Coral Products Share Discussion Threads

[base7] 07/9/2022 19:20

I have a decent holding ,accumulated over the years & held in one of the nominee accounts disclosed & I have no plans to sell so my holding is "sticky",ie not available for trading .Hillman & Wrights + a vendor of 1 of the acquisitions in May hold shares but why would they sell if they are receiving 8-10% on their original investments + the possibility of capital growth.Barber hasnt sold a share in the many years since he acquired 2mill.Due to the spread & low normal market size & capitalisation I would have thought Cru not to be a traders stock so most holders didny buy to flip & while the narrative remains positive why would you sell Cru now when it offers what many larger stocks dont offer -no debt,growth,substantial dividend yield (usually associated with companies about to cut not increase dividends)
My view is that many shares held in broker nominee accounts are unlikely to be traded as ,like you & I , the owners are happy keeping them tucked away in their/our SIPPs /ISAs

[ifaze] 07/9/2022 18:10

base7, agree with you about not planning to sell - this is one of my largest holdings. Just didn't and still don't understand your comments 11.02.

Nor do I understand comment re holders in nominee accounts being more likely to be Sticky Holders. Most day traders (and probably most PIs generally) trade via nominee accounts now!

[base7] 07/9/2022 15:11

Our 2 acquisitions in May generated revenues of around £19mill in their last years accounts & as they appear to have started well under our stewardship they could generate over £20mill in their first full year & JG suggested they should be earnings positive in year 1 + Net Assets acquired were around £5.2mill.Seems solid enough & the incentive for vendors to achieve their earn outs should keep them focussed.
The obvious downside is that we may be supplying markets which will be adversely affected by recession & our very weak £ ( V $) may impact on some cost of sales,but our strong cash position & fixed energy costs will result in difficulties for competitors trying to undercut us on cost.This is not a time to be dependent on your bank ,particularly to cover stock building & cash flow issues.As our subsidiaries are all in the Greater Manchester & Merseyside) areas it will be interesting to see whether it will be possible to rationalise our facilities by merging 1 or 2 of our subsidiaries into one production unit , to enable further reduction of overheads.
Currently happy with my investment here & regret not buying more at 5p ish ehen the opportunity arose !

[horndean eagle] 07/9/2022 14:09

I imagine we are going to get materially ahead as year progresses. Low cost energy contracts will mean they will be able to capture the upside when they raise prices in line with competitors. Will be well placed to make some cheap acqusiitions of companies who dont have the balance sheet to weather the current storm.

[base7] 07/9/2022 13:27

Ifaz -the larger individual holders are vendors of companies to CRU who took part cash part shares & those held in nominee accounts will often represent sticky holders .I appreciate that some vendors will want their cash when they are able to sell but our new non exec sold Interpack years ago & still retains his 2mill .Unless any shareholders need the cash I am not sure why anyone woikd sell right now as we offer the unique combination of a high yield + scope for capital growth .Appreciate that some will want out of all stocks in these uncertain times .

[clocktower] 07/9/2022 12:59

It would not surprise me if those 100k trades are director buys.

[ifaze] 07/9/2022 11:02

Base7, wondering what you mean by "Shares fairly tightly held...".
Looks to me like Joe Grimmond Lombard Int and Ian James between them hold 19.7%. A further 21.3% is held by 6 PIs and Premier Miton. That leaves 41% held by the rest of us.
And what do you mean by "...inferring insolvency looming rather than growth & no debt"?

[clocktower] 07/9/2022 10:43

While cash generation continues, it is important to retain a cushion to protect the group from any shocks that maybe caused by events beyond the directors control. So I am not keen on seeing JG buying anything other than small tack on businesses that are in desperate straights and to use the treasury shares to do so, using cash to turn them into cash cows for the future.

[temelco] 07/9/2022 10:04

Base 7 - for sure. At least he should be selling in a growing business

[hatfullofsky] 07/9/2022 10:02

I calculate we still have £4.8m of cash and treasury shares, post dividends and acquisitions. There will be better value in acquisitions than buy backs in the current market.

"The Board is continuing to consider the most effective use of the very strong cash rich asset base. We recognise that in today's low interest rate climate cash is a poor substitute for profit earning assets."

