Ensor Share Discussion Threads

[shanklin] 19/8/2016 12:21

At the current bid price of 60p and with 29,895,976 shares in issue, the Mkt Cap is currently £17.94m.

I would like to think that with:...
...the two remaining businesses detailed as having a combined operating profit in the year to Mar-16 of over £1.5m
...land being marketed at £750k
... plus the sales that have been achieved to date

...that the overall outcome will be better than £17.94m.

However with no up-to-date B/S or idea of the ongoing P/L of ESR as a whole, it is difficult to be definitive about this.

All IMHO. Cheers, Martin

[meijiman] 19/8/2016 12:07

Shambolic process really. As the market hates uncertainty and the outcome here is uncertain the share price is going nowhere. It may well go up as and when there is good news but the longer this drags on the less optimistic I am as well...

[jaf111] 19/8/2016 11:56

You are not alone tiswas.....and as we can see from the trend in share price, the longer it drags the worse it gets....

[tiswas] 19/8/2016 11:47

I must admit to feeling pretty stupid here.

I thought I was being clever buying in at just over 70p following the pullback from 120p.

In a good market I thought 100p+ was achievable based on the optimism and growth shown in the 2015 results.

I think the whole process has been a disaster from start to finish and they could well end up holding on to two businesses if they do not get the right offers. What will they do to central overheads and ageing directors then? Why did they not bring in a younger team from the start to manage the business, why were they so desperate to sell?

I accept that those who got in a few years back have made a nice turn and good luck to them. For others, especially the directors who were not able to sell at 120p and now see the share price barely half of that, I feel very sorry.

Holding on for 80p but not holding my breath.

[pavey ark] 19/8/2016 11:16

dangersimpson2: I take it that the £5m figure is in for fun (mischief ?)as these businesses made over £1.5m operating profit last year.

Gengulphus: you are obviously more involved here and my excuse for not being more up to speed is that I bought a few at 70p and I'm simply awaiting further developments.

Do you have a net value based on say £10m / £13m value on remaining units ?

Like you I also like nice surprises so do you have a minimum value based on say £10m for the remaining units.

[dangersimpson2] 18/8/2016 10:01

Thanks Gengulphus,

I make this:

-0.819 Net debt at Y/E after buying annuity and receiving Ensor Building Prod cash
+2.5 OSA Door Parts
+10 Technocover
+1.1+0.52 retained cash from above
+0.75 freehold

= 14.051m

If they get £10m combined for Ellard and Wood's Packaging then that would be

24.051m = 79p/share

If they only get £5m combined for Ellard and Wood's Packaging then that would be

19.051m = 63p/share

[gengulphus] 18/8/2016 09:40

The fairly recently published annual report at may help about the properties. In particular, looking at the balance sheet assets and their corresponding notes shows that as of March 31st this year:

* No properties were included in "Property, plant and equipment" non-current assets (note 11), the remaining properties having been transferred to current assets because they are held for sale.

* Note 11 also indicates that the property at Brackley, Northamptonshire was transferred from "Other freehold land and buildings" non-current assets to "Assets held for sale" current assets (note 13) at £530k book value, net of depreciation. Its status is given in note 11 as "being actively marketed and residential planning permission is being sought" and in note 13 as "Residential planning permission in respect of the property has now been obtained and the property is being marketed", a slight discrepancy - I would guess that the explanation is that planning permission came through while the report was being prepared. I'm fairly certain that it is the property being marketed at a guide price of £750k in - that brochure mentions that it was formerly "Hawkins Salmon Woodyard", and Hawkins-Salmon Limited of Brackley is a former subsidiary of Ensor's (discovered by a web search for "hawkins salmon ensor" and confirmed by looking at the company's 2009 annual report ).

* Note 11 also indicates that the property at Welshpool which was in "Freehold land and buildings used in operations" non-current assets has been transferred to "Assets of disposal group held for sale" current assets at £1,424k book value, net of depreciation, and note 14 indicates that it is therefore an asset of Technocover. I would assume that it was included in the recently-reported disposal of Technocover. That's not an assumption I'm certain about, but I think its retention by Ensor would have been a significant enough aspect of the disposal to have needed to be reported in the RNS had it happened, and it's also the conservative assumption to make - if I'm going to be surprised, I prefer it to be a nice surprise, not a nasty one!

