Dyson Share Discussion Threads

[shorewalk] 17/11/2008 08:14

2 x 125000 buys on plus market after close on friday?

[gordonbrown] 16/11/2008 20:08

think we will see a bounce next week...




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Sign InRegisterAutomotive industry slump drags down Dyson's figures



« Previous « PreviousNext » Next »View GalleryPublished Date: 14 November 2008
By Greg Wright Deputy Business Editor
SHARES in high-technology materials company Dyson Group plunged yesterday after it warned that the global slump in the automotive industry was expected to lead to a disappointing second-half performance.


The company, which develops high-performance materials which are used primarily in the automotive sector, also warned that it could breach its banking covenants next year if the downturn were to worsen.

The shares closed at 20p, a fall of 12p. In a trading update, the group said first-half results would be in line with management expectations, with underlying pre-tax profit of more than £3m.

But it said second-half performance was likely to fall "significantly below directors' expectations".

The Sheffield-based firm said: "As a result of the significant downturn in the global automotive markets, Dyson has experienced a recent and material reduction in demand for its Saffil and Ecoflex products."

The Saffil fibre operation supplies engineered fibre products into a number of sectors, including iron and steel, while Ecoflex increases the efficiency of catalytic converters and makes trucks more environmentally friendly.

In a statement, Dyson said automotive customers were "varying their call-off volumes according to market demand".

With volumes running at reduced levels, the prospect of sales for the rest of its financial year is "uncertain".

Dyson said it has notified both its banks, and will work with them "to resolve any covenant breaches that may arise in future". Cost and cash preservation measures have been put in place, and Dyson does not expect to pay an interim dividend.

The group said it had focused on broadening the Dyson group's customer base and progress had been made on sales and developing niche markets for Ecoflex and its Saffil fibre products. The company also said that it continued to have access to adequate liquidity, and all of its borrowings are unsecured.

Dyson is due to report its interim results for the six months to September 30 on November 27.

"The automotive industry is obviously suffering – particularly in the United States – and Dyson's second half will not be as good as the first half, which is disappointing but not actually that bad in the context of the sector. The company is only likely to breach its covenants if the situation gets very much worse though," said KBC Hunt traders.

In September, Dyson said volatility and uncertainty in exchange rates, interest costs and pension valuations were likely to affect performance.

In the same month, Dyson revealed that it had put its Fulwood Road headquarters up for sale for £1.4m, but it promised to stay in Sheffield.

Dyson, which has 120 of its 800 staff in Sheffield, has taken a small office in London's Victoria which chief executive Patrick Lammers and finance director Chris Kinsella will use when they meet investors.

[garth] 15/11/2008 11:53

No worries re the RNS jotoha.

The market cap is now just £6m with the company having been enjoying turnover of well over £60m.

US legislation on emissions will have a positive impact from 2010.

Previously secure divi of 4.3p (20% yield) and pre-recession earnings of 15.7p forecast for next year.

They had been sold well down before yesterday's RNS. They are now on less than 1.3x what they were forecast to be earning next year and just 2x what they will have earned before tax in the first half!!! Banking covenants have not been broken and KBC reckon we'd have to see significant further deterioration before they are.

I hope and believe that they will see through a difficult 18 months. Providing they do then the shares could easily be trading at 10x yesterday's close and paying a 20% divi based on the investment price. That presents itself as a sufficiently attractive risk/reward ratio for me.

But I've been wrong before.

G.

[gordonbrown] 15/11/2008 10:23

jotoha1 the auto market is only one sector they manufacture for, whilst I agree there is a down-turn the selling was way over done on Friday. I would image a recover range of 30p-40p next week, and if the G20 pull a rabbit out of the hat maybe even 40-50p trading range.

