Haynes Publishing Investors - HYNS

Haynes Publishing Investors - HYNS

Stock Name Stock Symbol Market Stock Type
Haynes Publishing Group Plc HYNS London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 685.00 00:00:00
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Posted at 07/11/2019 18:33 by norbert colon
Whilst some form of Corporate Action is possible, I would say it's unlikely given the Haynes family controlling stake and no motivation for them to sell.With respect to newsflow - this rerating is actually not about newsflow, it's primarily about the last annual report breaking out for the first time the "professional" and "consumer" segments allowing investors to see how well the professional segment is doing. It's been there the whole time hence me investing when I did but now it's in full view.
Posted at 30/9/2019 13:09 by norbert colon

Yes valid point and my earlier articles on the Cube website touched on some of those points.

I am aware that AutoData (Haynes largest competitor in the professional segment) not only have a clear longstanding foothold in the UK but are very active in developing their own professional offering so investors need to inform themselves as to the competitive marketplace.

The E3 Technical acquisition has given Haynes a foot in the door with respect to the UK market so that is just one of many positives.

I don’t see any major changes to the 9m ‘A’ shares owned by the family. J Haynes (CEO) has a young family and I’m sure he intends for his holding to remain in the family. The family were also the benefactors of John Haynes stock when he sadly passed away recently. It's worth reviewing p.44 of the Annual Report which shows John Haynes (JH Haynes) share ownership is now under the jurisdiction of JHC Haynes (CEO) either by direct ownership or via him as trustee.

The large family ownership does of course preclude the likelihood of a takeover.

Posted at 25/9/2019 12:45 by norbert colon
If you look less than 2 yrs into the future, assume forecast numbers of 29.9p EPS for FY21 are met then apply a modest multiple of 15x for a growing automotive data business you get a share price of 450p.The turnaround since 2016/17 has been remarkable and despite sales of printed automotive manuals declining still, it's the professional business that investors need to take a close look at to understand the growth strong that still has a long way to run.
Posted at 04/12/2017 09:37 by norbert colon
Always good to hear investors bull and bear cases. I am long term positive on the stock but happy to post all opinions. Interesting Richard was selling as I was buying (around 110p) - that's what makes a market and keep things interesting!
Posted at 09/11/2017 19:43 by norbert colon
Another investor asked the same valid question but to be honest after the AGM last year the mgt set time aside to showcase HaynesPro to me and another investor during which we got a much better understanding of their professional offering and routes to market etc. On this basis and given time constraints whilst a further specific update on HaynesPro would have been welcome, it was not too of my agenda as it's already evident that HaynesPro continues to perform very well and will over the next few years no doubt become the primary source of growth and revenue for the Group alongside their consumer digital offerings.
Posted at 31/5/2017 18:49 by mcfly79
I’ve recently become a shareholder (thanks to everyone on the board for your analysis, particularly Norbert Colon and profdoc).

I became an investor largely because of the continued expansion of the digital side of the business (in particular HaynesPro). I think HaynesPro is the kind of sticky, high-margin business that has the potential to generate large free cash flow (vs the current market cap) and also creates the possibility of a takeover.

I think accounting profit is subjective at the moment since it includes very large amortisation costs, which themselves are being caused by capitalisation of investment spend on digital content. I think an analysis of cash flows is more relevant.

Set out below is the operating cash flow before working capital movements and investment (first number) and expenditure on investment activities (second figure) for the years ended 31 May.

2017 H1: £3.4m (£3.3m)
2016: £7.0m (£6.5m)
2015: £7.7m (£6.2m)
2014: £4.1m (£3.5m)
2013: £5.8m (£3.3m)
2012: £6.8m (£2.9m)
2011: £9.3m (£2.7m

(n.b. the business is somewhat seasonal – the 2016 H1 operating cash flow before working capital movements was £2.9m and therefore increased by £0.5m in 2017)

Investment expenditure has increased significantly from 2015 onwards as the group invests heavily in digital content.

The numbers suggest that growth in cash flow from the digital side of the business is offsetting declines in the print side of the business and the net is still a healthy £7-8m of operating cash flow for the last few years (vs a market cap of £25m). Of course, this cash flow is prior to the investment expenditure which is running at c.£6.5m a year.

HaynesPro continues to grow rapidly. In H1 2017 digital revenues were £5.1m (up 50% year on year) and the OATS acquisition will add £2.2m of annual digital revenue based on their latest financials. I would hope that digital revenue in the year ended 31 May 2018 (which starts tomorrow) will be at least £15m. This is up from £6.4m in 2015.

Does anyone have a forecast from the company for planned investment expenditure in the coming years? If the investment expenditure is maintained at the current levels the company should start to generate more free cash flow as digital revenue continues to grow (and the print side of the business starts to stabilise and is supplemented by non-motoring publications).

Autodata, Haynes’s largest digital competitor in Europe was acquire in January for £340m. We can look at Autodata’s figures for an indication of the cash flow a pure digital business produces. The latest accounts available on Companies House are for the year ended 31 Nov 2015 (The 31 Nov 2016 will be lodged as some point). The 31 Nov 2015 accounts show turnover of £25.5m and free cash flow (after investment) of £7m.

It will be interesting to see the 30 Nov 2016 accounts to try and understand what justifies a £340m price tag (13 times the market cap of Haynes!). The Autodata Turnover only increased 4.5% from 2014 to 2015. The 2015 accounts state that after the 2015 year end the group acquired distributors in France and Finland for £12.4m which were expected to add £3.7m to revenue in the year ended 30 November 2016. Even with this extra revenue factored in plus growth the numbers are not a order of magnitude higher than those of Haynes.

