Petards Share Discussion Threads

[rivaldo] 31/10/2017 11:18

WH Ireland forecast fully diluted 2.12p EPS this year and 2.31p EPS next year.

That's now a P/E of 10.4 falling to 9.6.

Given the very positive outlook in the interims and the £1.5m cash (against an £8m m/cap) PEG are looking pretty good value at these levels.

[noujay] 31/10/2017 09:48

Well at these prices perhaps you should tell him to buy a few more shares and take a run at it!

[chunkster] 18/10/2017 12:00

There is no liquidity nothing to do with them. Need a new order or 2, the company is sound. Does make you wonder where the volume is coming from all of a sudden!!!

[bookbroker] 18/10/2017 11:52

Amazes me that such a dull little company can practically treble on orderflow, and then proceed to lose a third again in the space of twelve months, these Abduls certainly appreciate volatility!

[bookbroker] 17/10/2017 18:16

And there is a gap to fill around 15p.

[bookbroker] 17/10/2017 18:15

Too right, but contracts require capital, and the payback only materialises in the latter stages of fulfilling those orders, cash flow negative for the foreseeable future.

[chunkster] 17/10/2017 11:51

They are dealing with workload, if I had a pound for each of your theory that never come true I wouldn't need to save for future

[noujay] 17/10/2017 11:24

Have you heard something to that extent bookbroker?

[tonytaxi] 17/10/2017 10:59

What makes you think they can't ?

[bookbroker] 17/10/2017 10:38

Abdullahs well and truly making a hash of things here, contracts all well and good, but can they deal with the workload!

[rivaldo] 02/10/2017 10:44

Good to see a £13k buy at 25.5p causing a nice move back up today.

[dave4545] 29/9/2017 11:33

Not much stock available and full offer to buy on a 1p spread so I think PEG is heading back up albeit slowly to 28-30p

[dave4545] 29/9/2017 08:52

On a day like today when a string of small caps issue mostly terrible results you get to see how cheap and good value PEG is. This should be trading over 30p. Look at ZOO it's 27 mil cap now and PEG has much better figures. Obviously ZOO's are expected to jump but value is with PEG

[bookbroker] 27/9/2017 15:48

This seems to be heading back to last years level, this company is too small to be able to handle the orders it has been winning when they have to capitalise so much expense in order to achieve the agreed terms of each contract! A good product is Eye Train, but the margins are not sufficient!

[rivaldo] 26/9/2017 14:42

Enough time has passed since publication to post WH Ireland's post-interims views.

As I posted earlier, they see 2.12p EPS this year rising to 2.31p EPS next year. At 25.25p that's a forward fully diluted P/E of only 10.9 now, and an adjusted EV/EBITDA of less than 6.

They point out that the order book has increased by 20% to £24m since the start of the year, giving excellent forward visibility.

Here's their note:

"Petards*

Interims illustrate good progress; order book +20%

Petards supplies advanced security and surveillance systems to the Transport, Defence and Emergency Services markets. H1 2017A results demonstrate a creditable performance, with growth in Transport and Emergency Services more than making up for a reduction in Defence sales. The order book has increased by 20% since the beginning of the year to £24m, providing excellent visibility over the next 18 months, including £8m order coverage for H2 2017E. Following the results, we have left our revenue and profitability forecasts unchanged, whilst reducing our year-end net cash expectation to reflect the increase in working capital and higher capex in the year. We maintain our Buy recommendation and 42p share price target.

H1 2017A revenue increased by 8.1% to £8.0m, reflecting good performances in Transport, which accounted for almost two thirds of Group revenue, and Emergency Services, offset by lower activity in Defence, albeit with the latter ending the period strongly. The gross margin moved 340bps higher to 38.6%, this reflecting the fact that two of the six major eyeTrain contracts were nearing completion. Administration costs increased by £432k, in part reflecting a full period of costs from QRO, along with higher depreciation and amortisation following increased investment. PBT of £503k was 5.9% ahead of the prior six month period, with diluted EPS moving 3.2% higher to 0.98p. The Group ended the period with a net cash position of £33k (FY 2016A £0.8m), reflecting an increase of £1.1m in working capital and total capex of £585k, principally relating to three major eyeTrain orders. Management expects to see positive cashflows from these eyeTrain contracts in H2 2018E.

The order book is reported to have increased by 20% to £24m as at 30 June, with eyeTrain accounting for more than 75% of this and including Stadler Bussnang AG on the list of customers for the first time. H2 2017E order coverage presently stands at £8m, with approaching £11m secured for FY 2018E.

