Low & Bonar Share Discussion Threads

[justiceforthemany] 17/10/2017 15:19

£1M Buys - share price up 5% so far. Someone's confident...
12:51 69.00p 1,500,000 £1,035,000 Buy O
12:51 69.00p 1,500,000 £1,035,000 Buy O

[rathkum] 17/10/2017 13:57

IC has a buy recommendation.

[nigelmoat] 17/10/2017 13:26

Some confident buying here today. Yesterday's fall totally overdone but good buying opportunity imo.

[baner] 17/10/2017 09:24

Justice......

They are trading at around book value - including massive goodwill in the balance sheet! Deduct intangibles and consider what deficit value there should be in Civils, and you will see that the implicit good will at which these shares trade is massive. Price to TNAV is more likely 300%+. This also imply that the gearing is far too high at ca 200% of TNAV - a clear warning signal. If you look at the lousy price they got for the Agro business, you will see that L&B is more likely to repair their balance sheet by issuing new equity at dilutive terms, than being able to raise good money for their remaining assets. There are indeed some really good and well run businesses in there, however if these are sold to raise funds, profits will be eroded. A vicious circle indeed.

[justiceforthemany] 16/10/2017 16:29

Given it is now trading at book value and on a P/E of just 10 with a nice 5% dividend I would say all three are solid buy signals. Could easily see 90p-100p here.

[rathkum] 16/10/2017 15:49

Broker Peel Hunt still reckons L&B's a 'buy'. It lowered its price target by 9% to £1, but that still suggests upside of around 55%.

It managed to bounce back from 2014's travails within the year. Can it do the same again? Judging by the share price chart, expect a bumpy ride.

[justiceforthemany] 16/10/2017 11:50

Actually in the 6 months to May 2017 Civil Engineering contributed nothing and in the full year 2016 it was £4M which was <10% of profits. This is now trading on a P/E of just 10 and yielding around 5%

[cc2014] 16/10/2017 10:13

I've read the accounts now and I'm puzzled over the statement over the lack of improvement in working capital in civils due to adverse product mix. It really doesn't make sense to me unless they have a pile of specialist stock they can only use on large projects which is sitting around and not shifting at all (or they have a manufacturing unit which is inflexible in it's output).

tbh I perceive an 18% fall as overdone but 65p hasn't yet hit my "go long at a stupidly low price rule". I may be tempted once I've done more research

[eastbourne1982] 16/10/2017 10:10

If they sold the interiors & transportation division they would / should recoup most of the current market cap imho.

[meijiman] 16/10/2017 09:55

Fair points. Hardly the end of the world but I think there is a concern that once this is sorted there will be 'something else' next year to knock the share price

[mortimer7] 16/10/2017 09:50

The above illustrates the proportion of the C E business which is the sector which indicates cause for concern in todays update.
Hardly merits the 18% drop in the share price IMO.

[mortimer7] 16/10/2017 09:48

johnsoho - to back up your point:
This info extracted from last full year results by sector

Op.Profit / Revenue

£10.9m £ 73.4m Building & Industrial

£ 4.2m £ 90.8m Civil Engineering

£ 8.7m £129.8m Coated Technical Textiles

£17.1m £106.0m Interiors & Transportation

£40.9m £400.0m

[johnsoho] 16/10/2017 09:45

I also like this bit of news from the Trading statement

‘Raw material prices in the second half have been influenced by a number of factors, including the impact of the hurricanes in the US, and have remained at elevated levels rather than reducing as anticipated at the half year. Robust actions to recover this incremental cost through price increases have been taken in all business units along with cost saving initiatives, which have together reduced the impact on margins.’

So presumably the margins these businesses are making must still be fairly ok?

As I said earlier I think it’s just a typical market over reaction and the price will recover much of today’s share price markdown over the course of the next few days. No advice intended.

[cc2014] 16/10/2017 09:30

Trying to run my ruler over this quickly.

£149m debt on a £400m company is fine is you're making £30m a year but is a problem if the profit drops.

Can't figure on a 5 minute look why the profit isn't flowing into terrible negative cashflow.

Is that about the state of it?

[johnsoho] 16/10/2017 09:24

I think the share price drop is a typical market over reaction particularly when the Trading update ends with these words ‘The Board continues to expect the Group to show good progress overall for the year to 30 November 2017.’

[meijiman] 16/10/2017 08:47

Pathetic stuff from a serial disappointer.

[baner] 16/10/2017 08:37

This looks increasingly problematic. Balance sheet not strong, another division now below targets......they took a large book loss disposing of one business unit recently.......any more skeletons coming out soon? For how long will shareholders be patient with current management? Next stop 50p. If that.

[ed 123] 10/10/2017 16:09

Yes, but it still feels there is support here.

I wouldn't be surprised to see a late reported buy at the end of today.

[rathkum] 09/10/2017 13:06

Very short honeymoon!!!

[ed 123] 06/10/2017 18:45

Felt I was not alone in topping up recently. :-))

Yes, see what Monday brings. Most likely nothing, though.

No problem. On current knowledge, I would be happy to hold here for 3 years or so and let the market price its progress.

[rathkum] 06/10/2017 17:53

Yes very interesting last five minutes trading. See what Monday brings.

Glad I topped up quite aggresively in the 77p-79p range. This is one company I feel the market has left behind.

[ed 123] 06/10/2017 16:53

Someone was keen at the end of today.

Share price rose by 5.5p in the last five minutes. :-)

[ed 123] 22/9/2017 16:08

Dividend payment today.

Quiet time of year here (year end 30th November).

They seem to be on track. I see LWB as a buy and hold for medium term. Next two years should produce good profit growth, due to recovery in coated technical textiles division, increased production capacity in US and China, and healthy markets (eg. Europe finally picking up growth).

[keyno] 18/8/2017 16:56

I just hope they get paid! ;)

[ed 123] 18/8/2017 13:42

Nice one, Rathkum. Ta. :-)