[jotoha1] 15/11/2008 09:41

GB....looks like I may of misread the RNS, still dont expect much joy here, all major auto manufactures are seeing massive downturns and laying of thousands at a time, we are only at the beginning of the cycle, based on whats happening in their industry covenants will most likely be broken and they will be forced to shore up the balance sheet by asset sales etc, will watch with interest!

[loverat] 14/11/2008 20:02

Very disappointed with what's happened today.

Mrs Loverat has gone into a panic about the parts being unavailable should the company go under. On the other hand, the kids are rejoicing that the 'headache maker's' days may be numbered.

[garth] 14/11/2008 19:47

From the prelims:

"£30 million of property value on the balance sheet, of which £13.7 million relates to property surplus to operating requirements which generated only £0.1 million income"

Net assets of £38m.

From KBC today. Banking covenants have not - as "jotoha 1" suggests - been broken. They may be broken next year and only if "the situation gets very much worse though"

"Shares in Dyson Group Plc plunge 45 percent to 18 pence after the
company, which develops high performance materials used primarily in the
automotive industry, says it expects to miss a full-year profit target due to
falling sales volumes and could breach its banking covenants next year if the downturn worsens.
"The automotive industry is obviously suffering -- particularly in the
United States -- and Dyson's second half will not be as good as the first half, which is disappointing but not actually that bad in the context of the sector. The company is only likely to breach its covenants if the situation gets very much worse though," say KBC Hunt traders.

Personally very disappointed with today's announcement - but used it as an opportunity to add.

G.

[jotoha1] 14/11/2008 18:40

This is very high risk , £30m of debt , and only £13m of property assets to play with , these of course were valued last summer so not worth that much now, banking covenants broken and orders drying up from auto customers, could go very low here or bust within 6 months!

[gordonbrown] 14/11/2008 13:52

small steps back up

G20 meeting this weekend with saving US autos on the agenda

[varies] 14/11/2008 11:00

Grim news but not, I suppose, all that surprising when we see the price of GM stock back at 1946 levels.
The Americans must surely revive their auto industry somehow and I imagine that Mr. Obama will be especially sensitive to the risk of mass unemployment in Detroit.
For the moment, as a shareholder in Dyson, I shall continue to lie doggo and hope for better times, misguided as this policy has proved hitherto !

[gordonbrown] 14/11/2008 10:19

have made a small punt (18k), kinda obvious any stock dropping 40% in one day will bounce, have set stop loss at 16p and sell order at 30p.

[gordonbrown] 14/11/2008 09:25

how high could this recover? could this be a takeover target by a car manufacture? seems very cheap looking at the chart,

[shorewalk] 14/11/2008 09:23

yes and you missed the entry point

[iglet] 14/11/2008 09:22

They don't make or sell vacuum cleaners, prat

[gordonbrown] 14/11/2008 09:13

profit warning and stocks oversold? people not buying vacs? or is the cash running out at Dyson? could this go sub 10p? looking for entry point

[sleveen] 14/11/2008 08:25

Oh no I won't

[sleveen] 05/11/2008 22:05

Tis time I will buy at 30p

[sharw] 05/11/2008 18:10

Here we go again 3k a time ATs with no buyers.

[sleveen] 31/10/2008 09:10

Thanks garth

I bought 2k shares @ 50.24p (8.58am approx)though the trade hasn't shown yet niether on Plus

[garth] 31/10/2008 08:39

Yes - 16k of buy orders at 46p, 3k to sell at 50p, 6,000 at 50.25p

If our 3,000 buyer takes out that 9k we're back to the 102p order.

G.

[sleveen] 31/10/2008 08:34

Garth do you have L2?

[garth] 31/10/2008 08:26

WINS & KBC back in with updated offer prices - 3,000 available at 48p then 3,000 50.25p After that its 102p again.

100p level is circa 10x forecast earnings, 6x 2010 earnings.

Yield just a little below 10% at these levels.

Interims due in about a months time.

Should be interesting.

G.

[sleveen] 31/10/2008 08:22

46-102p spread again