Fiberweb Share Discussion Threads

[insipiens] 31/10/2012 12:02

lionel, is 4.5% that good when you can get that in a blue chip?

Did I miss an RNS about a special dividend?

I would think the share price needs a growth story (economic growth) to sustain an upward trajectory from here.

[boonboon] 31/10/2012 10:19

lots of houses/roofs will need rebuilding in the Eastern US. Fiberweb could profit from that.

[lionelw] 31/10/2012 10:12

... just noticed the market cap is below 120m; not bad for a profitable, steadily improving business well placed to benefit from any upturn in the construction industry (and other many other areas), with 30m cash in the bank, some 170m of state-of-the-art, mostly shiny new plant and equipment, original and best-of-breed products, highly regarded researchers and top quality new research facilities, award winning factories/property in many strategically important locations globally, with 320m/year sales, improving margins (promised!), 4.5% yield (or 30% of EBITDA) and increasingly canny, competent, dedicated/proud and experienced management and workforce.
And guess what, some reckon the charts predict it could be getting even cheaper and still some are selling quite heavily :-)
Must be worth a punt around here or better still, on even further weakness up to the results and announcements in the next ~3 months re the much anticipated (see FT and Investor's Chronicle at the time of the interims) possible special dividend that "loyal" (yeah right!) shareholders that even supported Abrams' risky rights issue that knocked almost 50% off the shareprice when it was back up over 100p and held on through thick and thin probably expect now, and would possibly even say they are owed!
The usual unusual moves seem to be returning, with 2-3% moves in a day becoming commonplace again.
Could be interesting again for the careful and agile day-trade shorter, buyer or, almost certainly (DYOR!!) investor that can afford to hold for 12-18 months.

[lionelw] 25/10/2012 13:59

nice drop from 71p a couple of weeks ago to 65.75p to sell just now - hopefully it will stay low in case people want to put their divis (to be paid with a bang on Monday, Guy Fawke's day no less!) back into FWEB shares.
It's hilarious that for the months the FTSE went up from 5000-6000 FWEB hardly moved but as soon as FTSE wobbles a little, FWEB sinks, and people here say, well of course, the rest of the market is down so naturally FWEB is too, LOL!

[lionelw] 23/10/2012 22:11

nice move insipiens. Let us know when the market is due to go back up.

[insipiens] 23/10/2012 17:52

Lionel. Did you not sell a few weeks back? I did....the general market correction was well due. No reason to assume fweb would not be affected by it.

[lionelw] 23/10/2012 16:33

Breakout!
Finally out of the 68p-72p range FWEB has wallowed in, uncharacteristically, for the last few months.
If she closes under 68p (currently 67.25p) today and can stay below that for a couple of days, this could quickly lead to another decent buying opportunity at a good price if it sinks back below 60p.

[lionelw] 12/10/2012 17:24

nice article, thanks!
I would be amazed if 2013 earnings is as low as your 6.5p quote, but if they are, then your logic is sound.
Their mid-term margin target is 8% if I remember correctly, and if sales stay even static, then the eps would be twice that, and so may the share price be ;-)
The key thing is the margin - everything else is looking better than it has ever been, even when the shares were 225p and definitely when they were 106p!

[lionelw] 12/10/2012 11:43

If you're an optimist, you can say that there was no IMS yet after Q3 with clues on performance so far this half because they want a big bang to push the price up in time for the special divi announcement (a 30p dividend looks much more reasonable if your sharepice is 90p and profits moving sharply higher (as should be the case) than it would with a 60p shareprice with performance as expected by the brokers or worse because you already let the fireworks and announced the good progress a few months ago).

If you're a pessimist, you might think that if there is no news, it probably means things haven't been as good as expected so far in H2.

[lionelw] 12/10/2012 10:56

in my opinion for FWEB to breakout in the short term, from this 68p-72p range, back down to the mid 50s or up to the early 90s depends most on the market perception/reception and success, or otherwise, of 2 things:

1) margins - ie does this management know how to make money on 320m sales (even 8-10% would give 25m-30m EBITDA and, considering there is already 26m cash in the bank (plus profits from from H2, say 8m-13m, and the benefits of millions of pounds of "cost-cutting", "extraordinary", "non-recurring" costs they have told you about and that are now supposed to be finished) justifying even conservatively at least a 130p share price

2) the much anticipated 30p/share (according to the Fiberweb corporate brokers', Peel Hunt's, estimates) dividend - see sharw's excellent explanation above of one way this could potentially be play out in the coming 3-6 months (the CEO had said 12-18 months from the announcement last November of a large part of the Hygiene business disposal, and they reiterated the same timing at the interims in August).

Sterling Strategic, as one of the biggest shareholders, were buying again according to the latest RNS this week, and, again just in my opinion, that is a positive sign if you are a holder or net buyer. Obviously, since the price stayed in this same range, there must be sellers too, so they see things differently or are just banking some profits (eg currently 15% profit over the recent right's issue price of 60p).