* All the other properties mentioned in note 11 are specifically described as having been "sold" or "disposed of" during the year, and the zero valuation of property non-current assets makes it fairly clear there are no further property assets.

I haven't yet worked out the implications of the above for the valuation of the company or on anything people have said here over the last few weeks.

Gengulphus

[shanklin] 17/8/2016 14:44

carcosa

Well you can now buy ESR shares at a price less than where you sold

Cheers, Martin

[dangersimpson2] 27/7/2016 17:23

David,

Given your holding size surely they would answer you on what freeholds are remaining and what have been sold with the operating businesses. I know you were saying you think that the freeholds have all been retained. Did you get that steer from the management?

We can all play guess the multiple and come up with scenarios but not being clear exactly what the assets of the remaining businesses actually are isn't on IMO. They really should have at least said this is what we have sold - this is what we have left to sell. It's no wonder the share price is volatile.

[eezymunny] 27/7/2016 17:15

I assume the 993 is after group charges, but the difference is a huge number, no???

There seem to be weird discrepancies all over the place (to me!)

[davidosh] 27/7/2016 17:11

Hill and Smith said...

In the year to 31 March 2016, Technocover recorded turnover of £14.7m, operating profit of £1.5m (before Ensor Holdings PLC group charges)

Why does note 4 to the accounts give a different figure or is that £993k figure after group charges ?

[shanklin] 27/7/2016 16:45

EM, fair point. My apologies.

[eezymunny] 27/7/2016 15:39

Hmmm...."In the year to 31 March 2016, Technocover, a manufacturer and installer of steel security access products for the utilities markets, recorded turnover of £14.7 million and an operating profit of £1.53 million before group charges. "



Every time you look at the numbers they contradict each other...AFAICS!!!!!!

[shanklin] 27/7/2016 15:00

EM,

Technocover sold for £10m. As per note 4 of the FY results, operating profit for y/e Mar-16 was 993k.


Cheers, Martin

[eezymunny] 27/7/2016 14:48

Only time will tell what the remaining subs will sell for but he (ST) has been much too optimistic up to now.

Technocover sold for 6.5x op profit b4 group charges
OSA sold for 5.2x

...if my sums are right.

Maybe Woods/Ellard will sell on better multiples. Maybe not!

[pavey ark] 27/7/2016 14:09

Yes Dd I think it would be a good idea to now sit back and wait for the final units to be sold.

I and others have come up with figures close to ST's estimate and it must be pointed out that any sensible investor should screen tips by the likes of ST very carefully and if they decide to buy they should take the responsibility for their actions.

I bought at 71p as I thought his initial valuation was a bit rich but after much number crunching I am more than happy to be in at this level.
I expect a final payout of 85p/95p and with two profitable and expanding units still to sell together with a large cash pile and freehold land there is very little downside with 20-30% upside.

I don't intend to post again until there is some hard news on the disposals but I hope that people putting forward negative views back these up with figure that can then be examined and discussed.

[davidosh] 27/7/2016 12:15

That article was yesterday when Simon Thompson stated that he still expected at least 90p and stated BUY.

For the avoidance of any doubt as I do not think it is good to guess these things and one paragraph is not a good way to understand his rationale I am copying it all purely because ST appears to be the reason many joined us longer term holders...


When I initiated coverage at 97p ('Building up for a takeover', 22 Jun 2015), Ensor's days as a listed entity looked numbered after the board put the company up for sale. I subsequently reiterated that advice at 90p ('M&A updates', 9 Dec 2015). Admittedly, shareholders have had to be patient as the divestment process has taken far longer than I had envisaged. That's mainly because the board decided a series of trade sales would maximise shareholder returns rather than seeking one buyer. But that's not to say they haven't been successful. Two disposals announced a fortnight ago generated a total cash consideration of £12.5m on completion and Ensor also retained £1.62m of cash held by those businesses. The proceeds represent a hefty premium to the £4.6m-worth of net operating assets sold. Moreover, Ensor now has net funds of £13.3m, or 44.5p a share, before payment of a final dividend of 1.55p a share in late September at a cost of £463,000 (ex-dividend: 11 August).

