Electrocomponents Share Discussion Threads

[b0tman] 02/10/2006 16:57

yes, and nice at the close with the stock finishing higher

[bot_man] 02/10/2006 16:08

4.5m traded today, thats heavy by recent standards

[b0tman] 02/10/2006 15:59

latest IC p54 has FTSE 250 yield at 2.34%

18.4p/0.0234 = 786p

[b0tman] 02/10/2006 15:48

What would the ECM share price need to be for the stock to yield the same as the FTSE 250?

[botwoman] 02/10/2006 15:10

If the dividend is unchanged but the yield on Electrocomponents shares moves from 7.3 per cent to Premier's 5 per cent, Electrocomponents' share price will rise from 263½p yesterday to 380p. That is a jump of 44 per cent.

[botwoman] 02/10/2006 15:09

for those who missed last Thursday's Times...



Electrocomponents could distribute handsome rewards

SHARES in Electrocomponents, the distributor, have performed in abysmal fashion over the past five years, yet a trading update yesterday suggests that the fortunes of the company are changing for the better. If prospects continue to improve, shareholders could be handsomely rewarded.
The shares enjoyed a decidedly buoyant day yesterday. The price jumped 5.7 per cent, outdoing every other FTSE 350 company. As with most companies, shares can be expected to move up in response to improved profitability. Shares in Electrocomponents could progress at an exaggerated pace, however, because of the dividend position.



At current levels, the shares yield of 7.3 per cent, more than twice the average for the market. Admittedly, the yield is high because the market fears that Electrocomponents may be forced to cut its dividend. That threat has not disappeared and if Electrocomponents does reduce the income it pays to shareholders plenty more value will leach away.

However, if Electrocomponents proves itself capable of maintaining or even raising its dividend, the share price could double. It will if the market regains complete faith in the company's ability to pursue a dividend policy that is as progressive as the market average. For if the share price doubles, the yield will halve, and fall in line with the market average. Even if Electrocomponents succeeds only in winning itself a reputation equivalent to that of Premier Farnell, its London-quoted rival, shareholders will be decent winners. If the dividend is unchanged but the yield on Electrocomponents shares moves from 7.3 per cent to Premier's 5 per cent, Electrocomponents' share price will rise from 263½p yesterday to 380p. That is a jump of 44 per cent.

But will Electrocomponents manage to hold the dividend? The fact that the payment is uncovered by earnings suggests that it will struggle. The company has pledged to hold it at current levels this year and next. Meanwhile, Electrocomponents has no borrowing and reckons that it has only modest capital investment requirements. It needs a new warehouse in the United States, but elsewhere it has infrastructure that can accommodate extra volumes. Economies of scale will widen profit margins if volumes continue to grow at current rates and a new IT system is helping the company to operate more efficiently. Buy.

[b0tman] 02/10/2006 11:19

Well if revenues are growing at 9%, surely the current year numbers should be pushing £900m, tempered slightly by a strong pound. In the following year if revenues continue to grow at 9% that implies around £980m, but consensus numbers only seem to be around 920-930. And what if the UK business does start picking up from current 1%? Considerable scope for upgrades?

[botman begins] 02/10/2006 11:00

You think UK revenue growth will start accelerating then?

[b0tman] 02/10/2006 10:39

from AFX report on UK market...

Sentiment was boosted midmorning by reports that the UK's manufacturing
sector expanded by more than anticipated in September, sources said of a key
survey.
They said the monthly purchasing managers' index for the manufacturing
sector from the Chartered Institute of Purchasing and Supply rose to 54.4 in
September from a revised 53.0 in August (it was previously estimated at 53.1).
Analysts polled by AFX News had been anticipating a modest decline to 52.8.

[b0tman] 02/10/2006 10:35

UK manufacturing PMI much stronger than expected. EMU PMI surveys also stronger than expected

[botman begins] 02/10/2006 10:31

these guys are close to getting their money out, i wonder if they could spend it over here? from efinancialnews...

Rexel owners plan record bond

Harry Wilson and Duncan Kerr

02 Oct 2006
e1bn payment-in-kind note would be double the size of anything previously issued in Europe

The private equity owners of French electrical equipment distributor Rexel plan to raise €1bn ($1.26bn) using a controversial financing tool, according to a source close to the deal.

The payment-in-kind note would be issued ahead of what could be the world's largest sponsor-backed flotation next year, which could value the company at €8bn.

The PIK note planned by Rexel's backers, France's Eurazeo and the US's Clayton Dubilier & Rice, would be twice the size of the largest deal of its kind in Europe. These notes are a risky form of high-yield debt, mainly bought by hedge funds, which can offer a return of more than 20%, compared with a high-yield average of between 7% and 9%.

They are expensive for a company to issue and controversial because they offer no interest payments during the note's life, instead rolling over the payments until maturity. This means investors may take years to realise a return. Much of the money is likely to be used to pay a dividend to the backers before the company floats.

[b0tman] 02/10/2006 09:58

ECM lagging PFL this morning

[b0tman] 29/9/2006 11:59

up again nicely today. L2 still showing good demand

[paul w] 29/9/2006 10:34

Thanks, interesting article.

