Devro Share Discussion Threads

[phillis] 26/9/2008 18:17

It has been a great performer in the last few days. Things outside the control of management: The Czech currency strength v the Euro and -MOST IMPORTANT - the £2.7m payment to the pension funds which didn't go through the P&L. How long will such payments need to continue?

[treble in 1999] 23/9/2008 12:45

We can see that the share is heading for a breakout. I believe it will be up slowly and steady. With the dividend cover also, its a better bet than most financials and AIm stocks at present. The states think that the dow is on the way to 9000 over the next 2 quarters. I somehow cannot see that on this share on earnings and fundamentals. Hope wall st sorts itself out, too much speculation in these "interesting times".

[balcony] 19/9/2008 07:51

Treble-I have noticed days of large volume and the shares going into auction on a couple of times,But yesterday i think i just was getting ahead of myself,as you point out a good dividend and the shares have not fallen over the last six months.

[treble in 1999] 19/9/2008 07:35

balcony what makes you think a bid is on the way. If the pension stuff is nearly sorted, this company is easily worth north of 120p, and probably will be this time next time. Downside, very little, and it pays dividends

[balcony] 18/9/2008 10:34

Bid on the way,I hope so anyway.

[engineer66] 01/9/2008 15:10

Tks Felix99 for helpful insight in to the pension. I can see it as a poison pill so deters a new bid. So what do you reckon on the prospects for this firm? Trading ought to remain very strong if sterling contines its downward path.

[scrapman] 01/9/2008 10:03

400k through and a penny or two movement , this is in danger of becoming interesting !!

[ydderf] 31/8/2008 07:39

I'm out @ small profit- the results diappointed me, no dividend increase and no eps share growth and so-so outlook, why bother?

[felix99] 29/8/2008 08:15

well its not surprising - its a pretty volatile pension scheme with huge assets and huge liabilities. A few % swing each way can have a big affect as we have just seen. Also they are heavily invested in equities which have a higher assumed return than bonds. Bonds will reduce the volatility but to move assets from equity to bonds means assuming a lower overall growth rate for the scheme assets which therefore means a bogger deficit. Rock and hard place

[treble in 1999] 29/8/2008 08:13

Did the 2007 accounts show what the actual deficit was to the pension fund. I am still struggling to see how much has been charges to P&L. The other reserves rise significantly, and there is no note what these are, but the Retained earnings on the balance sheet actually drop £13m. So it may seem that the pension scheme costs are post bottom line, but then they are tax deductable, so no tax charge would arise. Would like to see the makeup of other reserves. Nice smallish director buy, they all seem to have been buying this year, so perhaps now these results are out, and better, then the market and institutions may start to add this to their portfolios and the share price rise accordingly. Divi yield seems good at these levels.

[phillis] 29/8/2008 07:59

NB It was the pension fund deficit which caused the breakdown in the talks with Acomita

[phillis] 29/8/2008 07:56

Yes sorry -early in the morning(for me any way)

[felix99] 29/8/2008 07:51

Cashflow is not same as profit and loss. Cashflow shows what they paid into the scheme which goes straight to reduce balance sheet liability. If you look at 2007 annual report http://www.devro.plc.uk/documents/Annual-Report-2007.pdf Page 60 of pdf - the amounts charged to the profit and loss are :.......£1.4m odd. Then go to note 33 page 70 ish. The cashflow movement paid into scheme was £4m odd. Two separate thnigs. As i said the £1,4m is meant to reflect the cost of effectively borrowing the defecit from the pension scheme each year

[phillis] 29/8/2008 07:32

Felix Thinking about the treatment EDIT I think you second para is wrong. Yes the movement on the liability has been charged directly to reserves (and more than offset by the impact of currency changes on the balance sheet) The increase in annual payments into the fund has been charged within the P & L as shown in the cash flow NOTE 11

[felix99] 29/8/2008 06:53

PEnsion liability movements go through reserves not the profit and loss account you see each year. Also the £4m odd contribs per annum into scheme go straight to balance sheet and do not hit p and l The only thing that hits the profit and loss is the notional cost of borrowing of the pension liabilitiy. So if you got a £30m liability the only thing that hits your profits each year is the recognition that the company is borrowing £30m off the pension scheme . i.e interest on the £30m. or whatever the laibility actually is. Also remember if the company wants to pass the liability to an insurance comapny and get rid of it then as a rule of thumb you need to multiply the IAS 19 balance sheet liability by about 2.5 times. .e if accounts say £20m then insurance buyout is more likely £50m. So its a big headache and a posion pill for anybody wanting to take over company There will be a big increase in contribs needed when then next 3 year actuarial review is due to be looked at . This will affect cashflow not profits though as above.

[treble in 1999] 28/8/2008 20:32

Pension provision is not yet cash paid. awaiting to see if markets recover before having to actually put the cash in. What I am struggling to see clearly is "has this been taken from the profits for the period". For a provision to be in the accounts as a liability, it must show somewhere as being provided. By definition this is from the profits, so am i saying that they are actually £13m higher. 2nd half of 2007 saw this provision increase nearly £8m, so we have put aside £21m in a full year. If the markets recover, does this mean we get that added to profits, or will no further provision be made and higher profits declared. What we need to know is that the end of it?

[engineer66] 28/8/2008 17:17

Trading side looks good. Pension thing really dessimated their total recognised income for period. eps not looking great, so share price not surprisingly a bit subdued. Any views on this pension provision?

[phillis] 28/8/2008 16:35

See the retiring Chairman is putting hid hand in his pocket again

[phillis] 28/8/2008 12:22

Price increase will take care of cost pressures. Currency now moving in DVO favour. Outperform

[engineer66] 27/8/2008 14:28

I'm in. Export sales should be buoyant. Fingers crossed for tomorrow.

[cockneyrebel] 26/8/2008 15:25

Frauddy, I'm glad I bought in over the past week - timing :-) I reckon my average is 10% below yours. Direcetor buying, new directyors and the china sausage angle look interesting. CR

[phillis] 26/8/2008 12:34

Looking forward to the webcast which I think is a first. On the basis that nobody likes to show themselves as a nob,I anticipate pleasant news!

[zeppo] 25/8/2008 15:41

Hoping for a tasty divi rise with the results this week. z

[treble in 1999] 22/8/2008 13:49

What i like from the finals, is the current year has started in line with expectations, which as H2 2007 was better than H1, they should be ahead. director's buying also at prices above today, when they were not in a close period. I'm in. results next week