There are decent prospects of Ensor's two remaining businesses being sold at a premium to the book value of their assets, too: Ellard, a supplier of electric motors and controls for the automation of doors and gates; and Wood Packaging, a specialist supplier of protective covers for furniture transportation, servicing major retail groups as well as the SME markets. Both are being actively marketed and Ensor's board is in discussions with interested potential buyers, but it's not going to be a fire sale as shareholder value will not be sacrificed for the sake of an early disposal. That's worth bearing in mind because I feel there is a pricing anomaly worth exploiting here. In fact, once you adjust for the latest disposals, I reckon Ensor has a pro-forma net asset value of £19m, including net funds of £13.3m. The company has a market value of £21.8m, so in effect investors are attributing a value of £8.5m to Ellard and Wood Packaging even though both are profitable and have been growing strongly.

Indeed, Ellard has increased sales at a compound annual growth rate (CAGR) of 14 per cent in the past three years and lifted operating profit by 10 per cent to £890,000 on revenues up 15 per cent to £8.5m in the 12 months to end March 2016. Wood Packaging has been growing even faster, increasing sales at a CAGR of 17 per cent in the past three years and yielding an operating profit of £628,000 on sales of £3.6m in the last financial year. So, in effect, these businesses are being valued at the equivalent of 5.5 times operating profit based on Ensor's current market capitalisation. True, US dollar exchange rates are a challenge due to the increasing levels of goods sourced and purchased in the Far East, but even so they look undervalued. A more realistic valuation of between 9 and 10 times historic operating profit values the two businesses in a range of £13.6m-£15.1m on a debt and cash-free basis, and gives Ensor a break-up value of 90p-95p a share. Admittedly, that's not what I had envisaged when I initiated coverage, but I still feel you should be able to recover your investment and I would await news on the outcome of the remaining disposals. Buy.

[carcosa] 27/7/2016 12:02

"It's fair to say that we have reaped hefty gains from takeover situations in the past 18 months ('On the acquisition trail', 4 Jul 2016). Indeed, no fewer than 12 of the companies on my watchlist have exited the stock market since the start of last year and at a 50 per cent-plus average premium to my advised buy-in prices. However, it's not a one-way bet as the case of Ensor (ESR:73p), a Manchester-based company focused on the manufacturing and supply of physical security products and packaging, highlights."



Am not a subscriber but from the gist of the initial paragraph and todays share price action I assume he has changed his mind regarding the valuation?

[cockerhoop] 26/7/2016 17:08

Shanklin

I probably failed the explain it fully.

ST was equating his estimated net funds of £13.3m to the MCap of £21.8m to suggest the market was attributing £8.5m to Ellards and Woods whilst he argued that they'd make £13.5m-£15m to get to his 90-95p outcome.

[zimbtrader] 26/7/2016 16:09

Quite so, Shanklin!This will likely be a long haul to the finishing line. Just hope the board is considering returning some of the cash from the pot whilst they focus on completing the final 3 sales (Inc the Brackley land).Next news on the day of the AGM perhaps....

[cockerhoop] 26/7/2016 13:14

Pretty much as discussed here.

NAV £19m including net funds of £13.3m, current valuation attributes £8.5m to Ellard and Woods. He suggests £13.5m-£15m more realistic.

[shanklin] 26/7/2016 12:55

Well unless ST has information that we are not party to, I would not give more weight to his views than those of posters here.

[zimbtrader] 26/7/2016 12:24

ST suggests 90-95p in his article just out (seems to have prompted some buying).

Lop off 10% to allow for his occasionally optimistic view and we're looking at 80-85p?

That is, of course, if you accept his calculations!

Z