Electrocomponents Share Discussion Threads

[bellyboy2] 21/9/2005 13:56

just to throw a figure in the mix: sub £2 before feb anyone?

[bot_man] 21/9/2005 13:14

excellent stuff. great to see posters increasing, a debate beginning to develop. could this signal a change in fortunes? whatever, think theres huge money to be made out of this stock either way, can be some big moves.

sitting very solid at 245 today, going to be interesting to see which way it moves next. shorts - hope youve got the balls to stick with your views ;-)

regards

[mythicalman] 21/9/2005 12:37

what do you expect the price to be this time next year?

[madgooner] 21/9/2005 12:29

"The Board expects that Group profit before tax, and one-off costs for the 6
months ending 30 September 2005 will be around 30% below last year."

PE on historic showing as 16. Times 10/7 = 22?
NTA £200M which will reduce by c £30M if dividend maintained, Debt c £120M

This would leave it NTA at c £170M and Debt £150M (other things being equal - which of course they aren't)

Not a sensible approach against a declining performance.

Completely wrong?, perhaps, but at least illustrate why..

[bellyboy2] 21/9/2005 12:28

plank - it is possible to have a strong business and be encompassed in tough trading terms. NOT contradictory.

shall i make it easier for you:

LONG TERM - not good

SHORT TERM - even worse

MEDIUM TERM - good


is that enough of an enigma for you?

[bot_man] 21/9/2005 12:23

bellyboy2, thanks for your post.

however it is contradictory >>> market place is a real concern in the long term >>> the business model has and always will be very strong >>> short term ... teething problems

what are you trying to say?

[bellyboy2] 21/9/2005 12:02

collection is right - the market place is a real concern in the long term. ECM have to move more from OEM's into the service sector for any real growth gains. don't get me wrong - the business model has and always will be very strong. short term the transition to new SAP systems in the next few months will likely cause lot of teething problems

[bot_man] 21/9/2005 11:39

bots, madgooner also completely wrong but to scared to face us over here. perhaps we have migrate to other thread, but thought this was the working one

[madgooner] 21/9/2005 10:51

Some friends around I see ;-)

I'm lurking for the short side. £200M Net Tanglible Assets,Debt £120M, dividend to be 'supported' by balance sheet for 3 years, I don't think so. Pressure will arise from Lenders (presumably they have some covenant support for their position) and probably some institutions. Whilst European performance is ok, at least goodwill impairment should not be necessary, but logic suggests a further 'review' of dividend policy.

[tokyogirl] 21/9/2005 10:47

Aoo you are very wise on this one. Unfortunately I wasn't.
I'm disappointed but not in despair. Will reduce my holding accordingly.

[b0tman] 21/9/2005 09:53

bots, very good. and nice to see stock creeping up again, despite the falling market. those weak holders seem to have expended themselves yesterday. regards

[bot_man] 21/9/2005 09:00

BOTMAN2, i agree.

i think mroalan and Collection Agency have this completely wrong.

CSFB forecasts FCF will cover dividend by March 2008 meaning net debt will rise only for next two years on their forecasts. net debt at 31/3/05 was a modest £55.4m. annual dividends cost around £80m so even if FCF was zero in next 2 years, debt would only rise to around £220m, even that doesnt seem excessive when compared with market cap of about £1080m

[botman2] 20/9/2005 22:35

Collection Agency, i dont agree with you on the divi. if the management is really confident, as they say they are, about the business outlook and the business is conservatively financed then it is logical to maintain the divi. cutting it might suggest to investors they have no confidence in the outlook, when they say they do. they have to put their money where the mouth is.

interims november 8

[collection agency] 20/9/2005 21:51

Botman (I believe there is only one, poor ramp)

Mr O is right, this one was always looking to get a kicking. Forget the div, you have already had a capital loss that exceeds that.

I have followed and traded ecm for 4 years, when botman started the ramp on this I almost shorted it then and there. As it happens, this time around, I was waiting for a date announcement for the update. They decided to forego that and just release the non-update. Shame cos I was almost short y'day (I have an independent witness) but talked myself out of it cos it wasn't on anyones calender. ho hum.

Holding for a divi is never a good idea with a company thats struggling, Insts do it beause it looks clever for their punters and it gives them a lame justification.

I will be looking to actively trade ecm (probably to the short side but if some idiot Inst comes in and buys it up, I won't fight the trend eh?)

UK/US and Eurp look poorly in the medium/long term. I don't see ecm doing well over the next few years.

If you time this share right you could end up with a yield of 15%! Till they change their minds.......

I notice that they cannot cover the divi either.

well done Mr O, a cracker.

[botman2] 20/9/2005 21:34

mroalan, not just the peasants getting IN either. presumably will be RNS/s shortly that will give some ideas. will be interesting to see if Franklin Templeton have done anything after recently taking their stake over 5%.

good luck to you if you go short stocks on 7.5% yields.

[botman2] 20/9/2005 14:00

interesting this rebound, how far can it go?

[bot_man] 20/9/2005 13:41

UK economy looks grim. but interesting to watch the strong growth in North America, Asia and the smaller European markets plus recovery in France, Germany and Italy.

[gulliverr] 20/9/2005 13:28

Not a happy report. I had hoped for signs of recovery in the UK but not visible yet. Looking on the bright side there is every chance that conditions will improve and the dividend pays a good return on capital in the meantime. If I had waited until today I would still have bought in and at a better price!

[bot_man] 20/9/2005 13:26

if "Board's view of the medium term prospects for the Group has not changed" perhaps that means if UK outlook is deteriorating, the slack will be picked up elsewhere, particularly Asia and the smaller European markets

[a0002577] 20/9/2005 13:02

I too was tempted to buy in. However, I think I will wait because the price may drift yet lower. Agreed that the market is a bit high - waiting is probably the best policy

[botman2] 20/9/2005 12:31

obviously not. and they should warn us, not surprise us out of the blue like this. but its an intriguing statement

what do they mean by "Board's view of the medium term prospects for the Group has not changed" ? are profits and margins going to bounce back then?

there are the positive bits...

"There has been continued strong growth in North America, Asia and the smaller European markets. Sales in France, Germany and Italy continue to show some recovery."

and also

"In the UK, one-off costs of around #1.5m have been incurred in this half-year,
which will have an annualised benefit of around #2m."

after three years the group could be quite different, with UK perhaps only 30% of group and Asia and smaller European markets having much bigger % of sales.

[gulliverr] 20/9/2005 11:01

So we hold for the dividend and better times! I was tempted to top up today but have so far resisted. I too think the general market is a bit high and there isn't much value around.

[a0002577] 20/9/2005 09:56

Whoops - profit warning today. Quite a funny AFX announcement really see below

It added though: "The board's view of the medium term prospects for the
group has not changed which supports the maintained level of dividend for the
next three years."
bam


Not sure what the "bam" means!

Premier Farnell also take a hit.

Glad I am out of both at the moment.

[a0002577] 19/9/2005 17:43

Hi TokyoGirl : no didn't put anything into BAA and am bereft of nice shares at the moment. Market may be too toppy. One to watch though is AL. But it is not as good as the ones I have looked at before.

For October the one to buy is probably DXNS. But will update you closer to the time.