Hayward Tyl Share Discussion Threads

[pugugly] 15/5/2017 10:34

?? News leaking ?? share price falling fast but on light volume - looks to me as though no buyers and market waiting for news on progress of t/o pricing.

[rogerrail] 03/5/2017 11:38

To correct the inaccuracy in the statement made on Cerrito's post about overlap in nuclear, no AVG are not just involved in decommissioning!
AVG's Stainless Metalcraft unit are an approved supplier to Rolls Royce Nuclear for heat exchangers,pressure vessels and other components(RR have been awarded preferred bidder status for heat exchangers for HPc).
Maloney Metalcraft are an approved supplier to EDF and last year won a £3.5m contract for performance critical valves and site support for current nuclear plants.
No doubt there are combined sales channels for these two companies and HAYT. Additionally due to the proximity of Metalcraft (Chatteris) to PB , there is a high likelihood they would have provided subcontract machining and metal plate fabrication services to PB. This may offer an opportunity to reduce fixed overheads at PB.

[meijiman] 02/5/2017 14:14

That's a very shrewd post thorne. The other thing that takes time is sorting out who gets what job. AVG might want rid of the HAYT ceo but that is hardly likely to get them across the line on a sweetheart deal.

[thorne3] 02/5/2017 13:26

The thing to remember about AVG is that it has next to no profits to talk of and a very high share price which has been largely wound up on the back of a possible deal with HAYT;accordingly AVG really does need a deal if it is to sustain its reputation as a
"mini MELROSE".I for one would not want any AVG paper at this level and nor I suspect would the Directors of HAYT.The net result is that any takeover talks are probably in limbo at the present time and that AVG is being used very much as a stalking horse to enable HAYT(1) to arrange an equity placement of say £7.5m on acceptable terms and (2)to finalise a lending package with its bankers.At that stage I would imagine that there might be a number of companies around with sufficient clout to acquire HAYT for cash on terms agreeable to us all.

[cockerhoop] 02/5/2017 13:25

PA,

Just to clarify a few inaccuracies in your recent post:

The share price of AVG is up over 25% compared to the Tender Price

The AVG management tendered less than 50% of their combined shareholding in the recent tender offer so still have plenty of skin in the game so I think it's disingenuous to suggest current holders have done the opposite of management.

I'm also slightly confused about your 'whiff of desperation' comment as as far as I'm aware HAYT have been the company issuing the RNS's etc highlighting the bid, etc Whilst AVG have just been acknowledging HAYT RNS's.

I assume the potential multi-billion 3m3 nuclear storage contract that AVG is sharing with 1 other manufacturer doesn't excite you?

[cockerhoop] 02/5/2017 12:58

Graham,

Forgive me but I'm confused - how does an article from May 2015 shed any light on current order patterns?

[grahamwales] 02/5/2017 12:25

With regard to potential bid if FMC think the company are up for sale then they may be interested.

[grahamwales] 02/5/2017 12:23

Was answering an earlier question regarding customers being put off at the moment. Didn't seem to bother the customers that placed orders at the end of March.

[pavey ark] 02/5/2017 09:24

Cerrito, nice to see a declared, upfront interest in AVG but I don't think you should beat yourself up about going with the tender offer as the AVG management were only too willing to take the cash and they should know.
Nothing has really changed with AVG since the tender offer except that it has been tipped repeatedly in IC.

As far as valuing HAYT, I think that most of the HAYT ( sorry AVG) shareholders need to consider a number of points.
Now I know that your shareholding in AVG has risen by c.20% since you thought you knew better than the management but I get the distinct whiff of desperation here and it looks to me that this deal is becoming very important to AVG.
HAYT and almost every other company runs on a certain amount of debt and to suggest that they should be made debt free as a result of any deal is simplistic ( stupid?)
Year end March 2015 EBITDA £6.5m
Year end March 2016 EBITDA £7.2m
H2 march 2017 estimated EBITDA £4.5m
And with the very large order book and significantly increased t/o an EBITDA of £8m this year looks perfectly reasonable.
Now I have a significant holding in another engineering/ defence company and
Edison research produced a very detailed table of the EV/ EBITDA ratio for over 20 similar companies with the average coming out at c. 10 times.
Now if I put a low value of 8 times EBITDA on HAYT we get £56m to £64m EV ( £7m -£8m EBITDA)
Obviously the debt is a moveable feast but with this level of cash generation the debt will come down.
If I am using these figures obviously the people trying to negotiate a deal will at least have to take them into account.
The AVG holders here seem to have given the above figures little or no thought and appear to be working on the assumption that AVG can get some dream, low ball, deal.

[cockerhoop] 02/5/2017 09:08

No reason to believe it isn't but surely to suggest they're possibly considering a bid is based on no evidence whatsoever.

[grahamwales] 02/5/2017 08:54

So do you think the agreement is still in place.