It seems that the acquisition of Autodata by Solera was a strategic one to extend their footprint into Europe. The read across valuation to Haynes is very interesting. Perhaps a question for the next AGM – has the company been approached by any of Solera’s US competitors!

Norbert Colon – thanks for the info on the various freehold properties. Some fairly substantial cash amounts coming the company’s way that I don’t think have been appreciated by the market.

I look forward to the results of the year about to end and details of the progression of HaynesPro.

Posted at 27/1/2017 08:51 by norbert colon
Details of Tennessee property for sale:


US$ 6m = GBP 4.7m or 22% of mcap alone (mcap on stocko site is wrong as there are 2 classes of share hence actual mcap is circa GBP 21m).

UK HQ site with OPP due to be marketed shortly and I anticipate a GBP3-4m asking price so those two properties alone = 40% of mcap hence investors are getting a significant part of the excellent Haynes business for effectively nothing.

Note: original post edited due to error (purely mine!) - more haste less speed.....

Posted at 13/10/2016 13:59 by profdoc
One-third of Haynes’ (LSE:HYNS) revenue comes from a nicely profitable online information service for professional mechanics. Turnover in this business, HaynesPro, has doubled in eight years to about £8m, after rising by a very impressive 29% last year.

Furthermore, in the Report and Accounts just published the directors say that the 2016/17 year has started very well for the professional side of its business, with “strong first quarter trading”, so further profit gains can be expected.

It is the market leader in many European countries, with a duopoly in the UK and close to monopoly in other countries (e.g. 90% of the German market), with 40,000 customers, consisting of both independent auto repair shops and manufacturers of diagnostic equipment. Of the five major vehicle diagnostic equipment groups, three select HaynesPro as the preferred supplier.

Its customers are subscribers rather than outright buyers, thus there is an ongoing source of income and some degree of customer captivity, i.e. mechanics’ familiarity with the HaynesPro system, combined with natural human inertia, mitigate against switching to competitors’ offerings.

It offers data on 19,000 vehicles in 25 languages with over 1,000,000 data requests per day, helping with:
•maintenance and repair methods;
•tracing and fixing electronic faults;
•links to component codes;
•ordering the right parts;
•job cost estimates;
•comfort wiring diagrams.

There are 90,000 drawings on the system to help mechanics deal with a bewildering array of vehicles.

HaynesPro makes an operating profit of at least £1.5m, occupying more than half of the Group’s 236 employees. It is set to take on more staff, while the older paper-based manuals business sheds people.

To put HaynesPro profit in perspective: the Group’s market capitalisation is £19m, at a share price of £1.25.

(Previous Newsletters for Haynes: 11th – 19th Feb 2015, 8th – 12th Oct 2015, 29th Oct 2015, 4th – 9th Feb 2016, 18th May 2016)

(I bought at £1.159 in February 2015 and have received 15p in dividends, if you count next month’s 4p)

Some data:

While the professional division has enjoyed impressive revenue growth, UK printed manuals (paper plus online resources) have fallen over five years – see table.

Whereas in 2012 UK mechanical enthusiasts bought over £7m of manuals, in the year to May 2016 less than £5m were sold. In fact, UK manual sales have halved in a decade.

The fall of manual sales in America over the decade is also worrying, from £15.2m to £11m. But, the decline is most dramatic for Australia with sales volumes only 44% of what they were five years ago.

With volume falls of this magnitude you can understand why investors have abandoned Haynes, pushing the share from over £4 to only £1.25. The sellers do not see a future for a business that expensively strips down a car, writes a manual and then tries to interest DIYers in buying it, when they could access information from the web for free, or get the local garage to work on the ever more complex repairs and maintenance jobs.

Revenue and operating profits

Revenue £000s 2016 2015 2014 2013 2012

United Kingdom
(mostly printed
consumer manuals)
4,918 4,741 5,950 6,808 7,415

Rest of Europe
(mostly Professional,
7,971 6,700 6,591 6,106 5,918

USA (manuals)
11,021 11,963 12,685 11,164 12,888

1,093 1,859 2,751 2,553 2,496

Rest of World (manuals)
707 802 1,307 1,001 1,097

Analysed as follows:
Printed products
17,575 19,454 22,955 22,209 24,692

7,945 6,377 6,073 5,160 4,698

Rights and licenses
190 234 256 263 424

Operating profit
Op. profit
(UK + Europe)
1,471 623 949 890 1,762

Op. profit (N. America and Aus.)
340 1,237 2,612 1,755 2,625

And yet, there are glimpses of light for the automotive and the non-automotive manuals businesses.

For one, UK sales rose over the last year.

Second, operating profit in North America remains positive, despite volume reductions.

I’ll look at some more reasons for hope in the next two Newsletters.

Posted at 06/10/2016 13:01 by norbert colon
Wad.....except the valuation of the company which is up circa 25% since early June as investors begin to see the turnaround taking shape.....
Posted at 17/5/2016 09:55 by norbert colon
I am personally not discouraged by the Trading Update and/or the drop in valuation and no stock movement suggests either lack of concern or apathy!

Tough decisions need to be made in tough markets and we all know there is a declining automotive market for printed matter.

Investors need to give the refreshed Board time to make the necessary adjustments to the business.

HaynesPro is profitable, non-automotive printed titles are growing nicely and now 10%+ of sales and the balance sheet is stacked with F/H property. Planning decision due on their main application for the Sparkford site next week which will be a welcome cash injection.

Patience needed.

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