Ensor Share Discussion Threads

[jbarcroftr] 10/12/2015 19:53

He reckons 33 m or 110'p a share is the realistic value of the remaining subsidiaries bearing in mind they will be free of pension fund liabilities

[shanklin] 10/12/2015 18:37

jbarcroftr

Please could you advise how ST got to £1.15 please?

Thank you, Martin

[eezymunny] 10/12/2015 16:26

Why ROFL.

If they sell remaining biz at a 7 x multiple of an annualised £2.8 op profit taxed at 20% that's £15.7m or c. 52p/share. Add a bit for balance sheet goodies, say £6m, and you get £21.7m or c. 72p/share.

Clearly they may do better than that. Time will tell.... Can't get at all excited at current market cap!

[eezymunny] 10/12/2015 16:08

The only thing disposed of since the interims to 30 Sep is Ensor Building Products Limited at a premium to book of c. £400k, and at a valuation of c. 4 x year to 31 Mar op profits.

Remaining biz's perhaps did £1.3-£1.4m op profit in H1? Not spelled out in the interims!

We shall see but I'd be surprised if the final outcome is as high as the current market cap. Beauty is in the eye of the beholder and all that. Most of ESR stuff is pretty cyclical judging by dips in revenue and profits in 2001/2002 and 2008-20011. Great ramp up in profits last 3 or 4 years but is this a cyclical high hence good time to be selling?

I'll stick with my 65p target for now ;)

[jbarcroftr] 10/12/2015 15:23

ST estimates 115 p
I have bought a few today
2016 looks pretty uncertain and with ESR I see little downside( famous last words) and hopefully 20% upside.

[tiswas] 09/12/2015 14:50

David

Would you care to share your guesstimate as to the sum of the parts?

Any idea as to how they will distribute the cash, ie as received or on completion (thinking of any delays with planning consent), return of capital or special dividend?

[davidosh] 09/12/2015 13:58

I think you are also forgeting that assets are being sold off, some property assets were sold off after the year end and some still to be sold but costs have already been incurred.

The business recently sold and announced in October after the half year end will have had a freehold for Ensor to sell to the best bidder and does not seem to have been part of the business sale process.

With Ensor you need to accept there are good performing businesses to be sold and many property assets that add value too. There is the old timber yard in Brackley for housing development still to come for example.

The annual costs of the board and centralised & listing costs not required by third parties buying the businesses will be close to £800k IMO

[eezymunny] 09/12/2015 10:19

Err yes Shanklin, some costs can be stripped I guess but not much. How much are you suggesting? You still need to pay someone to run the businesses even if lower salaries than current directors...

Maybe £0.5m-£0.75m in total?

[shanklin] 09/12/2015 10:15

EM

You are ignoring "Administrative expenses" much of which will disappear when the company is sold. Over the last year these are circa £5.8m and include:
- directors' remuneration of 533k (in 2014)
- other central costs, no idea on the size of these
- listing costs
- presumably, a lot of exceptional expense around disposal processes.

So, your £3m is rather understated.

[eezymunny] 09/12/2015 09:51

H1 trading profit £1.5m. Annualise that to £3m. Tax at 20% gives pat £2.4m. Market cap £26m, so P/E c.11 here.

I'm not convinced the various biz's will sell for that much. Only have to look at ETQ and ESS which sold at very modest multiples this year.

My guess for final proceeds 65p.

Hope you do better!

[shanklin] 09/12/2015 09:49

FWIW, after a bit more digging, I understand the £5.5m - £6m is an allowable expense, so I presume ESR will not be paying income tax for a little while... ...at least not on this year's earnings.

All IMHO.

[manrobert] 09/12/2015 09:36

several people are asking s.t.if he will be updating ensor after yesterdays fall.

[shanklin] 09/12/2015 07:47

Having looked at last year's AR to try and address the pension point about, I am quite certain the accounts will be a lot easier to understand once ESR have bought the annuity!!!!!

