Another small uptick in short interest on 08 January. |
Flirting with its ATL back in 2008 ! |
Short interest increasing. |
Odysean - 28/11/24
Essentra
% NAV: 4.5%
Sector: Industrials
Leading manufacturer and distributor of essential industrial components.
After a solid H1 update, late in the period Essentra flagged that the outlook for end markets had softened, and resultantly downgraded its full year forecasts. Whilst this update was disappointing we view it as reflective of broad market conditions and not a company specific issue. We continue to believe that Essentra is a well-run leader in a large and fragmented market. Management have delivered well on managing the cost base through the current cyclical low and the group is well positioned to see a rapid rebound in profits when end markets recover. We see further upside from management continuing their track record of bolt-on M&A to expand the group's geographic and product range. |
Estimates have been progressively scaled back, forward multiple remains high as a consequence, even with the share price fall.
It may be worth more to a competitor. |
ESNT has halved in value over the past 30 months. I've never been a shareholder here. However, it looks as though it could be oversold and may now be potentially ready for a revival next year. Therefore I've added it to my watchlist. |
Good info Davius. I'm underwater on this & looking to leverage down my average. Just waiting for the right moment (I missed the profits warning crash day). The brokers' forecasts suggests that 190-220p region can be reached ... but not sure when? Another year of holding seems likely. Oh well, hope springs eternal - vp. |
Jefferies cuts Essentra price target to 215 (245) pence - 'buy' |
 Insider: director spends £100k on shares at 15-year low
These shares might have just dropped sharply, but the management team and City analysts believe better days lie ahead. Graeme Evans explains why.
by Graeme Evans from interactive investor
The cheapest Essentra shares in 15 years were bought by the FTSE 250 firm’s top team last week as they backed the components maker in the wake of a profit warning.
Chair designate Steve Good led the buying with a purchase of £100,000, while chief executive Scott Fawcett spent £15,000 and finance boss Jack Clarke £12,400.
Their investments took place on Wednesday, the day after Essentra said trading in August and September had not lived up to earlier hopes for a modest upturn in volumes.
It said conditions in Europe were softer and that the recovery in the Americas region has been slower than anticipated, meaning that annual operating profits will be £40-42 million rather than City forecasts nearer £49 million.
The company, which was known as Filtrona until 2013 and demerged from FTSE 100-listed Bunzl in 2005, is now a pure play components business after selling its filters division in 2022.
It employs 3,000 people at 14 manufacturing facilities, producing 60 million parts a week for customers in sectors including automotive, electronics and renewable energy. These are small but critical components that go into other items.
Last week’s trading setback sent shares down by as much as 19% towards 140p, which compared with 350p at the start of 2022 and 190p in May. They closed last week at 145.2p.
The sharp reverse came even though the company stressed that it stands to benefit from high levels of operational leverage when normalised growth returns.
The support of directors, who bought their shares at 142p, was echoed in the City after analysts at three firms downgraded their price targets but still forecast a decent recovery.
Peel Hunt lowered its estimate from 300p to 230p and said its focus remains on the potential for accelerated returns as volumes improve: It added: “Service levels are high. The challenges are market volume related rather than pricing.”
Deutsche Bank cut from 240p to 200p, while Panmure Liberum left its price target unchanged at 315p although it conceded that this will now take longer to achieve.
Panmure Liberum added: “Whilst it is disappointing to see lower than expected volumes, we see the situation as cyclical rather than structural in nature.”
It continues to believe the group is capable of delivering on its medium-term ambitions, which were disclosed in November 2022 when Essentra told investors that it intended to double its revenue and triple its operating profits.
The growth plan included the opening of a new site in Monterrey, Mexico, reflecting the significant contribution the Americas region will make to its long-term performance.
Efforts to deliver results throughout the cycle saw an improvement in last year’s operating margin to 13.7% from 7.4% the year before, while the balance sheet remains robust at a ratio of 1.1 times net debt to adjusted earnings.
