2021 08:35

Whatever else I think we can all agree the last few days have been transformative

[temelco] 10/3/2021 08:29

Clock tower I think that's a bit optimistic. You are implying £5m. I'd have agreed with 40-50% uplift.Im not sure why the price hasn't boomed. I do know there's very little if any stock with the MMs something they dont like when it looks good

[clocktower] 10/3/2021 08:22

With a healthy cash balance remaining after all debts paid, the cost of the roof of a big shed is negligible. Plus we know all three trading businesses are profitable and the option remains of selling off Haydock for a sum that exceeds book value by almost 100%.

[this_is_me] 10/3/2021 08:12

I hadn't realised that the Haydock property needed a new roof; it probably has needed one for a while and the provision of one may have been a provision of the 10 year lease. They have the option of just collecting the rent of GBP300,000 per annum (supporting a dividend of 0.35p or over 3% at current share price)or cashing out if they get a really large offer some time in the next year or two.

[temelco] 10/3/2021 07:57

I suspect they will sell Haydock any minute - they are not a property company and they are completely out of it. Who is paying for the new roof?

[base7] 10/3/2021 07:55

The vast majority of IIs would have no interest in little CRU which presents an opportunity for PIs to buy into what now can be expected to be a decent yielding stock with some growth potential.Historically our dividend yield ( in the few years it was paid ) was high & with no debt , profitable businesses & a decent net cash balance & could start at around 5% ( only costing around £400k,£300k of which is covered by rent received).I am more optimistic here for many years & would be tempted to buy more at these levels for my ISA/SIPP

[clocktower] 10/3/2021 07:25

That will make the large shareholders very happy I expect as investors that seek good dividends in these almost zero interest times will be rushing to include this in their portfolios imo.

[this_is_me] 10/3/2021 07:14

"...with three profitable, cash generative businesses, a strong balance sheet and a healthy cash balance. This will support organic growth whilst allowing for us to seek acquisitions to augment our existing activities and reward shareholders for their long term support."

This means that the rest of the businesses are not going to be sold off. Instead debts are going to be cleared, cash is going to be used for acquisitions and we can expect dividends paid out of ongoing profits.

[clocktower] 10/3/2021 07:08

More good news today. Hopefully the stream of these positive RNS will continue. I like the comments about rewarding long term shareholders.

When the property gets revalued it should almost double the current book value I expect.

[clocktower] 08/3/2021 15:34

I wonder if JG will soon be giving the new shareholders ( and old ones) a welcome gift by way of a small special dividend following the sale of the Coral Mouldings in Haydock?

Maybe another perks for them and us.

[clocktower] 08/3/2021 14:58

A warm welcome to another major holder and I am sure CPL will soon be a very successful and profitable addition to CRU.

[clocktower] 08/3/2021 09:56

This week I expect we have Lift Off.

[clocktower] 08/3/2021 09:43

Pop the Magic Dragon.