Plastics Capital Share Discussion Threads

[stegrego] 29/6/2010 08:00

Looks decent enough results - 8p eps = p/e less than 4.

Outlook is ok.

[davidosh] 17/5/2010 16:01

Just watch out for after the event to see if there are any postings. Sometimes there is discussion. I rarely have time to do much more than arrange all these events and manage my portfolio and kids I am afraid.

[electronica] 17/5/2010 14:44

David

Thanks for posting that. It's a bit too short notice for me otherwise I would have been there.

Any chance that you can persuade someone to post a synopsis of the points covered by Faisal?

[davidosh] 17/5/2010 14:00

If anyone wants to meet the CEO tonight at a presentation and a dinner afterwards...

[glennborthwick] 27/4/2010 11:05

still think this is worth a punt. Dolalr at 1.54 is well below last years rate. Euro weakening though.

[egoi] 26/4/2010 15:33

Received this from UK-Analyst today.

Plastics Capital: positive Trading Update; Target price of 50.3p and remains BUY

Plastics Capital, the AIM quoted 'private equity' type consolidator of plastics products manufacturers released a positive end of year trading update this morning.

The Company confirmed that sales ended the year strongly and that order books are running at '...significantly higher levels than the average experienced over the last year. Export markets have strengthened,...' This is in line with our initiation of coverage note of 8 February 2010 as are the comments about satisfactory margin, improving cash generation and debt reduction. Consequently, we are not changing our expectations although for clarity of underlying trend purposes, we are representing pre-tax profit and earnings per share on a 'before amortisation, exceptional items and unrealised foreign exchange/derivative gains and losses' basis.


The steadily improving trend in forward order books due to an improving global economy together with targeted export development initiatives reaffirms our earlier confidence for a resumption of sales revenue growth in the current financial year. Pre-tax profit and earnings per share should advance at a faster rate because of improved productivity and lower financing costs due to debt reduction and low interest rates.


With the shares trading at 29.5p, the market capitalisation is GBP7.94 million but the Enterprise Value is GBP27.54 million (net debt as of 31 March 2009) or 5.4 times FY2009's EBITDA of GBP5.13 million. It is our expectation that by the end of the financial year to 31 March 2011, net debt will have declined to GBP14.03 million and that if the shares traded on the same EV/EBITDA multiple, based on 2011 forecasts, the share price will be 50.3p.


However, we do not consider an EV/EBITDA multiple of 5.4 times demanding and if Plastics Capital continues to deliver steady growth in sales and profits as well as demonstrating its ability to pay down debt at a rapid rate then the shares could readily command a higher multiple. Therefore, we re-iterate our recommendation of BUY

[davidosh] 26/4/2010 12:56

Stegrego...How can I email you ?

[stegrego] 26/4/2010 12:43

Hoodless B

Plastics Capital (PLA, 29.5p, £7.95m), the niche plastics group and expects the FY to 31 March 2010 to be in line with expectations. The company cites continued improved trading with sales ending the year strongly and order books significantly higher levels than average levels last year. While the UK is flat export markets have improved with business development activity ramped up in key markets. Profit margins are 'satisfactory; and cash flow generation is strong with net debt reduced as planned. The group anticipates good growth over the medium term. The stock is cheap in terms of P/E multiple though debt is high albeit serviceable. We maintain our buy and 49p price target which suggests only a 6.6x rating or the year just ended. BUY

[kimboy2] 26/4/2010 08:45

David you seem to get everywhere !

PLA is clearly cheap if everything goes well but the recent loan indicates that they can't afford a slip up. They said in the interims;

During the half year, all banking covenants have been met and with the exception of the debt leverage covenant, all with good headroom. The debt leverage covenant has been tighter, primarily due to the currency volatility described above, which has caused the value of our foreign currency debt to move inconsistently when "marked to market" into sterling as required by IFRS. We anticipate performance against this covenant will improve as debt is paid down and volume recovery continues. The unrealised translation losses also have the disadvantage of making our statutory Income Statements volatile as large loan translation gains and losses can apply to any period, causing a distraction from the underlying operational performance; consequently we are actively exploring the possibility of converting all loans into sterling.

Any idea how the debt leverage is calculated ?

[davidosh] 26/4/2010 08:24

I managed to get to the PLA stand at the show. It looked very professional compared to some of the others with products actually on show but unfortunately Faisal the CEO could not make it due to volcanic disruption and he was in Cape Town.....not a bad place to be stuck !

Anyway the non exec director Mr Vessey was there and I mainly asked about the debt levels and recent loan by the directors of which he was one who took part. He said it had to be done that way due to banking covenants that would have been breached otherwise which is obviously a problem with the debt so high and that must be a priority to reduce. I guess many will stay clear until that happens in this environment and that is the reason for the dramatic fall off in share price Emergency loans like that are not seen as a positive but good to see the non exec helping out.

[sivadnoj] 26/4/2010 07:23

Yes. I'm tempted myself. Certainly looks as if things are picking up.

[electronica] 26/4/2010 07:08

Sivadnoj

I could not get there due to illness.

We do, however, have some sort of steer from today's IMS.

The key phrase is "cash flow generation is strong and debt is being reduced in line with expectations"

That's almost enough for me to go ahead with a top-up

[sivadnoj] 25/4/2010 22:15

Did anyone meet management at Master Investor this weekend? I would be grateful for any feedback.

[ls lowry] 23/4/2010 13:13

My mistake sorry however the reduction is very small.

[sivadnoj] 23/4/2010 13:06

Lowry - don't be obtuse.

From the interims:

31/3/09

Cash 407k
Interest bearing loans (Current) 3,556k
Interest bearing loans (non-current) 16,444k

Total net debt £19,593k

30/9/09

Cash 771k
Interest bearing loans (Current) 3,562k
Interest bearing loans (Non current) 15,376k

Total net debt £18,167k


"Of significance is our net debt which has reduced by £1.5m during the first half year. Cash flow has been strong and we have also incurred a small unrealised translation gain on our euro denominated debt."

[ls lowry] 23/4/2010 12:53

I had a look at debt at interims and it went up to £18 million not down. The level of debt is too much of a concern to me.

[stegrego] 23/4/2010 12:34

Hi,

No im not going, but hope some people quiz them and report back.

[stegrego] 22/4/2010 23:55

I stuck in a limit order (s) a penny below. Interestingly, i could sell all of the first batch online after purchase but had to go to market to get a quote to buy any more shares.

The debt is indeed the biggest putoff, but the pound is actually stronger against the euro than for some time.

The company is however looking at converting all its debt into pounds.

Its a risky company and thats why ive only took a punt sized position here.

Risk / reward looks favourable proving the banks stay onside.

This level is an all time low and i dont see why, as debt is being paid off and serviced. EPS was 4.5p in H1 so they are pontentially on a 3-4 p/e.

[ls lowry] 22/4/2010 23:14

I have looked at these in detail Stagrego. As a matter of interest how did you do the deal I did a dummy run and limits below 2,000 shares on line.

I dont like the £18 million of debt and with the debt in euros it climbs on sterling weakness. The bebts the biggest put off. The danger to me is if interest rates climb. The loan by company directors recently hints at bank concerns.

[stegrego] 22/4/2010 22:14

Bought a few of these today at what i thought was a good price of 28p.

However, shortly afterwards i can now sell them for 23p...!

Hoping for 60p within 12 mths

[sivadnoj] 21/4/2010 14:16

We should be getting a trading update in the next few days if last year's pattern is followed.