Northern Bear Share Discussion Threads

[kiwi2007] 25/6/2009 12:28

I see you've a note out today Anna - any chance of a peek?

[kiwi2007] 25/6/2009 12:21

Unsurprisingly the house broker, who owns shares in the company, has a buy note out.

The share seems fairly valued at this price to me - however the dropping of the final dividend will annoy a lot of holders I'd imagine.

[kiwi2007] 25/6/2009 07:46

11.5p EPS - no divi though - sales targets seem to have been met but margins down ? Pre market price up quite a bit!

[anna faelten] 17/11/2008 13:13

Broker Note on NTBR from St Helens:

Northern Bear (NTBR)


Mkt. Cap.: £12.6m



Recommendation: BUY


Price/Target: 67p/110p

Event: Interims







Interim profits were in line with forecast with good revenue and margin growth. Northern Bear (NTBR), through its buy and build strategy, benefits from a diversified revenue model and has substantially reduced its exposure to the new house build sector (c. 10%). Given the general economic outlook and increased competition, however, we are reducing revenue and margin assumptions for H2 FY09 and FY10. As a result, we expect FY09 PBT of £3.5m (from £4.4m) and EPS of 13.1p (from 15.9p). We maintain our BUY recommendation but set a new price target of 110p (from 145p) to reflect the lower forecasts and peer group ratings.


I should declare that NTBR is a corporate client of RSH, for whom I work, and that RSH owns shares in NTBR.

Anna Faelten
Rivington Street Holdings

[peel green] 08/10/2008 17:44

Anna, is it unfair to suggest that, in these crazy markets, and the huge disconnect between share price and value, 'target' share prices aren't worth a purple-striped wotsit?

[anna faelten] 08/10/2008 17:12

Another GECR update on Northern, as usual, I should declare that Northern Bear is a corporate client of RSH, for whom I work, and that RSH holds shares in Northern Bear, but I thought this note might be of interest:

Northern Bear*
Buy at 81.5p – Target Price: 169p


Key Data

EPIC
NTBR

Share Price
81.5p

Spread
78p – 85p

Total no of shares
18,752,807

Market Cap
£15.28 million

12 Month Range
71p – 127p

Market
AIM

Website
www.northern-bear.com

Sector
Support Services

Contact
Graham Forrest (CEO)
0191 371 2934

We initiated coverage of North England based building services company, Northern Bear, on 8th August 2008 with its shares trading at 73.5p. In that note we argued that the 36% share price decline in 2008 was unjustified and meant the company's rating "fails to discount what is a strong growth story". Despite the market turmoil since, the shares have risen to 81.5p and a 2nd October trading update confirmed the company expects "turnover and profit before tax for the 6 month period (to 30th September) to be in line with market expectations" and on such forecasts the shares trade on a current year price-earnings multiple of just 4.8 and offer a dividend yield of 4.3%. That more than justifies our continuing support.

The trading update emphasised the company's continued successful implementation of an acquisitive strategy focussed on diversifying its portfolio of businesses away from a 'new build' housing sector which now accounts for just 11% of turnover. It also stressed that the company remains "financially sound" and "continues to operate well within its agreed banking covenants." Hence we believe that Northern Bear looks to have laid the foundations for further resilient growth despite a "challenging" general economic climate. In view of this climate the company has further tightened its acquisition criteria, but with it still seeing "ample opportunities" and having a continuing ability to fund these, we expect further acquisitive activity during the coming year.

As a result we view our forecasts as appropriately conservative, and considering the company's current performance, together with the potential for further acquisitions to add to this, we continue to regard a current year price-earnings multiple of 10 as far from demanding – a rating which suggests a target price of 169p. With the shares at 81.5p, our stance is buy.