[cockerhoop] 01/5/2017 23:00

That article is 2 years old Graham

[grahamwales] 01/5/2017 22:50

One of HAYT customers that seem to be more than satisfied, who knows they may even be considering a bid.


www.oedigital.com/subsea/item/8969-otc15-fmc-hayward-tyler-sign-agreement

[varies] 01/5/2017 16:35

Cerrito
Thank you for giving us your view as an AVG shareholder.
To my mind an offer of 2 AVG shares for 7 HAYT with a cash alternative for half one's shares would be a satisfactory outcome for us HAYT shareholders if we can get it.
This would limit the outlay and leave the combined group with enough cash to develop the business.
In the meantime I fear that uncertainty about HAYT's future may put off some customers.

[cerrito] 01/5/2017 14:35

Catching up here.
I agree with PA and others that it seems the AVG bid is sufficiently attractive that it cannot be rejected out of hand by HAYT; reading the Friday 7am RNS my main concern is that management is so tied up with the AVG offer and getting the financing sorted out that not enough focus can be given on the other key issue getting the new COO Dr Elcoate bedded in and winning orders to keep the Luton and Peterborough plants fully occupied ie orders may well be low in H1 17/18 and they will have a plausible excuse.
I am a shareholder of AVG and have been in and out over the last 5 years but do not have a good feel of management and have not organized myself to make an AGM. I did run into the Chairman when he chaired AUG-in which I have shares-and he did impress me and seems miles better than HAYT’s Chairman.
It is still not clear to me what AVG brings to the party..there is the nuclear overlap but AVG is involved in decommissioning and as far as I can see HAYT in new nuclear.
On the basis that AVG need to pay a premium to the current marcap of HAYT, provide some long term capital that I think we all agree that HAYT needs and the transaction costs there will not be any change from £38/£40m; AVG will want to pay for HAYT with their shares which at 250p+ seem rather over priced and I have no idea what view HAYT’s institutional shareholders have of AVG paper.
Anyway the net result of my musings was to reduce my modest AVG holding(I made the mistake of going into the AVG tender offer).I appreciate that probably no one else on this board would have reached this conclusion.
For me HAYT shares are at the moment correctly priced

[nearlythere] 28/4/2017 13:10

Pavey Ark

It seems to me that Hayt would be in a much stronger position if the financial ( I agree they are short term) matters was sorted out. It may be, as Roger Rail pointed out, that the bank talks will be defunct if a takeover occurs. However that is by no means certain.

Either way it will be interesting to see how this develops over the next few months.

[cockerhoop] 28/4/2017 13:03

Such was the level of activity? You mean £17m less than management expectations up until 20th February.

Imagine what the short term debt issue would have been if they got anywhere near their £80m forecast for last year :-)

[pavey ark] 28/4/2017 12:55

nearlythere, such was the level of activity at the end of H2 that RBS increased their short term borrowing in order for HAYT to cope with their greatly increased order book.
Obviously these orders take time and it also takes time to get the cash in.
I agree that the management have not handled the cash flow situation anything like as well as they should have but it still looks very much to me (and RBS ?) that this is only a short term cash flow situation.
I have seen no indication that there is anything more sinister going on but that's a call that each investor has to make on his own.

[tini5] 28/4/2017 12:22

Is AVG the only play in town or are there other potential suitors waiting for them to show their hand?

[rogerrail] 28/4/2017 12:21

nearly

No surprise at all, all linked to the approach from AVG which appears amicable, why should they agree long term finance when it may not be needed and why worry about a short term debt if it will be paid off by AVG? I am sure the arrangements will have be agreed and in place in case the merger fell through.

[nearlythere] 28/4/2017 12:03

Not the news I was hoping for. Why it it taking so long to deal with the banking facility, this has been dragging on for some time now.
I assume the RBS has all the details re order, costs etc and still only providing another extension
It gives the impression of a company surviving month to month, which is hardly a position of strength for take over discussions.

[steve3sandal] 28/4/2017 11:55

Further to the announcement of 16 March 2017 Hayward Tyler Group plc, the specialist engineering Company comprising the operating companies of Hayward Tyler and Peter Brotherhood, is pleased to confirm that it continues to have constructive discussions with its bank, Royal Bank of Scotland ("RBS"), regarding a suitable long term financing structure to support the longer term prospects of the business. The Group also continues to discuss have constructive discussions with RBS with respect to the repayment of GBP2.4 million of short term banking facilities and the annualised measurement of the financial covenants, both of which have been extended from 30 April to 31 May 2017.

[nearlythere] 28/4/2017 09:46

" The purpose of this extension is to provide the directors of both Hayward Tyler and Avingtrans the opportunity to continue their discussions, including the provision of key information to assist Avingtrans in understanding the value of the Company. "

I would have assumed AVG has a good idea of Hayt value before starting the process, so it may be that Avgs offer is low. If RBS are unwilling to provide longer term support after the RNSs re orders lately, then IMO it may be that something more serious is happening.

[steve3sandal] 28/4/2017 09:11

Announcements today are not really surprising. There will be another as HAYT need to repay RBS, is it, £2.4m today. If they can't, I don't see them extending long term facilities. Given takeover discussions most likely a short extension, for another nice fee. All very messy and unbelievable that the board have put themselves in this position.