[saripoos] 12/10/2012 09:48

UP A 1/4 DOWN A 1/4 UP A HALF DOWN A HALF...SEVERAL MONTHS BETWEEN 68 AND 70 WHEN WILL WE SEE MOVE TO MID 70 OR MID 60

[lionelw] 08/10/2012 14:09

page 28-29 (thanks sharw) from


Additional Rate Taxpayers
To the extent that the gross dividend falls above the threshold for the additional rate of income tax, the
Ordinary Shareholder will be subject to tax on the gross dividend at the rate of 42.5 per cent. This means
that the tax credit will satisfy only part of the Ordinary Shareholder's liability to income tax on the gross
dividend, so that to that extent the Ordinary Shareholder will have to account for income tax equal to 32.5 per
cent. of the gross dividend (which equates to approximately 36.1 per cent. of the dividend received). For
example, assuming the entire gross dividend falls above the additional rate threshold, a dividend of £90 from
the Company would represent a gross dividend of £100 (after the addition of the tax credit of £10) and the
28
Ordinary Shareholder would be required to account for income tax of £32.50 on the dividend, being £42.50
(i.e. 42.5 per cent. of £100) less £10 (the amount of the tax credit).

[lionelw] 08/10/2012 14:00

Thank you sharw! I almost feel bad to get this guidance for free!
It's not quite that simple then but that doc seems to address all my questions, thanks.
It seems that if you have a capital gain in some other stock, XYZ, the effective capital loss (due to the 2 for 3 replacement) on your FWEB holdings (were you to sell them) would mean a reduced tax bill.
... but you will pay extra tax on the divi (minus a 10% tax credit).
But you better check for yourself.

[sharw] 08/10/2012 13:52

The best answer is to look at an actual example.

A year ago Aegis(AGS) made a major disposal and proposed to return some of the cash received to shareholders by way of "a special dividend and, if approved by the Ordinary Shareholders, an associated sub-division and consolidation of Ordinary Shares on the basis of 10 New Ordinary Shares for every 11 Ordinary Shares. The Share Consolidation is intended, so far as possible, to maintain comparability of the Company's share price before and after the Return of Capital".

You will find this all set out in a boringly lengthy document here:



The interesting bit for you is Part VIII on pages 28 and 29 which sets out the tax implications of such a scheme.

[lionelw] 08/10/2012 12:55

So, to try to keep it as simple and elegant as sharw's example, let's say you bought 9000 shares at 90p/share 2 weeks before the announcement of the special divi.
After the process you have 6000 shares and GBP2700 cash received as a dividend.
Now... if you sell your 6000 shares, say still at 90p, will the taxman consider this to be a capital loss on the shares (of GBP2700) and a totally unrelated dividend receipt of GBP2700?

[lionelw] 08/10/2012 12:20

thanks sharw - beautifully explained.

[lionelw] 08/10/2012 12:19

THIS IS WRONG - DO NOT PAY ANY ATTENTION
sharw gives the perfect description in the previous message (1919)

aha sharw - I think you meant:
every share you currently hold gets 30p divi and then each 3 held shares are replaced with 2 new shares

So, if you started with
9000 shares (worth GBP8100 @90p/share)
you would end up with
6000 shares + GBP2700 (worth GBP8100 @90p/share)

[sharw] 08/10/2012 12:18

To put it more simply, before the event you have three shares which trade on the market at 90p - value 270p. After you have two shares which trade on the market at 90p plus 90p cash in hand - total 270p.

Your 3 old shares of 10p will be two new shares of 15p so your proportion of the total capital of the company will remain the same.

[lionelw] 08/10/2012 11:48

so they dilute existing shareholdings by effectively 60p (two thirds) and then pay 90p divi, right?

[sharw] 08/10/2012 11:35

lionel- it is normal practice when there is a special dividend which is large in relation to the share price to have a share consolidation at the same time so that comparability is maintained.

Suppose the share price is 90p and the special dividend 30p then the scheme would be that for every three old shares you receive two new shares plus the dividend of 90p. All other things being equal the new shares would trade at 90p.

Whitbread have been doing this for years so that the par value of their shares, once a simple figure, is now 76 122/153p!

[lionelw] 08/10/2012 11:09

I know this is the sort of question that usually gets short-shrift on this sort of public forum, but I'll give it a try - there are a several very knowledgeable and helpful people who occasionally make posts of great value that can help people like me understand what underlies some of the seemingly incomprehensible stuff that goes down especially with FWEB!
What are the various tax implications, for private and commercial shareholders, of the predicted ~30p special dividend in Q1 or Q2 next year?
If they don't announce it until February, at the annual results presentation, then it will probably be paid out in the next personal-tax year (ie after April 5 2013). Is there a way to take advantage of this 30p dividend and show a capital loss on the shares which should, all things being equal, probably drop by a similar amount?
My guess is that they will wait until the the shareprice is over 90p and that the special dividend will be just big enough to knock the shareprice back down to 60p again (the rights issue price). Any thoughts? It sounds like there should be a smart way to get some benefit from the drop in SP/substantial capital loss?

[pillion] 04/10/2012 14:49

Looking good chart-wise, almost a Gold Cross

[pillion] 03/10/2012 15:15

I've done well out of Mr Wong's free web-site
As a general rule I like shares that pay a divi; but not always


FWEB ex divi today