[botwoman] 29/9/2006 09:43

If the dividend is unchanged but the yield on Electrocomponents shares moves from 7.3 per cent to Premier's 5 per cent, Electrocomponents' share price will rise from 263½p yesterday to 380p. That is a jump of 44 per cent.

[botwoman] 29/9/2006 09:41

for those who missed yesterday's Times...



Electrocomponents could distribute handsome rewards

SHARES in Electrocomponents, the distributor, have performed in abysmal fashion over the past five years, yet a trading update yesterday suggests that the fortunes of the company are changing for the better. If prospects continue to improve, shareholders could be handsomely rewarded.
The shares enjoyed a decidedly buoyant day yesterday. The price jumped 5.7 per cent, outdoing every other FTSE 350 company. As with most companies, shares can be expected to move up in response to improved profitability. Shares in Electrocomponents could progress at an exaggerated pace, however, because of the dividend position.



At current levels, the shares yield of 7.3 per cent, more than twice the average for the market. Admittedly, the yield is high because the market fears that Electrocomponents may be forced to cut its dividend. That threat has not disappeared and if Electrocomponents does reduce the income it pays to shareholders plenty more value will leach away.

However, if Electrocomponents proves itself capable of maintaining or even raising its dividend, the share price could double. It will if the market regains complete faith in the company's ability to pursue a dividend policy that is as progressive as the market average. For if the share price doubles, the yield will halve, and fall in line with the market average. Even if Electrocomponents succeeds only in winning itself a reputation equivalent to that of Premier Farnell, its London-quoted rival, shareholders will be decent winners. If the dividend is unchanged but the yield on Electrocomponents shares moves from 7.3 per cent to Premier's 5 per cent, Electrocomponents' share price will rise from 263½p yesterday to 380p. That is a jump of 44 per cent.

But will Electrocomponents manage to hold the dividend? The fact that the payment is uncovered by earnings suggests that it will struggle. The company has pledged to hold it at current levels this year and next. Meanwhile, Electrocomponents has no borrowing and reckons that it has only modest capital investment requirements. It needs a new warehouse in the United States, but elsewhere it has infrastructure that can accommodate extra volumes. Economies of scale will widen profit margins if volumes continue to grow at current rates and a new IT system is helping the company to operate more efficiently. Buy.

[b0tman] 28/9/2006 15:53

Now that would be nice

[jimmy_h] 28/9/2006 12:25

Is this going to top 300 in a matter of days

[b0tman] 28/9/2006 11:12

Funny thing is ECM does not have much debt (£121m net at Mar 31) while PFL has quite a lot of the stuff, £317m net at the interims. ECM about 10% of market cap (1164); PFL about 48% (664)

[jimmy_h] 28/9/2006 10:58

OK. But no need to shout

[botwoman] 28/9/2006 10:50

If the dividend is unchanged but the yield on Electrocomponents shares moves from 7.3 per cent to Premier's 5 per cent, Electrocomponents' share price will rise from 263½p yesterday to 380p. That is a jump of 44 per cent.

[botwoman] 28/9/2006 10:49

from todays Times...



Electrocomponents could distribute handsome rewards

SHARES in Electrocomponents, the distributor, have performed in abysmal fashion over the past five years, yet a trading update yesterday suggests that the fortunes of the company are changing for the better. If prospects continue to improve, shareholders could be handsomely rewarded.
The shares enjoyed a decidedly buoyant day yesterday. The price jumped 5.7 per cent, outdoing every other FTSE 350 company. As with most companies, shares can be expected to move up in response to improved profitability. Shares in Electrocomponents could progress at an exaggerated pace, however, because of the dividend position.



At current levels, the shares yield of 7.3 per cent, more than twice the average for the market. Admittedly, the yield is high because the market fears that Electrocomponents may be forced to cut its dividend. That threat has not disappeared and if Electrocomponents does reduce the income it pays to shareholders plenty more value will leach away.

However, if Electrocomponents proves itself capable of maintaining or even raising its dividend, the share price could double. It will if the market regains complete faith in the company's ability to pursue a dividend policy that is as progressive as the market average. For if the share price doubles, the yield will halve, and fall in line with the market average. Even if Electrocomponents succeeds only in winning itself a reputation equivalent to that of Premier Farnell, its London-quoted rival, shareholders will be decent winners. If the dividend is unchanged but the yield on Electrocomponents shares moves from 7.3 per cent to Premier's 5 per cent, Electrocomponents' share price will rise from 263½p yesterday to 380p. That is a jump of 44 per cent.

But will Electrocomponents manage to hold the dividend? The fact that the payment is uncovered by earnings suggests that it will struggle. The company has pledged to hold it at current levels this year and next. Meanwhile, Electrocomponents has no borrowing and reckons that it has only modest capital investment requirements. It needs a new warehouse in the United States, but elsewhere it has infrastructure that can accommodate extra volumes. Economies of scale will widen profit margins if volumes continue to grow at current rates and a new IT system is helping the company to operate more efficiently. Buy.

[b0tman] 28/9/2006 08:22

at what level though. good momentum now, surely no turning back

[artful dodger] 27/9/2006 19:52

enjoying holding this one for a few months now

gotta be a top-up in there somewhere...