[shanklin] 09/12/2015 07:03

Thank you for the feedback.

N.B. Stockopedia has added the ESR results, something it would normally take about a week to do. It is showing 12 month trailing normalised EPS as 9.81p. Based on ESR's numbers I think it would be 9.4p.

[rp19] 08/12/2015 22:24

I don't profess to understand but, some comments/debate on the pension issue in the comments at the foot of this article:

[wilmdav] 08/12/2015 21:15

gdjs100 - I am not an accountant either but that is my understanding also (re pension contributions).

[gdjs100] 08/12/2015 17:17

Shanklin, I am not an accountant but my understanding is that pension contributions come out of the cashflow but not the P&L, so stripping out these contributions won't affect EPS at all.Moreover, the 9.2p achieved last year was with a 1.0p contribution from the division now sold. I think somewhere around the 8.5p mark is a realistic forecast.

[tiswas] 08/12/2015 16:00

Assuming all the subs are eventually sold Ensor will end up as a shell company with a stack of cash and presumably some remaining land that they will want to maximise the opportunities for?

Looks like this might drag on a bit. I wonder if there are any tax advantages to the family doing it this way?

[tiswas] 08/12/2015 15:53

Nice work Shanklin and I agree with you. Just cannot understand why it has taken them 6 months to get, well, nowhere.

Dented my faith in management a bit, unless there is a pile of paperwork just waiting to be signed!

Let us hope that they are right and the 5(?) remaining subs are worth more than the whole!

[shanklin] 08/12/2015 15:30

So, worst case, 12.5p/share off the NAV for the annuity.

Then, no more pensions payments, so PBT enhanced by not having to pay the following...

2015 Annual Report, part of Note 16 (Pensions)...

"The defined benefit scheme operated by the group was last valued by the actuary at 31 March 2014 using the attained age method and the assumptions described below. As a result of that valuation the Scheme Actuary recommended contributions to the scheme from April 2014 to March 2021 starting at £300,000 per annum and rising to £348,000 per annum in the year ended 31 March 2020, reducing to £299,000 in the final year of the projection."

So this will increase EPS by about 1p/share.

Stockopedia show 2015 EPS as 8.6p. Add in the 0.4p increase in H1 over last year and the trailing 12M EPS is 9p. Add the above 1p gives 10p.

On that basis, the current share price seems rather light which is why, earlier this afternoon, I bought back a few of the shares I had sold.

[shanklin] 08/12/2015 12:29

Sold just over 20% of my holding over the two weeks prior to the results as:
- ESR has been fairly liquid on the sell side helped no doubt by Simon Thompson's coverage;
- in the run-up to taking 25% of my SIPP tax-free, I needed to free up some cash
- I was not sure what the results statement would bring especially with the sales process proving far more protracted than I had anticipated.

The big surprise for me, other than the lengthy sales process, was the cost of the annuity to cover the pension liability. One point which may be relevant to the cost of the annuity is that, as per the 2015 AR, at y/e the defined benefits scheme had total assets of £3.733m and total obligations of £5.872m. So, if the £5.872m is directly comparable to the £5.5m to £6m annuity mentioned in today's RNS, then not much has changed. However, if its additional cost on top of the scheme assets of £3.733m, then its a significant new cost of circa £3.5m to £4m (£5.5m to £6m less the pre-existing £2m deficit).

Thoughts welcome.

[blueliner] 08/12/2015 09:59

Taking reduced profits this morning I sold 60% of what I have left. Previous higher profiting sales my thanks to Simon Thompson.

With the piecemeal trade sales the Director's hoped for quick retirement is further away it seems and more complicated. Can't understand why they didn't see it operating in that sector for years.
Also disappointed and just as well the interims had no major hiccups.

[tiswas] 08/12/2015 09:21

I don't know about anyone else but this has been a pretty grotty 6 months so far as my portfolio is concerned, and I am holding very high levels of cash!