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CRU Coral Products Plc

10.70
-0.05 (-0.47%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Coral Products Investors - CRU

Coral Products Investors - CRU

Share Name Share Symbol Market Stock Type
Coral Products Plc CRU London Ordinary Share
  Price Change Price Change % Share Price Last Trade
-0.05 -0.47% 10.70 16:11:27
Open Price Low Price High Price Close Price Previous Close
10.75 10.50 10.75 10.70 10.75
more quote information »
Industry Sector
GENERAL INDUSTRIALS

Top Investor Posts

Top Posts
Posted at 27/1/2024 09:22 by valuschmalu
Lets revisit my October 23 post. I've added new comments in CAPS
-pace of acquisitions in 2022 raises eyebrows. It may be that these are 'deals of the century' but the counterargument is they got overexcited (again) by being cash rich and spent it too quickly. The prior M&A record is not 100% perfect and I would rather 1-2 a year rather than 4 or so in short order then silence EXPECT SILENCE FOR A WHILE ON THE BUYING FRONT
-the buy and build strategy only works if you buy at a significantly lower multiple to where you are trading. So CRU needs to be trading at 8x EBITDA and buying at 4-6x. SEE ABOVE
-The way to getting to 8x (+) is to generate steadily growing EBITDA over time with minimum volatility. Yes COVID etc hasn't helped but CRU is synonymous with earnings volatility. What it needs to do now is beat last year's EBITDA level and do it again next year etc. The recent trading update will (fairly or unfairly) make a lot of people think 'here we go again' HERE WE GO AGAIN
-Given the above comment about earnings vol, debt is too high at 2x. They need to get it down to 1 to 1.5x. For a stronger more consistent company, 2x leverage is fine but we are not there yet with CRU. We are also in a higher rate environment and what was acceptable leverage last year is no longer the case HENCE DIVIDEND CANCELLED
-The easy way to get leverage down is not to overdistribute via dividends and buybacks. Unfortunately to cut the dividend would smash the share price so I don't think that's the way forward. Deleveraging will have to be done the hard and slow way via earnings retention. That also links into the above comment on M&A. I struggle to see at 2x leverage how they can safely do any more M&A in the short term. The big 'unless' here is unless they sell a subsidiary. Global One-Pak may be an option? I know JG rates it but there has been a lot of earnings vol from this company since acquisition THIS IS THE POTENTIAL SILVER LINING FROM THIS LATEST DISASTER IN THAT IT WILL ALLOW THE NEW CEO TO RESET THE DIVIDEND POLICY TO SOMETHING THAT IS COMPATIBLE WITH A BUY AND BUILD STRATEGY. HE SHOULD ALSO LOOK AT DIVESTMENTS WHERE THERE ISNT MUCH REMAINING UPSIDE LEFT
-They should appoint a CEO as soon as possible. I expect it will be one of the recently appointed directors but I doubt institutional investors love a 70+ year old being exec chairman (and not having a CEO)TICK (HOORAH)
Posted at 07/10/2023 08:43 by valuschmalu
My uninvited thoughts on where we are now with CRU (all IMHO):
-pace of acquisitions in 2022 raises eyebrows. It may be that these are 'deals of the century' but the counterargument is they got overexcited (again) by being cash rich and spent it too quickly. The prior M&A record is not 100% perfect and I would rather 1-2 a year rather than 4 or so in short order then silence
-the buy and build strategy only works if you buy at a significantly lower multiple to where you are trading. So CRU needs to be trading at 8x EBITDA and buying at 4-6x.
-The way to getting to 8x (+) is to generate steadily growing EBITDA over time with minimum volatility. Yes COVID etc hasn't helped but CRU is synonymous with earnings volatility. What it needs to do now is beat last year's EBITDA level and do it again next year etc. The recent trading update will (fairly or unfairly) make a lot of people think 'here we go again'
-Given the above comment about earnings vol, debt is too high at 2x. They need to get it down to 1 to 1.5x. For a stronger more consistent company, 2x leverage is fine but we are not there yet with CRU. We are also in a higher rate environment and what was acceptable leverage last year is no longer the case
-The easy way to get leverage down is not to overdistribute via dividends and buybacks. Unfortunately to cut the dividend would smash the share price so I don't think that's the way forward. Deleveraging will have to be done the hard and slow way via earnings retention. That also links into the above comment on M&A. I struggle to see at 2x leverage how they can safely do any more M&A in the short term. The big 'unless' here is unless they sell a subsidiary. Global One-Pak may be an option? I know JG rates it but there has been a lot of earnings vol from this company since acquisition
-They should appoint a CEO as soon as possible. I expect it will be one of the recently appointed directors but I doubt institutional investors love a 70+ year old being exec chairman (and not having a CEO)
Posted at 05/9/2023 12:25 by ohisay
Positive trading outlook