Forecasts Table

Year to 31st March
Sales (£ million)
Normalised
Pre-tax Profit (£ million)
Normalised Earnings Per Share (p)
Price Earnings Ratio
Dividend Per Share (p)
Dividend Yield (%)

2007A
4.75
0.111
1.4
58.2
0
-

2008A
32.24
2.86
14.3
5.7
3.0
3.7

2009E
42.80
4.40
16.9
4.8
3.5
4.3

2010E
45.40
4.90
18.8
4.3
4.0
4.9




Anna Faelten
Rivington Street Holdings

[anna faelten] 19/8/2008 11:38

Hi All,

back again with an interesting note on Northern Bear, again I should declare that Northern Bear is a corporate client of Rivington Street Holdings (RSH), for whom I work, and that RSH owns shares in WMS, but I thought this note might be of interest,

Northern Bear - Initiation of Coverage
Buy at 73.5p; Target Price: 169p

Key Data
EPIC NTBR
Share Price 73.5p
Spread 72p – 75p
Total no of shares 18,752,807
Market Cap £13.78 million
12 Month Range 71p – 159.5p
Net Debt £10 million
Market AIM
Website www.northern-bear.com

Sector Support Services
Contact Graham Forrest (Chief Executive)
0191 371 2934
Incorporated just over two years ago, Northern Bear is a rapidly growing support services company based in the North of England. Despite having issued an upbeat trading statement just over a month ago the shares have fallen back by more than 36% so far this year and now trade on a current year price earnings multiple of just 4.3 and yield 4.8%. We believe that the ratings fail to discount what is a strong growth story and are initiating our coverage, at 73.5p, with a stance of buy and a target price of 169p.
Northern Bear was established in April 2006 to acquire and become the holding company of a group of support services and materials companies based in the north of England. The company has been successful in executing this strategy – proving itself able to acquire mature businesses at less than 3 times their earnings. This ability is due to the strong support the company enjoys from its bankers which means it is not reliant on issuing equity to progress its acquisitive strategy. Typically acquisitions will be funded 75% in cash, with the remaining 25% in Northern Bear shares to ensure vendor's retain a residual interest in their businesses' performance. This structure gives Northern Bear strong negotiating power and in a time of depressed company valuations, the company has been able, and looks set to continue, to acquire on very favourable terms in 2008 and beyond.
The company joined AIM on 19th December 2006 having entered into share exchange agreements to acquire Isoler, Roof Truss, Springs Roofing, Wensley Roofing and Floor Joist. It now holds 12 such support services businesses (table 1).
Business Name Date Acquired Description
Isoler December 2006 Fire protection and noise reduction services to construction companies
Roof Truss December 2006 Roof trusses for house builders and builders merchants
Springs Roofing December 2006 Roofing specialist in both public and private sectors
Wensley Roofing December 2006 Roofing services to house builders and local authorities & a specialist lead work division
Floor Joist December 2006 Floor joists to house builders
MGM February 2007 Services for property and listed building refurbishment
Chirmarn May 2007 Identification, treatment and disposal of asbestos
Chirmarn Surveying May 2007 Asbestos surveying and testing
Hastie D Burton June 2007 Specialist building contractor to commercial and domestic clients
Jennings Roofing November 2007 Roofing contractor specialising in both commercial and residential (particularly local authority) work
A1 Trucks April 2008 Forklift truck provider
D J McGough April 2008 Plumbing, heating and mechanical services to primarily industrial and commercial customers
Table 1: Portfolio of businesses which Northern Bear holds.

Northern Bear focuses its acquisitive activity on well established, cash generative support services businesses and accordingly when negotiating deals places great store in retaining, and seeking long-term commitment from, managers who have successfully developed the target businesses. As a result the majority of its senior team has been with their respective businesses in excess of 20 years and in line with this, the company enables each group business to be operated with a significant degree of autonomy - with a head office in Chester-le-Street, County Durham centralising strategy, overall finance functions and consolidating the group businesses' accounts.

A key part of the company's strategy has been to diversify away from the cyclical 'new build' housing sector to provide a widening spread of services focussed predominately on local authorities, government and public funded customers. The acquisitions made since the company's AIM listing have been executed with this objective firmly in mind – dependence on new house building is now only 13% on an annualised basis, whereas 49% of turnover comes from the public sector. Therefore, while the well documented problems in the new house building sector continue to affect many construction firms, Northern Bear is benefiting from a buoyant social housing market. This is underpinned by the Decent Homes Initiative which requires all local authorities to bring social housing stock up to a set standard.