[base7] 07/9/2022 09:52

Shares fairly tightly held & Directors & some vendors of acquired companies have meaningful stakes resulting in their benefitting directly by our continued success.If they are motivated & the company continues to prosper their personal financial positions/wealth will benefit from dividend yield (8%)inferring insolvency looming rather than growth & no debt.Our sector will be affected by the current economic uncertainties but JG seems to have re modelled the Group well since disposing of our low margin business & property.Only a very exciting proposition would tempt me to sell right now & more likely to buy more should our share price revert to its usual malaise.
Still consider JG will be looking for a decent exit at some point in future

[clocktower] 07/9/2022 08:45

EezyMunny - a good part of the cash was spent in May at very good price levels, which will I expect to be seen as bargains - so I think that is already done and dusted, and JG will be prudent with cash - and note JG's remarks about "engender trust" - this is one of the few companies who's directors have not been driven by personal greed, and treated all stakeholders as partners imo.

"All the Directors of Coral believe strongly in the importance of good corporate governance for the creation of shareholder value over the medium to long-term and to engender trust and support amongst the Group's wider stakeholders."

[eezymunny] 07/9/2022 08:13

For my liking they sound too keen to make acquisitions of pretty ordinary companies. A recession may be coming.

Time will tell. Personally I would've sat on the cash until some bargains came along...

[base7] 07/9/2022 07:52

Our yield, to new buyers at our current share price is around 8% & if the 2 new acquisitions made in May are successful our revenues & profits will increase substantially again resulting in further dividend increases.Clearly JG is disinclined to buy back substantial numbers of shares with our very decent ( & presumably growing ) cash balances &is likely to continue seeking out bolt on acquisitions-& there are likely to be many opportunities in this fragmented industry & I expect JG & team to think carefully about how any prospective acquisitions may be affected by the current macro & micro economic scenarios.Confirmation of fixed rate energy deals was a pleasant & unexpected surprise which should provide relief to some doubters & allow a recovery in our SP
Hopefully the AGM statement later this month will give more details regarding prospects for FY23

[bishan bedi] 07/9/2022 07:37

Agree very positive.

I was expecting another 0.4p divi but that was based on nothing but hope!

[hatfullofsky] 07/9/2022 07:35

Extremely positive.

Revenue +35%
uPBT GBP 1.49m

Some key extacts

Review of all group energy contractual relationships to confirm all group energy needs are of a fixed and long-term nature agreed prior to the current energy crisis … and due to contracts already negotiated all its operations will remain relatively unaffected by the current turmoil in energy prices

The Board is continuing to consider the most effective use of the very strong cash rich asset base. We recognise that in today's low interest rate climate cash is a poor substitute for profit earning assets.

We have enjoyed a strong start to our current financial year and we look forward to a satisfactory outturn for the year given the prevailing conditions.

[clocktower] 07/9/2022 07:23

I have only skimmed through the accounts but first and foremost I want to say well done JG and the whole team at CRU. What a performance and delighted to hear that long term agreements were put in place before this energy hike that is causing serious problems to so many.

Outlook statement is very positive also.

[this_is_me] 07/9/2022 07:20

Very impressive set of results. Congratulations to the board for having long term energy contracts at prices well below current levels. That will result in huge savings and competitive advantage.

[clocktower] 02/9/2022 08:11

Has a new nomad been appointed because of the poor performance of the sp?

If you are not aware about the background to the old history of JG’s directorships, I suggest you ignore the list.

DYOR

[hatfullofsky] 02/9/2022 07:16

Change of advisor and a 20yr old rap sheet. This market may punish this news but I'm thinking, it's the past and JG has generated much value for shareholders.

[clocktower] 27/7/2022 14:24

With further price hikes in energy, I wonder if it will have any impact on any part of CRU's subsidiaries, as it would be good to hear from JG if there were any longer term fixed price contracts in place, and if not have the companies been able to pass on any extra costs at all, including transport.

On top of that to get an indication as to how the forward order book is holding up.

I am sure the share price would react very positively if the company was to provide a general update on these issues that are having a massive effect on the whole of Europe.

[base7] 21/7/2022 22:48

8/6-last trading update -FY22 profits ahead of expectations & FY 23 started well .Much can happen in 6 weeks but likely to have to wait for Finals in Oct to see how FY 23 is progressing & in the absence of news our share price could drift -presenting another opportunity for the optimists amongst us

[clocktower] 21/7/2022 16:31

Company buying 100k today maybe.

[clocktower] 19/7/2022 09:10

Someone picked up a bargain but if I was looking to find a home for more cash that brings a really top class return, there are few better places imo than in CRU.

Still, we know that there are headwinds ahead that might impact the business, so one must keep an open mind I guess.

[baddogrex1] 19/7/2022 08:58

We could now buy in at less than the Directors have been spending on their insider buys and less than the buy backs
However history tells a cautionary tale of the effects of a high oil price on Plastic feedstock costs.
Also we have inflation a weak Pound against the Dollar and a possibility of a recession
Sitting on my hands for now but buying more XOM