It is due to pay an interim dividend of 1.25p a share on 25 October, with the full year award three times covered by earnings. In 2023, Essentra shareholders received a special dividend of 29.8p a share following the disposal of its filters and packaging businesses.
The group has been led by Fawcett since January 2023, having joined Essentra in 2010. Chair Paul Lester is due to step down later this year after a handover period to Good, who is the former chief executive of Low & Bonar and joined the Essentra board in July. |
ooh nasty surprise there this morning |
Essential, I think ESNT have enough manufacturing to be of interest to Rosebank. Reading Melrose's history they purchased two components businesses Dynacast and McKechnie. I knew McKechnie quite well. There was a fair bit of plastic injection moulding like ESNT. I'm struggling to think of many other companies who could be potential prey for Rosebank. Potentially CARR's engineering division which is being readied for sale is another potential transaction for Rosebank but it's a lot smaller than ESNT. One thing I find interesting about ESNT is how much trading is done in the closing auction. It looks as if someone is accumulating them. Anyway I think it's good value at this level. |
Kin, this is primarily a distribution model.
Melrose specialise in manufacturing. |
I'm surprised there is no interest in this share. It's in my top 10 most likely bid candidates. It's exactly the sort of bid target that the new 'Melrose', Rosebank Industries will be interested in acquiring. |
Promising looking chart here? |
Bid rumours on Betaville apparently. |
Big sudden intraday swing - has it been tipped somewhere? |
The rules of engagement on buybacks typically means that the broker is not allowed to buy more than an agreed proportion of the day's traded volume - so that they don't deal against themselves or squeeze out third party interest; if no one is prepared to trade then the broker can't buy, it's as simple as that. This was quite well hyped as "undiscovered quality growth" at the time of the demerger and I suspect there are a lot of stale bulls in there who probably don't want to crystallise their loss but don't have the cashflow to buy more. I'm not totally familiar with the cost structure but I think the largest single item is going to be polymer and the cost of that could be ready to weaken given oil price declines. That said, the poor lfl's on the last statement are a cause for concern. |
NO NEWS??
Why aren’t ESNT board of Directors and CEO, Management team pulling their finger out and selling the business globally , increasing sales and putting Peel Hunt on the naughty chair for being inept? Why no news and so going up? |
Saw the RNS today. Disappointed still in the share buyback, Peel Hunt should have completed there contracted work in 10 months, failed and should not be paid! This buyback should have seen share price now at £2. Given everything and recession, plus the acquisitions,which to be brutally honest was Essentra, not Peel Hunt, they should have done their job and bought 150,000 every trading day!! |
Any news from GM?? Did both proposals go through with a 90% majority yes votes?
Any other news? |
Wow, some entity has bought 2 x 1 million shares buy after hours yesterday!! Is this someone buying in for a M&A or buyout? Or is it Peel Hunt doing their job and spending the millions in the buyback?
Or is it an investment company in the know?
Good to see, should start to see share price ruse next week ahead of the EGM and allowing BOD to CEO to use monies set aside for something?? |
I hope Perl Hint get on with and finish buying ESNT share buyback quicker and bigger numbers!! This should have been completed by now? They should be buying 100,000 shares per day now for 30 working days to get the job done and share price up to 180p??? Come on Peel Hunt, plus come on CEO and BoD start buying shares yourself and some confidence in the share on run up to Christmas!! |
Patience and await the outcome of the EGM and new bits in November then see what happens. The share buyback is too slow and inconsistent for me and should have been done and wrapped up,in 3 months!! Peel Hunt are useless!! |
We're back to the 14 year low (143.60) of 2 months ago (with a new intra-day low of 130.20). Maybe Peel Hunt went big today for once? "Softer trading" & the lower end of the profit forecast are hardly surprising given the national & international environment. I'm in for the long(er) haul & sitting on the dunes, ready to see Essentra wearing trunks when the tide goes out, playing #nodebttoptrumps. - vp |
SCSW used to find the odd howler but it now seems to be a full-time occupation. |
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