On 21st May 2008 the company showed this strategy is yielding strong results. Full-year results to 31st March 2008 showed a pre-tax profit (adjusted for an exceptional finance expense of £407,000 and share based payments of £196,000) of £2.86 million on turnover of £32.24 million, generating underlying earnings per share of 14.3p. These figures compared to an adjusted pre-tax profit of £111,000 on turnover of £4.75 million (underlying earnings per share: 1.36p) for the period from incorporation to 31st March 2007 and £1.01 million on turnover of £13.71 million (basic earnings per share: 5.1p) at the 30th September 2007 interim stage. A final dividend of 2p per share was declared, making a total dividend for the year of 3p per share and leaving the stock offering an historic yield of 4.1%.

The company generated £410,000 of cashflow from operating activities over the period and though it had £4.9 million of loans and borrowings and a £2.28 million revolving credit facility on its balance sheet at 31st March 2008 compared to cash and equivalents of £714,000 – a debt position which has since been extended by the acquisitions of A1 Industrial Trucks and D J McGough for a combined initial cash consideration of £4.97 million – interest cover was very comfortable at 5.6 times.

Looking forward, the social housing sector looks set to continue to benefit from Government commitment and with many of Northern Bear's businesses having long-standing relationships with their local authority customers, these forward revenue streams can be viewed with a high level of confidence. Even though the new house building sector currently represents a decreasing proportion of group revenue, in the long-term the company envisages this market representing up to 20% of turnover and therefore it will retain a presence to ensure it is in a position to respond as the market improves.

Accordant with this outlook, Northern Bear aims to continue the successful implementation of its acquisition and organic growth strategy. Having entered into new banking arrangements with Yorkshire Bank in November 2007, the company continues to have the capacity to expand further and the success of its activities to date have reportedly led to significant vendor interest, resulting in a strong pipeline of potential acquisitions.

Our forecasts don't include further acquisitive activity and therefore considering the company's record thus far, we regard them as highly conservative. Even on this basis the current year price earnings multiple is a lowly 4.3. Considering the growth being demonstrated and clear forward strategy, a current year multiple of 10 seems far from demanding – a rating that suggests a target price of 169p. Additionally, a recent re-classification of the shares from the FTSE building materials sector to the support services sector may boost sentiment and we initiate coverage with a stance of BUY.

Forecast Table:
Year to 31st March Sales (£ Million) Normalised Pre-tax Profit (£ Million) Normalised Earnings Per Share (p) Price Earnings Ratio Dividend Per Share (p) Dividend Yield (%)
2007A 4.75 0.111 1.36 54.0 0.0 0.0
2008A 32.24 2.86 14.3 5.1 3.0 4.1
2009E 42.80 4.40 16.9 4.3 3.5 4.8
2010E 44.40 4.70 18.0 4.1 4.0 5.4

[patrith] 03/7/2008 11:54

There is an interview with Graham Forest of Northern Bear on Trading Places TV programme on

[downend] 30/5/2008 20:35

Cheers,matey.

[toepath] 29/5/2008 07:57

downend,graham forrest.got the video.all the best

[downend] 26/5/2008 19:22

Which man toe? Have you got a link or a cut n paste? Sorry to be a nuisance. I think I failed to correctly file my advfn daily recomendation featuring Northern Bear.

[toepath] 26/5/2008 17:07

looks very very promising;within a month,the man said for revaluation.

[downend] 26/5/2008 16:44

An interesting stock and paying a divvie so soon after float.Seems to indicate strong pre-float profitability extending into plc profitability which is even stronger. I can't yet get my head completely around the valuation, maybe cos I've only just started looking.

St Helens and Dawnay are saying eps for the current trading year 08/09 of 15.9p and 15.12 respectively. Redmayne Bentley are saying 17.90p!

SDY is another in the support sector although not exactly in the same type of work and they seem to be on a PER of 11 or 12. If that appliesd to NTBR they would be on an share price of around 176p. Is it a valid comparison?

I see that the group have good public sector contacts and contracts eg Catterick Barracks, and church roof work.

Is the stock a little under-recognised still?

I must have a butcher's at the video now.

[sbs] 14/5/2008 08:59

Graham Forrest, CEO of Northern Bear, talks about his company in , filmed at the recent show.Charts nicked shamelessly from This_is_me.ChartsLong Term Chart