Importantly, the positive momentum has continued into the new financial year, adding weight to Cenkos’ expectations of 15 per cent growth in annual cash profit to £4.45mn to drive pre-tax profit up 8 per cent to £2.45mn in the 12 months to 30 April 2024. On this basis, the shares are priced on a price/earnings (PE) ratio well below seven and offer an attractive 6.7 per cent dividend yield.

The six directors hold 19 per cent of the shares, so the payout is rock solid, and it means that debt levels are kept in check. Net borrowings of £7mn equates to 1.6 times forecast cash profit and implies balance sheet gearing of 50 per cent, so leverage remains comfortable.

The lack of institutional following and a small enterprise valuation of £21.9mn are the key reasons why the group is below the radar of investors, rather than operational underperformance, since the board embarked on its buy-and-build strategy two years ago. It’s a rating worth taking advantage of as the potential for strong profit growth and acquisition-driven upgrades should support a higher re-rating, hence why I suggested buying the shares, at 14.75p, six months ago (‘Alpha Research: This deep value small-cap bargain could pack a punch’, 6 March 2023).

To put the upside potential into perspective, a multiple of six times cash profit to enterprise valuation for the 2023-24 financial year implies a more reasonable PE ratio of nine and would drive a 36 per cent uplift in the share price to my 22.5p target price. Buy.
Posted at 06/3/2023 18:11 by hatfullofsky
In the Simon Thompson - Investors Chronicle article he has a target price of 22.5p on a EV/Ebitda multiple of x6 FY24 earnings, giving a PE of 9.

I'm much more bullish and am looking for 30p driven by new products and group efficiencies.

Nice 8% dividend too
Posted at 14/12/2022 16:14 by charo
Did you attend investor meeting very clear exposition from FD and chair.
Posted at 13/12/2022 09:47 by jimmywilson612
For a novice investor like myself - How much debt do CRU have? I've read through the report and it appears that it now holds circa £6M of Net Debt.

Looking at the Cashflow Statement - Decrease of Cash for the period from £7.5M to £3.8M. However, £4.7M of cash left the business to investments. £864K already paid into the talked about £2.5M Capex investment.

However - if removing Investments - it would have been circa £1M in free cashflow for the 6 month period. So realistically could be generating £2M per annum in cash.

That seems reasonable to the Debt they've taken on. The big unknown is how will alot of acquisitions will in a short period of time effect the business.
Posted at 13/12/2022 09:23 by clocktower
Do you really want to keep adding bits here and there and taking on more and more debt at a time when rates are high and the future is far from certain.

JG can bang the drum as much as he likes, as I guess he has an exit plan and could it in due time lead to another motor type crash once he has moved on - but one where there are few survivors.

Maybe investors should ask if he has any medical issues or how soon does he wish to retire during or before the online meeting, so he may address the question that has been discussed on the thread many times, in the past.
Posted at 12/12/2022 23:58 by base7
JG referred to the benefits becoming more apparent in H2 so let's see.Wednesdays Investor Meets will be interesting as Cru have never previously involved themselves in charm offensives.Perhaps they have another acquisition in mind but want a higher share price to reduce the number of any share consideration.I would expect lots of bolt on opportunities arising over the coming months
Posted at 12/12/2022 14:58 by clocktower
Investors in the UK do not like manufacturing companies, so while the results are good there are warning signs imo. So good luck if your going to hold but investment is going to swallow some of the profit, so slowing possible growth of dividend.

I no longer think it is undervalued but good luck but imo it will slide back to 15/16p before long.
Posted at 02/12/2022 08:56 by clocktower
Not the case at all base7 - I wish you all well and I have said many time that based on the dividend this should be 20p+ but in view of all other aspects going on around the world and the rising interest rates etc. One has to look at the possible downside risk.

JG's age is another major factor and while he has turned the fortunes around, they are still not where they were some years ago.

This has been one of the best investments over many years, through getting on and off the waves of price movements, not in term of steady growth. Remember there must still be numbers of investors that paid more than 20p a shares, and how many more shares are there now?

Your ideas about CVA's are not mine - forms of manipulation are not practices that should be considered desirable imo.

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