On the back of the results, we have left our revenue and profitability forecasts unchanged. However, given the anticipated working capital and capex requirements, we have reduced our year-end net cash forecast by £0.9m to £0.3m before expecting to see an improvement in H2 2018E. The shares currently trade on a FY 2017E fully diluted adjusted PER of 13.8x and adjusted EV/EBITDA of 6.0x. Given the level of secured work, in addition to the pipeline of opportunities, we believe that these multiples continue to undervalue the business."

[rivaldo] 13/9/2017 10:38

Bargain time imho, especially given the high forward visibility, with the MMs screwing sellers on tiny volumes.

Beaufort are positive this morning (didn't get proof-read though!):

"Our View: Petards reported a strong performance for H1 FY2017, continuing its recent progress by winning several contracts for its eyeTrain systems.

In particular, the £4.3m contract secured from Stadler was an important step forward for the Group as it further strengthens its product position as 'system-of-choice' across the industry. Stadler is a well-known, global system provider of train manufacturing and maintenance services, operating in 18 countries with 7,000 employees. It manufactures a wide range of products, including high speed trains, intercity, regional and commuter trains, trams, tram-trains and underground trains.

Successful delivery of the current project brings potential for long-term relationship to roll-out Petards' various products to other vehicles manufactured by Stadler. An addition of Stadler lead to 6 of the world's top 10 rolling stock manufactures now in Petards' customer list, with 4 of which have current projects with the Group (Stadler, Siemens, Great Western Railway and Hitachi Rail Europe Limited).

Post period, the Group also won a £1.0m contract from the Ministry of Defence and £0.5m from Leonardo MW (previously Agusta-Westland). The Group's order book at the period end increased by +20% to c.£24m, of which £8m is scheduled for delivery in the H2 FY2017 and £11m for FY2018, providing excellent visibility.

Petards ended the year with good cash position of £1.5m with no debt, after financing product development and projects from own resources. As such, the Board anticipates positive cash flows to return in Q3 and Q4 FY2018 as existing contracts progress to advanced phases.

The Share have increased by approximately +60% year-to-date, currently valued at FY2017E and FY2018E P/E multiples of 13.0x and 11.9x, having seen its shares fall back in May after its Chairman reduced its holdings (now 3.2% holder). In view of the continue positive progress along with a strong order book, Beaufort retains its Speculative Buy recommendation on the Shares.

[effortless cool] 13/9/2017 09:24

Header updated (for the last time).

[basem1] 13/9/2017 09:14

A balanced view bookbroker. I'm cautious but not quite as cautious as yourself. Is gold the way forward, I'm big into AAZ. Newsflow just gets better and better there.

[bookbroker] 12/9/2017 10:46

Truffle - ur remark should apply to the whole market, we are being propped up by the US and Far Eastern markets, no company incl. mega caps is now immune to seeing a fall in earnings at these levels, the consumer in the UK is screwed, apart from the the great and good who actually do little to support the pubs, clubs and high street names. They buy out of necessity, it is the ones on the breadline who are happy to run up large debts, but now they are done! We see that in the recent reports from MAB, GNK, etc.; Spoon's is doing ok for now, I hasten to add, but the restaurant sector is struggling proper.
Going back to the main point, I would be loathe to risk capital now, dividends are under threat and balance sheets are stretched, although there is likely to be no threat of rate rises, the economy just will not take it, but profits warnings seem to abound right now, and I cannot see the pressure easing.
Petard's relies on longer term contracts, and from transport essentially, but these are reliable even if they are having to currently build up inventory to fulfil the contracts, they'll see a material benefit as the deliveries are made, personally I think they are undervalued, EI. has a point about margins, but that is temporary, the order book is about as full as they can manage being a small manufacturing concern, should be higher, not lower!

[qs99] 12/9/2017 10:10

Well with the EV EBITDA ration falling value will IMO out in the end but yes frustrating!

[truffle] 12/9/2017 09:53

I simply repeat what I said in posts 948 and 1004
There is nothing here to convince me to re-invest

[rivaldo] 12/9/2017 09:29

WHI say Buy today, with a 42p price target.

They see 2.12p EPS this year rising to 2.31p EPS next year. That's a forward fully diluted P/E of only 11.7 now, and an adjusted EV/EBITDA of less than 6.

They point out that the order book has increased by 20% to £24m since the start of the year, giving excellent forward visibility.

[effortless cool] 12/9/2017 09:18

Mediocre results, with the promise of lower margins in H2. The fall in the share price this morning is not surprising.