Hamworthy Share Discussion Threads

[slapdash] 22/6/2009 17:20

SO IS THE FINANCE CHARGE RECURRING OR NOT???

Someone did have a good point before that essentially this is a stock driven by sales and the shipping industry isn't in a good way...

Any thoughts on that anyone???

Slap

[momentos] 22/6/2009 17:09

See Note 12 on page 58 of Anual report

Interest payable on bank loans and overdrafts 407k (2008:660k)
Amortisation of loan issue costs 162k (2008:120k)
Net return on pension scheme assets and liabilities 22k (2008:80k)
Loss on cash flow hedges 2,193k (2008:Nil)

"...the loss in the current year relates to a specific option derivative whose structure does not qualify for hedge accounting but does nonetheless represent a commercially effective hedging instrument."

A hedge on forex or interest rates which went against them.

The restatement relates essentially to work-in-progress inventory which should have been booked as income.

[slapdash] 22/6/2009 16:50

thepsychic - true.... but value will out etc in the end..

one thing I don't get is if borrowings were lower in 2009 - borrowings fell from £1.7m to £0.9m why was finance expense up for 2009 at £2.7m???? (from 0.86m)

Doesn't appear to make sense... this is finance expense on what if not on borrowings???

Hard to know if this finance expense of £2.7m in 2009 is recurring or not??? And what causes it in the first place??? Not an insignificant charge at all...

ALSO not sure I understand the restatement of earnings for 2008... in note 2 to the accounts. Appears to increase the earnings per share marginally... not a huge issue then I suppose but no one likes to see the words "restated"....

I notice that in the holdings in company post results it appears at least one institution increased their stake..

Slapmeister

[thepsychic] 22/6/2009 16:44

Their cash position tells one part of the story. But i am not sure what will lift the share price whilst revenues are decreasing, in other words, due to our current climate there has been a drastic reduction of orders. The shipping industry as a whole is not a hot sector to be in.

[momentos] 22/6/2009 14:29

Inventories on the balance sheet are BTW:

Raw materials 8,695
Work in progress 53,192
Finished goods 5,587

..so the vast majority (work in progress) is effectively trade debtors but the income is not yet recognised. Which neatly balances the creditors, in fact. So it's not an inventory line sat there with huge write-down potential.

[stegrego] 22/6/2009 14:00

Slap,

I agree about people saying co's have 10 mill in bank (and they have 11 mill debt), but im not one of those people!

Glad to see you come around to my way of thinking anyway...

Sometimes i despair too..... ;)

[slapdash] 22/6/2009 13:42

Stegrego -

HAMWORTHY BALANCE SHEET -

Current Assets £190m which includes cash of £57m
Current Liabilities £133m
So I do agree this is a very strong current ratio of about 1.42

Or we could say that if we assumed a current ratio of about 1 which is something that wouldn't be unconservative to have there would be an excess cash of £57m...

So perhaps I stand corrected!!!!!

However, they do have non-current liabilities of £34m although that doesn't look too bad set against non-current assets of £39m...

So Stegrego perhaps I was mistaken... does appear to be a lot of leeway on the balance sheet and so perhaps a lot of cash is excess. This is all assuming that the firm is in an industry where it can happily have a current ratio of 1X as opposed to the 1.42X it currently has. Doubt they would reduce it though as they appear to be a conservative company so this discussion is probably purely academic.

Equity £62m a share which isn't a bad book value relative to the market cap.

Just was trying to make the point that lots of people jump up and down about excess cash but that really isn't excess but is needed to cover current liabilities and secure strong financial position.

Slapmeister

[stegrego] 22/6/2009 13:40

OK, so im out a bit, but still huge pile of cash.

[momentos] 22/6/2009 13:38

If you strip it down to Money owed to them + inventory + Cash (c.180m) versus Money to be paid by them (c.115M) this is hugely on the positive. NAV is about 144p a share.

Evo stated 2 June:

"Cash balances have been maintained, indeed "own cash", ex-advances, has
increased to over £36m and, with modest capex spend, we expect the balance
sheet strength to be maintained through the trough."

[stegrego] 22/6/2009 13:33

Slap,

Work out the net cash then...

And as has been stated, better than having bank loans.

[peter27] 22/6/2009 12:55

slap

I agree but you must admit that having cash is better than saying 'we are confident our facilities will be renewed'!

[slapdash] 22/6/2009 12:07

Stegrego - doh... cash is to cover current liabilities.... it isn't excess cash....

if people don't even know that why invest??????? If a company has current liabilities of say £50m... then it will need cash on hand to cover these... doesn't mean this cash is excess to the business and so can be counted against enterprise value....

I despair...

Slap

[honiton] 20/6/2009 07:38

above 200ma buy

[stegrego] 17/6/2009 21:24

Half market cap in cash - business valued at around 60 million = p/e of 4.

[thepsychic] 17/6/2009 21:20

why 'should' this head higher on decreasing revenues?

[thepsychic] 17/6/2009 20:56

I found it. It's 240p, just about where we are now. I think this is a fair valuation considering they have plenty of spare cash, excellent products but at the same time a big reduction in orders and a fairly bleak near term but strong long term outlook. If this dips to 200p i'll look to purchase some.

[thepsychic] 17/6/2009 14:21

Does anyone know what the brokers price target is on this?

[zipless] 16/6/2009 12:12

Interestingly there are now more buy orders on teh order book on Level 2. Just a bit quiet over lunch. I expect a lift this afternoon.

[zipless] 16/6/2009 09:42

Next target 280p.

[zipless] 15/6/2009 11:52

Almost at a breakout price, then watch it fly!

[momentos] 12/6/2009 15:48

"Smallest volume of the rise = small fall"

Yes - quite rightly the market is trying to share out weak bulls. Doesn't seem to be having much luck though.

[alanrex] 12/6/2009 13:09

i was considering selling a couple of days ago when it reached its most recent peak. however, i still thinks it cheap when you take into account its debt position, likely recovery position etc. a traceback is not surprising, and i do think that this can continue rising. nice to see the shareholdings IMS, hopefully other institutions will/are following suit.

all imo dyor