Fenner Share Discussion Threads

[alphahunter] 11/12/2015 09:49

Wait for the dividend to be cut, this will give you the signal to get in IMHO.
But I leave it to you two.

GLA

[bouleversee] 10/12/2015 22:27

OK. Let me know when the bottom is hit. I see they are up a bit today.

[jbarker5555] 10/12/2015 20:29

bouleversee - I remember buying in 2009 around 68p and even though the FTSE is much higher commodity prices aren't much better, but if I remember correctly they had turned by then (happy to be corrected if wrong!). Personally I'm waiting to see a bottom in commodities before thinking of seriously buying in here, I don't think you're going to get any confidence in the share until then. IMO :)

[alphahunter] 09/12/2015 19:55

"Would they have maintained the dividend if they couldn't see light at the end of the tunnel?"

I wonder how AngloAmerican's or ArcelorMittal's BoD would reflect on this question...

[hvs] 09/12/2015 16:33

lol !!!!

lol !!!!!

Look at the balance sheet.

Its a 5 bagger all right.

Now they charges u 5p for each bag.

[bouleversee] 09/12/2015 16:27

But their business doesn't depend entirely on commodities, does it? What about the growing medical and other aspects? And didn't they say they had made £38m cost savings? I'd like to think they would start going up again. Would they have maintained the dividend if they couldn't see light at the end of the tunnel? I know they haven't made any commitment re dividend for next year, however. I am debating whether to buy more but I already have a decent holding on which I am losing money. Would welcome some other views.

[pugugly] 09/12/2015 12:54

Cannot do more than repeat my 1002 above . This year has been an Annus horribilis for Fenner and if the commodites trend continues or even stabalises I cannot see much recovery next year and (imo) a high probability of a continued decline in the share price

(memo self revist December 2016) to see whether righ/wrong - ~ Excluding any takeover offers of course# )

[ayl30] 09/12/2015 09:58

World growth slump
Miners slump

[ali47fish] 09/12/2015 09:56

any idea anyone why fenner is down today?

[alphahunter] 09/12/2015 08:28

OK we had CSX a few days back again about US Coal etc,...
But AngloAmerican cuts IS a watershed moment that will be reminded in 10 years' time IMHO. Scandi stocks now look fairly expensive on EV/Sales >2, PE > 18, etc,....

[alphahunter] 02/12/2015 21:09

Double standard: China is doing it again.

China may impose higher quality standards for imported and locally traded coal to cut air pollution, two sources said, in a move that could slash imports while boosting the fortunes of a faltering domestic industry.

The National Energy Administration (NEA) held a meeting with major state-owned coal producers earlier this month to discuss the new standards, one of the sources said, adding top producer Shenhua Coal, China Coal, Datong Coal, Shanxi Coking Coal Group and Jizhong Energy Group were among firms that took part.

China's government, led by new leader Xi Jinping, has vowed to tackle the country's festering pollution crisis, which has become a flashpoint for growing protests in China.

The NEA now proposes to have for imported coal a minimum calorific value of 4,540 kcal/kg, a maximum sulfur content of 1 percent and 25 percent ash on a net-as-received basis, said a source at a major state-owned coal miner.

The proposed requirements for locally traded coal will be more lax, with a minimum heating value of at least 3,584 kcal/kg, a maximum ash and sulfur content of 40 percent and 3 percent, respectively.

"The main aim of the proposal is to reduce pollution. I think part of it is also to help support the local coal industry," said a source with a large state-owned coal miner, which attended the meeting.

NEA could not be immediately reached for comment. It was not immediately clear when a final decision on implementing the standards will be taken.

But if adopted, the proposals will hit the world's top thermal coal supplier Indonesia, from where exports of coal with low heating value to China have swelled since late last year. It could also affect sellers of U.S. steam coal with high sulfur content, a major cause of air pollution.

China imported about 54 million tons of lignite in 2012, a low-grade coal with calorific value lower than 4,500 kcal/kg, most of which were from Indonesia.

But domestic coal prices would get a boost as utilities would be forced to use more local supplies. Higher Chinese prices and requirements for better coal specifications could also prompt local utilities to buy more from Australia or South Africa.

"It could reduce imports by between 60-70 million tons of coal a year," said Luther Lu, an analyst at Fenwei Energy Consulting Corp.

Benchmark coal prices with energy value of 5,500 kcal/kg stood 611 yuan a ton as of May 22, down 0.2 percent from a week earlier, according to data from the China Coal Transport and Distribution Association.

LOBBYING BY COAL MINERS

Plans to raise the bar for overseas coal came after major miners lobbied with the government to curb imports earlier this year, sources said, after a near 30 percent spike in imports last year, combined with slower consumption growth, prompted a steady fall in domestic prices.

Many Chinese coal companies, already battling rising costs, climbing debt and a surge in overdue payments, have also begun to suffer financial losses.

"This is a clear move to protect the coal industry. If the authorities were genuinely concerned about pollution, they could force all coal-fired power stations to be fitted with or upgrade their desulfurization units," said a Beijing-based trader.

"Also, sulfur and ash are the main culprits for air pollution. It has nothing to do with calorific value."

