Omega Share Discussion Threads

[easytimes] 06/11/2004 11:03

This came out in October's edition of Growth Company Investor (for those who haven't seen it)


"Company - Omega International
Recommendation - STRONG BUY
17/09/04

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Sector Mkt Cap at 17/09/04 Price at 17/09/04 Market Place
Household Goods & Textiles £37.59m 133p AIM

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Current price at 05/11/2004: 150.0p



Commentary:
Fast-growing kitchens outfit Omega, which floated in April raking in £2.25m of new money, delivered some eye-catching maiden interims showing growth in its share of a huge UK market. Pre-tax profits for the half to 2 July grew 46% to £1.6m, on turnover up 19% at a milestone £10.3m. Omega also pleased analysts with improved gross margins of 46.2% (43.8%) and a 42% jump in adjusted earnings per share to 4.4p. Steered by chief executive Francis Galvin and finance man Martin Levitt, Omega designs, makes and markets kitchen furniture through three brands - Sheraton, Omega and Chippendale - which are sold through hundreds of independent retailers. Explaining the strong numbers, Galvin pointed to first half investment in obtaining new display dealers, the refreshment and strengthening of displays at existing customers, and an increased product range. All of these factors will drive second half growth and Galvin claims orders are running ahead of the same period last year. Omega, which operates out of a 205,000 sq ft factory near Doncaster, owning the freehold, has plenty of spare capacity for the next few years. Galvin estimates the company has only 2% of a £1bn UK market, forecast to grow at 2% a year over the next three. We also like the fact all of Omega's senior management team hold shares or options in the business. This makes the shares a strong buy."

[easytimes] 27/10/2004 17:36

Neefax - read a very detailed article on this company in Growth Company Investor, I was going to post here it but it is very large. What I like about this company is 1) the business of quality kitchens which is in a mega growth cycle at the moment 2) the effciency of the business producing high quality goods at a high margin 3) the capacity to quadruple production (x4 yes 4 x £10 million) within their new high tech factory. I can see why they were rated as a Strong buy and highly under valued. Fact is they would be 'cos they've only just joined AIM. Just takes one major retailer to come on board and these will not disappoint IMO.

[neefax] 27/10/2004 11:10

This company will deliver some excellent growth without acquisition over the next 3 - 5 years, (it has sufficient capacity to expand its plant at Thorpe, Doncaster). I suspect that the company will announce another major retailer signing up to sell its products, not however an out of town shed, more likely a department store style retailer. IMHO.

[dennyinv] 26/10/2004 15:12

fairly priced indeed.

[easytimes] 05/10/2004 10:28

GCI says strong buy, IC says fairly priced (see below).

24 September 2004

OMEGA (OME)

Omega, which raised £2.25m after floating on Aim in April, reported a solid performance. The company supplies both factory-assembled and ready-to-build kitchens under the Sheraton, Omega and Chippendale brands.

Trading in a highly fragmented £1bn market, Omega focuses on the independent chains. It has secured over 500 outlets, with its largest customer being John Lewis, accounting for 5 per cent of sales. Omega sells kitchens without appliances and typically achieves up to £2,000 per kitchen. To boost sales, Omega plans to target dealers in the south. It is also working hard on product launches - 20 new kitchens have been designed so far in 2004.

Existing capacity in Doncaster should allow for sales of up to £43m (twice 2005's forecasts) and the hope is that Omega will swing to a net cash position by the second half of 2005.

Broker Evolution expects full-year pre-tax profits of £3.6m, giving EPS of 9.7p.



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Ord price: 135p Market value: £37m
Touch: 130-140p 12-month High: 135p Low: 100p
Dividend yield: nil PE ratio: 28
Net asset value: 37p Net debt: 32%
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Half-year Turnover Pre-tax Earnings per Div per
to 2 Jul (£m) profit (£m) share (p) share (p)

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2003 8.7 1.09 3.1 nil
2004 10.3 1.60 0.3 nil
% change +18 +47 -90 -

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Current trading looks good, but Omega's shares are now above the float price of 113p and trade on 14 times full-year expected earnings. The upside from here appears limited. For now, fairly priced.

[lo1980] 27/9/2004 06:50

Hi, if you click 'edit' next to your very first post on this thread. There will then appear some tick boxes, ie. charts and fundamentals. Tick these and then they will be displayed.

[neefax] 23/9/2004 14:42

lo1980

If I knew how to insert the charts, I would.

I agree with you, things are happening here. Omega are very well managed and have a defined plan of growth, they have targeted their market and I have no doubt about the size of it, its as you say around 1 billion according to the prospectus. I guess that within the next 2 - 3 years Omega will again increase manufacturing capacity to cope with its sales. One to tuck away as the shares are very thin on the ground and are tightly held.

[lo1980] 18/9/2004 08:13

Neefax, please could you put the charts at the top of this thread, thanks. I am now watching this company, it seems great things are happening here. The company currently has 2% of a 1Bn UK market and is forecast to grow a further 2% each year over the next 3 years.

Source of info: GCI (Strong Buy) 17/09/04

[neefax] 14/9/2004 19:23

Well I'm a tadge disapointed that no one is really interested in this stock. However tomorrow the figures are out and I suspect a darned good trading statement (price moved today on thin volume). Lets wait and see!

[neefax] 19/8/2004 20:21

Does anyone have any clues as to how well (or badly) this outfit is performing??

[greatbear] 23/5/2004 20:27

Neefax, no.
Mention was made in SCSW, re the frantic pace of acquisitions, and the eventual crash after some accounting scandals.

GB.

[neefax] 20/5/2004 13:12

Greatbear, were you ever involved with the 'Spring Ram Corporation' as a shareholder. It was a good outfit insofar as pproducts, marketing etc. (bit of a bummer accountancy wise) however some of the talented management are with Omega, makes its an interesting punt, I think.

[greatbear] 20/5/2004 11:58

Neefax,

I'm confused as well.
Not planning to bail out though.

GB.

[neefax] 20/5/2004 11:24

Greatbear, thanks for that, cannot understand the price today on apparently no volume?

[greatbear] 11/5/2004 00:24

Mention in the SCSW over the weekend.
I think this is really undervalued.

200% EPS growth to end of this year, and 25% the next year.
These should easily double over 12 months.

[neefax] 14/4/2004 21:24

This company has floated on AIM yesterday, the price at issue 113 pence. Does anyone have any knowledge of this company, if so, what are its prospects.