Essentra Share Discussion Threads

[loads2] 18/8/2022 19:47

I'm a buyer at 2 quid. Management ain't good. I'm only on here because I rate the filters part of essentra.

Filters is in my opinion the best part of essentra. It's being demerged by an aim float. They say its not very ESG because its sector isn't as politically correct as components. But filters makes more money as does tear tapes (part of the filters division).

I'm presuming existing shareholders would get discounted shares in a filters aim float. I'm following essentra for this reason and would buy essentra at 2 quid

Or I just wait for the aim float of filters

[essentialinvestor] 18/8/2022 18:07

So you would not consider ESNT a buy at any price ?.

We had a nice bounce from the recent 2.22/3 low,
although helped by wider MCX strength.

I thought low 2.30's represented interesting risk/reward,
however that was before seeing their latest net debt.

Something else that strikes me is their filters business looks
to be in a good place, why sell now unless the price is very attractive.

[loads2] 18/8/2022 17:57

On the analyst call yesterday they spoke about the results being complicated. I think they relish in the confusion their actions take. It's hardly something to boast about..they clearly have something to hide.

Dismissing part of the build up of debt - they said something about the dollar pound exchange rate causing debt to artificially build up but in the same breath admitted their currency hedge hadn't worked. The reality is they have lost money. No amount of excuses or deliberately created confusion gets away from that.

I appreciate the level of confusion and complexity in their numbers creates different interpretation. They are deliberately doing this

[essentialinvestor] 18/8/2022 15:35

loads, their net debt appears to have increased by just over £100 million
from the 2020 FY. That's ... not sure what's the word.

Debt on the 2020 FY had itself been reduced by the equity placing
and yet on yesterday's statement they talk about..returning some cash on
a filters exit. Dear me.

[philanderer] 17/8/2022 23:03

Loads, are you holding ?

ESNT now my smallest holding by value....no surprise really.😜

[loads2] 17/8/2022 23:00

Look at the track record of the board

1. Have they ever delivered a successful strategic review ?

2. Have they ever delivered a successful cost reduction plan ?

Answer to 1 and 2 is no they haven't

Ask yourself about the central cost reduction they are promising from 43m to 13m...but there is no cost reduction in board remuneration.

Jack is on record as expecting to make loads of money from essentra. He won't be doing that via the shares unless he's gifted them. Watch out for that in the detail they publish but no one reads

[philanderer] 17/8/2022 22:46

Investors Chronicle

Putting a value on the remaining business is tricky. Although it is currently carrying net debt of around £310mn, this will be paid off once the packaging sale completes in October and Forman expects to return some of the proceeds to shareholders once the fate of the filters business is announced. Until its value is determined, it would be prudent to ignore some of the more bullish analysts’ forecasts. Hold.

Last IC View: Hold, 284p, 30 Jul 2021

[philanderer] 17/8/2022 22:38

FWIW

Analysis by Numis suggests that a disposal of the filters business for £225 million would leave the core components business trading on nine times EV (enterprise value) to EBITDA, which is inexpensive for a firm with a 19% operating margin and over £500 million in cash.

At the same time, management is actively engaging in potential merger and acquisition activity to bolster the components business.

On an analyst conference call in June, management confirmed it was in active discussions with various parties and were ‘bound by three non-disclosure agreements at present’.

EXPERT VIEW

Commenting on today’s first half results, Numis analyst James Beard remarked: ‘Whilst the business is in a period of flux as it transitions from three divisions to one, we continue to like the long term potential of the components business’.

sharesmagazine.co.uk

[loads2] 17/8/2022 20:09

Essentra 8% down today.

But according to their drunken sailor ceo Paul Forman its all gonna right itself in H2. They are gonna cut Central costs from £43m to £13m. But no one on the board has any experience of successfully running cost reduction programmes.

Never heard a ceo start a result presentation with "let's rock n roll"

Indeed Paul Forman as you say "let's rock n roll"

Presentation dominated by Paul,

Jack (the cfo who is supposed to be a city charmer) did so well as a city charmer that the share price went down 8%. Good work Jack !!

[loads2] 17/8/2022 13:57

Part of the massive increase in debt is the horrendous amount of shareholders funds being spent on advisors/the strategic review.

The board are clueless, have never actually done a successful strategic review, so they've got advisors in by fhe bucket load.

The strategic review follows strategic failures by the same board who now see the strategic review to right the mistakes they have already made.

Strategic review is already taking longer and costing a lot more than planned. Filters will be spun out as an aim float which will incur a lot more expense. The packaging sale will fall through on the proposed terms and will either need to be renegotiated or a new buyer will need to be found.

Today's statements are full of spin about digital and sustainability ballony. The latest ned board member heads up innovative ideas at British Airways and is also on the world economic forum with klaus schwab and Gates. Its all about enrichment of the board and lies and spin they do

[essentialinvestor] 17/8/2022 12:52

Phil, having said this looked favourable risk/reward in the low 2.30's
a few weeks back (got to £2.55 on the bid yesterday) I can no longer make a buy
case looking at this update. How on earth have they managed to increase net debt
by £95 million, pretty shocking. May possibly be of interest to value investors on a filters exit, but looks too much like hard work atm.


Also only fair to say that price increase from the low 2.30's benefited from a corresponding equity market bounce.

[philanderer] 17/8/2022 09:27

Gone down like a bowl of sick.

[philanderer] 16/8/2022 09:55

Results tomorrow.

[philanderer] 02/8/2022 19:50

Just when you think you've turned the corner...

[philanderer] 25/7/2022 16:11

Essentra Components to supply recyclable parts to reduce landfill

[essentialinvestor] 21/7/2022 16:10

Sold a few, Up nicely since last Friday's post.

[essentialinvestor] 20/7/2022 15:57

Nice few days.

[essentialinvestor] 18/7/2022 14:34

Hi Phil, yes and you wonder if that might be a resistance level on the way up,
provided this is going back up!. Lets not get ahead of ourselves etc.

Wider markets enjoying a few stronger days.

[philanderer] 18/7/2022 14:13

Still 20p to go to hit the 260p placing price from september 2020 :-O

[essentialinvestor] 15/7/2022 18:14

Consensus has net debt following the packaging disposal and pension contribution
at very approx £40 million.

Packaging made a pretty minimal pre tax contribution re total group profitability

How much is the filters business worth, £150-£200 million plus?,
I'm allowing for a low multiple because of the tobacco sector.

If so, they are left with say £150 million cash, a current market cap under £700 mn
and a class leading components business, which has delivered the bulk of group
profitability for years,


I could only guess where a share price low point may be, £2.10 a share perhaps?, barring anything unforeseen !.
It looks reasonable risk/reward to me, but No guarantees as always.

[essentialinvestor] 14/7/2022 10:10

A woeful share price performance, added a small amount. That's not a recommendation!.

[loads2] 13/7/2022 19:25

Essentra board are rubbish. They are doing this strategic review, and all their publicity on sustainability and pride, because it seems the latest buzzword grand scheme for them. If they really were gonna look after shareholders they would cut down on their board excess in line with the business getting smaller

The Austrian deal looks good on paper but has too many issues. Money wil be banked from the sale which the clueless board will fritter away.

You have been warned