Goodwin Share Discussion Threads

[cambium] 10/3/2013 17:32

Arbuthnot are staying hush

[stevenlondon3] 10/3/2013 12:17

"This will by definition result in an increased need for capital." With stock markets and their own share price buoyant why risk delaying the capital raising. If the company was going to use debt I think the above statement would have been worded differently.

[gengulphus] 10/3/2013 11:06

As the £18.33m is required over the next three years rather than immediately, some extra debt can be taken on without increasing the debt-to-equity ratio. How much depends a great deal on the timetable on which the extra capital is required and how good the company is at increasing its equity via retained earnings, but a finger-in-the-air guess would extrapolate the £7m increase in equity in the 2012 final results to about £21m over three years, which would allow about £11m extra debt to be taken on at the current debt-to-equity ratio of just over 50%. That would substantially reduce the extra capital that would need to be raised from the £18.33m figure in the recent IMS, to around £7-8m.

And the company has definitely been thinking in terms of increasing its equity by retaining earnings - the 2012 final results said "The decision to only increase the dividend by 10% to £2.31 million will assist the Company in being able to finance three significant projects that will be started subject to approval of the grant applications that we have submitted." Now that the approval is definite, I'd expect them to take further steps along those lines, maybe limiting dividend increases to 5% for a few years. And if I were them, I'd take a look at the possibility of a scrip dividend option - a decent method of raising fairly modest amounts of extra capital over an extended period. It wouldn't bring in all the extra capital required, as total dividends for three years at the current rate are only about £7m and clearly not every shareholder would take up the scrip, but it could make a significant dent in it - maybe enough to make the required debt-to-equity ratio increase to finish the job acceptable.

The net result is that I agree with you that a placing (or other fundraising such as a rights issue) is likely at some point, though quite likely one that is considerably smaller than the £18.33m capital requirement. But there do seem to me to be possibilities of funding it [without an equity issue and]* with at most quite a modest rise in the debt-to-equity ratio.

* edited in for clarity

Gengulphus

[stevenlondon3] 09/3/2013 17:54

I think they have to provide finance to match the govt. grants. At the end of october overdrafts were £14.5m and other loans £13.7m compared to equity of £54.0m. I would have thought they would be reluctant to increase the debt to equity ratio. I think a placing looks likely (excluding preference shares). Who is their broker ie no point in letting the "city fat cats" hoover up cheap stock?

[cambium] 09/3/2013 15:39

Didn't they get some govt funding recently aswell

[britishb] 09/3/2013 10:11

Err equity isn't the only form of capital! You may be right. Or you may be wrong. Idle speculation!

[stevenlondon3] 09/3/2013 09:35

Certainly capital raising looks on the cards - £20m would be less than 15% of market cap.

[craffert] 09/3/2013 00:05

"necessitate capital" sounds to me like a placing is coming here to raise £20mn....priced at £20?

[jimmy tarbuck] 08/3/2013 18:49

Bloomin' marvellous !

[cambium] 08/3/2013 14:51

Wow wasn't expecting that today. Nice

[britishb] 08/3/2013 14:36

Yes 200p+. Tx.

[wjccghcc] 08/3/2013 11:04

britishb, I think you mean 200p. Superb in any case and with order input up 20%, more to come.

[britishb] 08/3/2013 09:22

Decent update. Looks like 20p+ full year eps for a P/E of 10 or 11 on the back of another year of storming growth. Super balance sheet, helped by weak £ etc. Been a gem over the years, non?

[cambium] 08/2/2013 11:34

Awesome performance. Love it

[madmix] 25/1/2013 10:44

Cheers britishb.

I suspect the absence of broker coverage explains the lack of interest on this board.

This does look a good company to tuck away as a long term hold though, so it's definitely on my watch list now.

[britishb] 25/1/2013 10:33

Haven't seen any forecasts, no. Can only guesstimate from interims. Tone very much suggests H2 at least as good, abd probably better than, H1, so maybe eps of 220p for the year. That's going to be quite a set of finals. 60% eps growth, fab balance sheet etc. Price/sales not much above 1 here most likely. All very nice.

Not sure who best to compare them to. WEIR perhaps, P/E 14 and a good bit of debt. Struggle to believe this won't go higher unless we get a warning (with record order books unlikely but who knows?!) or a market meltdown.

[madmix] 25/1/2013 10:15

britishb,

This looks interesting, but I'm struggling to find any forecasts for this company. I notice that Westhouse are their broker.

Are you aware of any published research or forecasts?

[chrismcglone] 24/1/2013 20:46

britishb? Just wish I had put more of my cash in here and over at SUS.

I wasn't having a dig. Just commenting on the (welcome) lack of mudslinging by posters and perhaps the reason why. I agree my post was a tad confusing - now that I read it back. Didn't quite say what I was thinking.

Anyway, outstanding performance relative to my 'more exciting' gold stocks. Which have been dreadful this past year.

[britishb] 24/1/2013 12:26

Keeps nudging up.

Suspect P/E for this year around 10 on the back of monster growth.

I don't find that boring at all chris mc.

Results 8th March. Will be interesting to see if keeps pushing higher in the run up.

[britishb] 22/1/2013 22:44

I think you've lost the plot Chris.

[chrismcglone] 22/1/2013 20:23

Not exciting enough britishb.

You think this is boring? Try my favourite stock SUS. Bought at around 3 quid when it was yielding 12%. No cut in divie and it's only risen since.

Boring is best. If you want to make steady money that is.

Great buy kneecaps2.

[kneecaps2] 13/1/2013 05:38

yes i first bought these at 21p a nice little earner he he

[britishb] 11/1/2013 14:49

Yes, the most hilarious thing is the complete absence of the masses of complete morons who inhabit these boards. They'll never learn how easy it is to make money in stocks....

[kneecaps2] 11/1/2013 12:31

New high today don't be short of this super company