Macfarlane Share Discussion Threads

[cs44] 09/11/2009 08:47

I'm interested to understand how pumping £2m per year into the pension pot will not decrease the deficit. Am I being naive?

[wjccghcc] 09/11/2009 08:38

Not sure the pension deficit problem is addressed. They're paying an extra 0.7mm per year just to stand still.

[cwa1] 09/11/2009 08:24

Yes, very satisfactory and upbeat by MACF standards!

[cs44] 09/11/2009 08:14

That is a very positive IMS for MACF. Cash flow good, pension deficit problem addressed and improved profitability. I'm impressed.

[cs44] 05/10/2009 13:45

Am I correct in thinking that Kite Packaging now have a shareholding of some 23m? It looks as if Edinburgh Partners sold their stake when they were taken over and most of it was bought by Kite. KPG Holdings is a company connected to Kite. This is a large investment by a competitor!

[battlebus] 25/9/2009 16:16

Absolutely Aleman the long road to recovery has only just begun and future prospects look much better than they did for years.

[aleman] 25/9/2009 10:47

The divestments, acquisitions and cost-cuts have improved the quality of the business as was shown in the interim results. I don't invest on what a company did a couple of years ago. I invest on what it is going to do in years ahead. This company is going in the right direction.

[undervaluedassets] 25/9/2009 08:10

there is only one thing that improves the value of a company long term

growth of shareholder equity

long term MACF has shrunk shareholder equity

and the long term share price has reflected this

[battlebus] 24/9/2009 21:08

couple of shorters. price falling not surprisingly after such a strong run but will recover.

[aleman] 24/9/2009 13:06

undervalued assets - you are way off the mark. What are you on about "profits vanishing"? And the balance sheet is fine. Poor cashflow kills companies. The balance sheet doesn't matter if the cashflow remains good. This has been a weak year and the company looks like having operating cashflow of about £3.5m or more for the full year (i.e. maybe £6m in H2.) If the economy continues to improve and/or trade credit recovers, this could be higher. MACF reduced its trade credit by £5.6m in H1 to £23.9m. It was only a £3.6m reduction in H1 last year so there is scope for a larger rebound in H2 as it is now owed notably more than it owes. It was a very large cash cost that can't be repeated so there will be more cash available in future. Despite H1 having a better overall operating cash outflow of £2m, they freed up £560k towards the £15m pensions deficit in H1 by halving the dividend and this should be enough annually if stockmarkets continue to recover. In H2, a £6m cash inflow (or more if markets are favourable) would mean they could pay a big chunk off the pension deficit if they wished so it is clearly not a problem. I remind you of the outlook statement:

As the UK economy begins to recover, the benefit of our 2009 actions means that Macfarlane is particularly well positioned to be a beneficiary of an upturn in demand.

There has been a modest improvement in the economy which is expected to return to GDP growth in Q3. (Latest forecast 0.3% Q3 and 0.6% Q4.) The weaker £ in recent weeks will be particularly helping MACF's manufacturing customers as a bonus so MACF look set for a very strong H2 for cashflow. I expect they will probably pay a full 1p H2 dividend, have a substantial overdraft reduction and still pay some extra off the pension deficit on top. I think they could actually manage a higher H2 dividend but won't do so until the pensions deficit is seen to fall. You will note the company has no long term debt and this could be utilised to pay down the pension deficit were it to become a problem. More likely, there is scope for expansion by further small acquisitions while target prices have been reduced by the recession.

I note a broker has reduced forecast turnover for 2010 but increased eps slightly so as to take consensus from 2.35p to 2.4p. This will be due to the round of price increases in the UK packaging industry this summer.

[undervaluedassets] 24/9/2009 11:51

but how can intangibles have nearly gone up since 2005???!!

when profits have vanished and so much has been sold off

[cs44] 24/9/2009 09:42

If the situation arose where the company couldn't service its loans and contribute to its pension scheme then the goodwill and intangibles would have little value. However, as with many companies, this is not the case with MACF, indeed it is paying dividends. The fact that a competitor has recently taken a 12% stake in the company wouldn't suggest that MACF is close to the abyss.
I have the impression that the newcomers to this thread have a vested interest in seeing the share price fall.
Of course, as a holder, my view might be somewhat biased!

[undervaluedassets] 24/9/2009 09:20

take them away and you have - BUST!

[undervaluedassets] 24/9/2009 09:20

must say I think goodwill and intangibles in the balance sheet are preposterous

[battlebus] 19/9/2009 21:15

Exactly Aleman.

[aleman] 19/9/2009 20:13

1st half results were satisfactory - and that in the worst economic period for perhaps 30 years. The directors have been improving the business with a number of small disposals and acquisitions in recent years which haven't helped the balance sheet but have improved the underlying profitability and cashflow so the business is now in a better position to cope with the pension deficit and expand. The outlook is quite good, which is why the shares have been rising since the interim results.

[battlebus] 19/9/2009 13:39

Two views that seem to differ with current market and investor sentiment. No doubt they have a problem with the pension deficit which was mentioned in the recent results which is currently being addressed. The current strong run will reverse at some point but not enough to make this a short! Imperilled takes the biscuit really anyhow thanks for the laugh- happy to be a MACF shareholder now back to reality.

[undervaluedassets] 19/9/2009 12:44

and how many times have they come capin hand to the market in the last 10 years ?

anyone know?

[weemonkey] 19/9/2009 10:53

this business is just pants isnt it ?

20 million hole in pension fund currently

share holder equity declines from £39 million in 2003 (when intangibles made up £17 million of that )....

to....

... just £23 million with intangibles making up an eye watering 26 million of that . (how intangibles can be valued so highly when the business is a serial underperforer is beyond me)


and virtually no cash.

They say the darkest time is just before the dawn but sometimes with shares the darkest time is just before lights out!

this lot look imperilled if you ask me

[aleman] 16/9/2009 15:33

It is the same report getting being made accessible to the public the old fashioned way.

Bigger buys have moved the shares up. Director buying ahead of the dividend, perhaps, or maybe that other packaging company increasing its stake?

[le frog] 16/9/2009 14:55

Is the interim report referred to in the RNS the same as the half year one released in August? If not, has anyone seen it? All the RNS says is that its available! Must be some good news somewhere to move these shares upwards!

[battlebus] 15/9/2009 18:06

WHY NOT! 25P SOUNDS GOOD

[aleman] 15/9/2009 17:19

These small rises are starting to mount up. (Perhaps we have new forecasts out?) I think the final dividend will be held and suspect the shares will be back at 25p sooner rather than later.

[battlebus] 08/9/2009 09:59

Up again on little volume and only 025p spread. No reason why this isn't back to 20p. Recovery is underway in most markets packaging etc will follow. Just look at the statement from SMDS this am saying trading was better than expected first half. All good from here.