Shenhua, China's top coal producer which invested millions to develop massive coal mines in Inner Mongolia, produces vast amounts of lower calorific value thermal coal which is between 4,500-5,500 kcal/kg.

"The utilities and local trading firms are going to get hurt since many of them have been blending low-grade Indonesian coal with high quality ones to lower their costs," said a Shenzhen-based trader.

[lauders] 01/12/2015 12:25

The rise continues off that bottom at around 128p. Whether it will continue is another matter but anyone who bought around 130p can't be complaining at the moment. Still think something is going on, but could well be my imagination!

[hvs] 24/11/2015 14:42

Which bottom ?

[hvs] 24/11/2015 14:42

Which bottom ?

[lauders] 19/11/2015 14:51

Is something going on here now I wonder? Yesterday's rise was a good one given the rest of the market and we have bounced quite well off the recent bottom!

[alphahunter] 16/11/2015 02:18

No short position to speak of. This is not a crowded trade, if this is what you have in mind, so no short squeeze to fear/hope for.
An activist fund has moved in recently, Standard Life has been selling.

[pugugly] 15/11/2015 15:46

Debt is looking heavy with gross borrowing at £231 million (per accounts), margins must be under very severe pressure and we know that major customers are reducing order rate for replacements PLUS a virtual freeze on new capital purchases. The dividend (imo) should have been cut possibly abandoned to pay down debt.

2015 2014
GBPm GBPm
------------------------------------------ -------- --------
Net (decrease)/increase in cash and cash
equivalents (7.7) 2.5
Net increase in borrowings resulting
from cash flows (8.9) (6.9)

Movement in net debt resulting from cash
flows (16.6) (4.4)
Finance leases (0.7) (1.0)
Exchange movements (3.4) 9.2

Movement in net debt in the year (20.7) 3.8
Net debt at start of year (117.3) (121.1)

Net debt at end of year (138.0) (117.3)


I would agree with those above who have accused management of being over optimistic in their hopes for a return to the old normal. (imo) The old normal (certainly for conveyer belting) and for parts of the APC division are probably going to be under forced buyer purchasing price reductions for the medium (18 month to 2 years) if not longer.

Broker views:- I suspect there is a good chance that even Investec may be too optimistic.




12 Nov Investec Sell 126.75 135.00 123.00 Reiterates
12 Nov Numis Hold 126.75 - 150.00 Reiterates
12 Nov Citigroup Buy 126.75 - 175.00 Reiterates
12 Nov finnCap Hold 126.75 168.00 130.00 Retains

[simon templar qc] 14/11/2015 20:36

Company was shorted about 5 years ago when the share price fell badly any idea of any short positions?

Have no position here but curious.

[meijiman] 13/11/2015 17:50

Yes the management here is not hopeless but they have been guilty of optimism when rather more pessimism would have served them better. In particular the degree to which ECS would be protected by replacement orders as opposed to new orders. The whole business has fallen off a cliff. Big new factory in Holland and new capacity in Aus all built at top of cycle. This time its going to be different -afraid not its going to be like the last mining downturn but worse -much worse.

[alphahunter] 13/11/2015 16:18

Their Oz and Norwegian acquisitions were ill-timed, you're right.
They also bought a lot of shares in the market for themselves 12m - 18m back.

So I grant it to you, they may have missed the big picture as many others in the industry. But they seem to be very heads down, operationally focused.

[meijiman] 13/11/2015 15:44

I'm sure it will end up exactly where it did at the bottom of the last cycle. Management here has learnt no lessons it seems. They seem like a rabbit caught in the headlights-carrying on regardless whilst everyone could see a huge impact from the mining slowdown. Did they believe it would pass them by?

[alphahunter] 13/11/2015 12:29

I think likewise - I'm keeping the short position open and lowering the GSL.

"Structural" means "don't adjust the reported numbers" when you value the company or as a minimum, don't take the restructuring cost out. Debatable about asset write-downs.
So the PE is not 11x - as the bulls have tried to get us to believe over the last 18 months. And the company is also expensive on a sum-of-the-parts magiggy.

The Management seem to be doing everything they can to mitigate the adverse conditions.

[owenski] 13/11/2015 11:47

FENR's come down a lot here, but suspect its got further to go.

[alphahunter] 11/11/2015 11:28

Acknowledging the structural decline in US Coal means two things IMO:

1. We will relentlessly take cost out, as yet to come in NA

2. We are sounding out the big boys in the mining capex sphere to take ECS off our plate if this business is of more value to them in a consolidation process than it is to us on a stand-alone basis.

[speedsgh] 11/11/2015 11:12

"Trading in the majority of the Group remains in line with management expectations. However, in the light of the recent further deterioration in the US coal industry, the Board envisages that the Group is likely to achieve an outcome for the current financial year which is moderately below its previous expectations."

"The Board recognises that the dividend paid to the Company's shareholders is an important component of shareholder value. Whilst the current level of dividend remains affordable, the Board will set future dividends after taking into account opportunities to invest in future growth."

Sounds like laying the ground for a 'rebasing' of the dividend which would probably be wise imo.