Ensor Share Discussion Threads

[dangersimpson2] 25/8/2016 12:39

Not a tax expert but usually when companies are selling subsidiaries with the intention of returning capital to shareholders no corporation tax is due and the tax is levied at the individual level. So if the return of capital to a shareholder gives them a taxable gain (i.e. not in an ISA/SIPP and greater than the CGT allowance) then it will be paid by the individual.

[gbill11] 25/8/2016 09:16

Not east working this one out. The other question mark is tax. If any of the subsidiaries are sold at a profit is ESR liable for capital gains tax?

[zimbtrader] 25/8/2016 09:06

Gen... Obviously, I should have said (and meant) "reduce" rather than dilute. Most seemed to get the point, though. Sorry to have caused you such consternation that you had to spend your valuable time posting to point out my error.

Thanks Dangersimpson2 and Nocton - good points, well made.

I will post back in the event of any reply to my response to the company.

[gengulphus] 24/8/2016 12:41

What I am most interested in is resolution 6 which, in essence, seeks authority to buy back up to 15% of the issued shares. I don't know what to make of that in terms of value to existing shareholders (I've no current intention to sell any). That's got to use up some of the cash pile but would dilute the number of issued shares. ...

Eh? Buying back shares reduces the number of shares in issue, which is the opposite of diluting them...

Not saying it's a good idea, but dilution is certainly not one of the problems with it!

Gengulphus

[nocton] 23/8/2016 10:44

I never support motions for companies to buy back their own shares. There is plenty of evidence to show that companies generally get poor value for shareholders, but it does wonders for earnings per share which may help bonuses! If the company has surplus cash that it can't profitably re-invest then it should be returned to shareholders in a clear way via a special dividend.

[dangersimpson2] 23/8/2016 09:15

It's a nice idea to buyback the shares less than a conservative assessment of NAV but in reality the shares are so illiquid I doubt they would get any meaningful amount in the market before the price goes up to NAV. If there was a large holder keen to get out then it could make sense for the company to negotiate a sale to them but seems unlikely given that there will be returns of cash relatively soon anyway.

[zimbtrader] 23/8/2016 08:35

Not me, sadly. Step-daughter gets married that weekend and I'm kind of required to be around in the run-up! ;-)

I am going to feedback my questions to Mr Harrison (he is already aware of my thoughts and concerns).

What I am most interested in is resolution 6 which, in essence, seeks authority to buy back up to 15% of the issued shares. I don't know what to make of that in terms of value to existing shareholders (I've no current intention to sell any). That's got to use up some of the cash pile but would dilute the number of issued shares. I guess longer term they are hoping this will result in a smaller number of issued shares to "share" what ever is left over once all sales are completed and a wind-up starts.

Anyone else got any thoughts about this resolution and what it might mean for us?

[davidosh] 22/8/2016 13:13

Are any of you able to attend the Agm ?

[3800] 21/8/2016 20:34

Annual report and accounts page 47, agm 15th september M23 9WB 10am

[zimbtrader] 21/8/2016 11:06

Does anyone know when the AGM is to be held? I can't seem to find a date anywhere and I am half expecting / half hoping that may shed some light on management plans to either start distributing some of the cash pile - which would be a positive in my view - and, perhaps, some update on progress (if, indeed, any).

I have contacted them (hxxp://www.ensor.co.uk/contact/) but have little expectation of any response.

I suspect many of you share my frustration that Ensor management seem to think they are running some kind of secret society and don't need to tell anyone anything. Great for them being insiders; less so for us...

[gengulphus] 20/8/2016 18:50

Pavey Ark,

Gengulphus: you are obviously more involved here ...

I'm not quite certain what you mean by "more involved" - but I'm probably not! I have a holding but it's a pretty small one relative to my overall portfolio, and the reason for my post about the properties is basically that I like to give myself an exercise in deciphering accounts from time to time on holdings that only matter a bit to me, to keep in practice for those that matter a lot!

Gengulphus

[dangersimpson2] 19/8/2016 20:41

If those were listed companies growing at those rates and those operating margins then they would be selling for relatively high multiples. The private market is usually less generous though and we've been underwhelmed by some of the prices they've got for the other businesses. That said 5x Operating Profit would see a return greater than the current price so there is some hope.

[eezymunny] 19/8/2016 13:54

Hmmm. Presumably those management charges weren't for doing nothing. We have no details but perhaps some accounting, HR functions for example. Some will be their share of central listing costs etc maybe. So I guess a buyer might be able to "save" some of those charges, but presumably not all of them... One can but guesstimate?

[shanklin] 19/8/2016 13:44

Because IMHO you should be adding back in "Other Operating Charges" which you will see in the Notes to the accounts is also described as a "Management Charge".

For Ellards in 2015 this is detailed in Note 3.

[shanklin] 19/8/2016 12:51

I think you are using the wrong numbers for 2014 and 2015.

[eezymunny] 19/8/2016 12:20

I still don't find myself wanting to buy any :(

Getting closer, mind :)

[eezymunny] 19/8/2016 12:13

Thanks Shanks. I have no idea why I couldn't find. Going mad I think.

Ellard (from Co House) Op profit y/e Mar 2014 £159k, 2015 £338k. And 2016 £890k.

Wood's (from Co House) Op profit 2014 £157k, 2015 £261k. And 2016 £628k.

2016 Combined t/o £12.1m op profit £1.52m.

My guess for combined sale value £8m. Will be fun watching.

[shanklin] 19/8/2016 12:06

The 2015 results show slightly lower operating profit for both Ellards and Woods but are for the prior year.

[shanklin] 19/8/2016 12:00

EM

From the FY results issued on 22-Jul-16:

"Ellard continued to increase market share, growing sales by 15% to £8.5million, representing a 3-year compound annual growth rate of 14%.

Although contribution levels were diluted by strategic product decisions and exchange rate movements towards the end of the previous year, they strengthened through the current year; the strong sales growth ensuring that gross margins were maintained.

Increased overheads reflect the investment made in people and premises, in particular, which underpins the established past, and expected future, growth in sales and profits.

Operating profit of £890,000 represented a 10% increase over the preceding year."

...and then, slightly further on...

"Our Packaging segment, represented by Wood’s, again reported healthy sales and achieved 3-year compound annual growth in excess of 17%.

Sales of £3.6million, coupled with maintained, robust margins and controlled overheads, yielded an operating profit of £628,000."

HTH. Cheers, Martin

[tiswas] 19/8/2016 11:57

You have to look at the 2015 accounts at companies house site.

[eezymunny] 19/8/2016 11:48

Where are you guys getting your £1.5m+ operating profit number for Ellard/Wood's? I don't see it clearly shown anywhere?

[shanklin] 19/8/2016 11:41

Certainly a shame I did not sell more when Simon Thompson got the share price above £1.10.