Macfarlane Share Discussion Threads

[cs44] 15/3/2012 09:40

Yes, good news for the deficit but the % drop will depend on the balance of the pension fund. I don't know the distribution between equities, bonds etc.

[aleman] 14/3/2012 10:10

I paid 17.9p yesterday.

[le frog] 14/3/2012 09:57

You can buy at 17.99 Just got a quote so the last 3 sales are probably buys (at least 1 is !)

[aleman] 14/3/2012 00:39

Pension deficits fall from £271bn at end of December to £222bn at end of February.

[aleman] 13/3/2012 16:31

These have fallen too far. The full year results commentary shows improvement in trading last year and suggests continued improvement this year. (If anything, recent economic news suggests things might be picking up even more.) If the deficit gets no worse, the dividend will be okay and, so far this year, it has probably got better as gilts yields have risen a touch and stockmarkets are up. While the interim dividend may be postponed if the pension deficit deteriorates to worse than last year's level, I don't think its worth selling what is still basically a sound company with decent dividend prospects that might still payout as normal, anyway. I've topped up.

[cs44] 13/3/2012 08:54

I suppose the share price will be under pressure for some time and we could see new lows. It might tempt someone to throw in a bid for what is basically a decent business and then, if the bidder can wait until bond prices bring the deficit down, they will have picked up a bargain. A galling scenario for long-term holders but that's the way of the market!!

[topvest] 06/3/2012 09:50

This is a good company, but the pension deficit is way too big relative to it's size. Lots of small cap funds seem to like this, but the pension issue was always going to constrain the dividend to a greater or lesser extent and needs to be resolved. I don't invest in small companies with material defined benefit scheme deficits.

[aleman] 06/3/2012 09:17

Had a quick scan of other company pension assumptions and the seem to use 4.9% discount rate as opposed to MACF's 4.8%. I'm not an actuary but I'd guess this adds about £1.5m to the deficit. I wonder why they chose to use a more severe assumption.

It's also worth remembering that borrowings are low. Other companies may have lower deficits but may well be carrying higher debt. If MACF had a £10m deficit and £17m debt instead of £20m and £7m, operating cashflow would fall to around £5.4m (£800k higher interest, £200k lower tax) but I'm sure it would be much better received by the market. That would also probably mean we would then only be paying an extra pension payment of £1m per year instead of £2m so operating cashflow would actually be higher! Why don't they borrow to pay it down?

[cwa1] 06/3/2012 08:13

Sounds about right Aleman, sensible results but the sizable pensions increase could well spook some of the horses. Do agree that this might well be about the nadir of the pension deficit though. The comments on the dividend looked fairly guarded too which, again, won't make many happy but are just realistic comments.

All in respectable but not exciting.

[aleman] 06/3/2012 07:52

It's worth noting they've made some steep changes to life expectancy and mortality assumptions this year after only modest changes in the previous 3 years. Also, stockmarkets are up from year-end values. I'd suggest the pension deficit is not likely to deteriorate as badly in future and could improve, not that it won't be a problem for a while. I think things should be okay if operating cashflow continues its improving trend but the dividend probably won't increase for a few years and could be threatened if things deteriorate. We need the economy to avoid recession. I'd guess the shares are going to be stuck at 20p or so for a while.

[aleman] 06/3/2012 07:36

I think the results would be quite respectable if it weren't for the pension deficit.

[hvs] 05/3/2012 12:13

Think the buying is a good sign.

The business is finally turning for the better.

[cs44] 05/3/2012 11:58

Thanks Aleman. I must admit I haven't been following small cap volume pre-results.

[aleman] 05/3/2012 11:40

I've seen no significant preresults buying in smallcaps I monitor this year or last. Nobody seems to feel like taking the risk. If this were 2003-2007, I wouldn't have raised an eyebrow as smallcaps rose before most results on speculative buying. The only thing I can think of that would explain it is a tip somewhere ahead of results. THat can ever be ruled out. I'm not complaining too much. I'm hoping it portends good news!

[cs44] 05/3/2012 11:18

I don't think the move is significant, more a reflection that the share overhang seems to have cleared for the moment. There are always punters who buy into the results hoping for a quick turn and, without the willing seller to provide stock the price rises.
MACF are good at keeping news safe.
Given the IMS I think the share price could be supported at ca. 25p
and if they have taken a fair share of the burgeoning internet packaging demands then something north of 25p is possible.
Edit:
I would love to be proved wrong!!

[aleman] 05/3/2012 11:05

Another 2 buys. Fishy.

[aleman] 05/3/2012 10:39

6 buys in first couple of hours? Unusual, and just ahead of results. HHhhmmm....

[hvs] 02/3/2012 17:20

Topped up today with 75K .

[cwa1] 02/3/2012 16:40

Yes, taken a small interest as a punt ahead of Tuesday, for one :-)

[aleman] 02/3/2012 16:03

Some life ahead of Tuesday's results?

[aleman] 24/2/2012 11:45

You are most welcome. I'm always happy to take the time to help anyone who appreciates it. (Only the minority on ADVFN, it often seems, unfortunately.)

[bernie37] 24/2/2012 11:28

Aleman, Thanks for putting that in a nutshell

[aleman] 24/2/2012 10:55

Market makers carry a limited amount of stock. If they get hit by a big buy it can wipe their stock out and they might even go short to take the order if they can attract enough compensation, i.e. they will charge a price over the offer so the extra they get covers the risk of running a short position. WHen they are short of stock they will only offer limited amounts at the normal offer price but will offer to buy considerable amounts at the bid price, or even higher than the bid price so they can get extra stock in to replenish their normal holding stock. The whole process can equally work in reverse, buying a big amount from investors at a lower than bid price and ending up with too much stock if the price taken justifies it. THey might then offer large volumes to investors or sell lower than the offer price until their stock falls back to normal. Either situation can also a rise if there is a run of smaller deals that are all buys or all sells. THe MMs will move the price up or down accordingly but will still be reluctant to sell a big amount if they end up short as the price rises or buy a large amount as the price falls.

So, the amounts on offer at any one instant can indicate whether MMs have lots or little stock and which way the price is likely to move in future if the trades that come in don't work in their favour balance things out again.

[cs44] 24/2/2012 07:13

bernie

Basically yes, they provide a market by matching up buyers with sellers. Normally they don't hold much stock.
If you google "stock market marketmakers" you will get the definitive explanation.