Essentra Share Discussion Threads

[essentialinvestor] 06/9/2018 11:15

Thanks for the view. In terms of investment in packaging, that's happening already.

The last two conference calls (available on the Investor relations site)
deal with this in detail.

[uselogic] 06/9/2018 10:27

I think its over valued currently. Packaging will continue to be a drag on the share price. They should look at selling off the Specialty businesses. Stabilise Packaging. Then sell Filters. Use that to drive down debt and then make a call to either invest in Packaging or sell that off.Net debt is rising sharply, they just can't fund all business units. The only good business is the Components, so personally I would like them to sell off the other divisions and use proceeds on an acquisition strategy.

[essentialinvestor] 06/9/2018 09:02

Uselogic, any view on the current valuation?,
I make it around 18x forward earnings.

[essentialinvestor] 05/9/2018 23:03

Thanks for the above, I see Paul has bought another 20,000.

[uselogic] 05/9/2018 20:49

Went through the old annual reports. with the "4" new divisions to look at historical trends, which is below as best as I can figure out.
2014 2015 2016 2017 2018 H1
Components margin 27.07% 24.21% 24.01% 22.17% 22.64%
Packaging Margin 18.19% 13.24% 6.92% -0.51% 0.94%
Filters Margin 15.06% 18.31% 13.93% 12.54% 12.16%
Specialty Margin 16.06% 15.21% 12.95% 8.62% 6.81%
Group 18.48% 17.02% 13.36% 8.23% 8.52%

Components trend is down from 2014. Slight improvement in H1.
Packaging is not going to get its margins back, without significant investment.
Filters in decline.
Specialty in decline.
Doesn't look great. Question is, how long will the turnaround take.

[essentialinvestor] 27/8/2018 16:05

The first point is don't look at the 5 yr average.
That was heavily skewed by the hype around Colin's tenure,
the rash of acquisitions and investors assuming very high future growth rates.
From memory, the PE was somewhere around 15-16x before then, would have to
double check.

Components looks a great business, at least atm, helped by supportive macro
in fairness. Filters looks stable(ISH). Specialist components a mish mash.
Packaging, a huge amount still to do and current rating already assumes recovery in packaging, at least to some extent.

There is also a fairly hefty chunk of debt and the dividend looks uncovered,
if earnings recover sharply that's not an issue.

The current CEO looks capable, and he keeps buying shares, another 20,000 recently.

I think it's worth watching.

[unnavailable] 26/8/2018 10:36

Historically speaking, 19x is not expensive. The 5yr average is 27. You have to go back to 2011 to find a yearly PE under 19.But yeah, there are no guarantees. Are there any at all in this game?.Do you like the business but just find it too expensive?. Under what price would tempt you?.

[essentialinvestor] 25/8/2018 16:07

Thanks for the view.
I make the consensus around 19x this year's earnings,
that's not cheap in my book for an early stage recovery,
with no guarantee packaging will return to significant profitability.
ESNT looks more than fairly priced, maybe I'm being too cautious,
good fortune with your holding.

[unnavailable] 25/8/2018 10:01

I'm in. Recovery definitely under way and the plan seems to be going well. Back to profit and margin expansion.Huge improvement with customers willing to work with Essentra. H2 results crucial. I'll be looking to add around these levels.

[essentialinvestor] 24/8/2018 15:10

Anyone interested here?.

Watched the recent webcast and do not see a compelling buy case atm.

A lot of the valuation appears to be predicated on a turnaround in packaging,
which is still at a very early stage. Components firing on all cylinders.
On about 19x forward, does this look value?. Might be worth a look lower down.

[essentialinvestor] 25/4/2018 11:40

Heading back to recent lows?.

[essentialinvestor] 19/4/2018 09:47

I'm going to keep this on a watchlist, so if anyone has any views in the future,
please post.

[essentialinvestor] 19/4/2018 08:12

Out for me on that bounce, luck to anyone holding.

[essentialinvestor] 18/4/2018 10:46

Update tomorrow.

[essentialinvestor] 16/4/2018 11:18

Would be careful drawing any conclusions based on a couple of days,
ESNT can move around sharply intra-day. It dipped sub £4 back in November 2016,
would not surprise me if it happens again, however that would represent a very
attractive longer term buying area, just IMV. Depends what they say Thursday, perhaps.

[rubberbullets] 16/4/2018 09:52

chart is bowling up

[essentialinvestor] 16/4/2018 09:38

Q1 Trading update this Thursday.

[essentialinvestor] 13/4/2018 09:20

Added quite a few this AM.

[essentialinvestor] 10/4/2018 17:21

Bart, very much a case of DYOR!.

I think at very least it's worth watching, and can understand the caution as
we are yet to see will the new management team's ability (or otherwise)
to push forward profitability.

[bartolozzif] 10/4/2018 16:20

Good point!


Have added a baby unit so i can watch this and decide what to do

[essentialinvestor] 10/4/2018 14:53

Paul appears to have bought circa 135,000 shares over the last 10 months,
so that's the best part of 700K ?.

From memory he has 6 years from commencement of employment to
reach 2x base salary in share holding. He's been CEO for under 14 months.

[essentialinvestor] 10/4/2018 14:48

One of the non execs purchased 38,700 shares on 21/03, unless I misread this.

[uselogic] 10/4/2018 14:26

The Packaging business needs significant outlay on capital equipment, so is it worth it.
Filters - Not sure what the plan is. They talk about China expansion, but what does that mean JV, Sale.
The central costs seem to be ballooning and the Management team is twice the size it was now. Interesting to see that none of them with the exception of the CEO who is required to, are actually putting their hands in their own pockets and buying stock, when it’s dropped 15% in value in the last couple of months.

[essentialinvestor] 10/4/2018 10:28

It's a longer term Buy for me. However, prefer to read different views.

The packaging business needs significant investment and margins are currently
negible. Filters should be relatively stable(ish) medium term, however agree it's components which represent the longer term opportunity. There are risks, and
it's fair to highlight these.

[bartolozzif] 10/4/2018 10:13

Well said. Think its going to tank