Porvair Share Discussion Threads

[partridge1948] 22/9/2020 18:46

Thanks vprt. I do subscribe to Stockopedia and have not checked Paul Scott's maths, but I was expecting a sharp decline in Q3 revenues, so suspect he is not far from the truth. Quality business, but sidelines probably the best place at the moment, until aviation market in particular shows signs of recovery.

[vprt] 22/9/2020 16:57

Thanks for the comment partridge1948. If you are a Stockopedia subscriber I suggest you read Paul Scott's piece on this in the SCVR today. I am not going to copy and paste it here, but one point is that given the actual 1H numbers, using 9 months YTD seems to try to camouflage poor Q3 revenues; his rough estimate is sales down ca 12% on Q3 last year.

The lack of quantification or comment on profit or performance relative to expectations makes it a not particularly helpful update. I remain on the sidelines, expecting aviation exposure to remain painful also in 2021.

[partridge1948] 22/9/2020 14:50

Nine month trading update short on detail, but not the disaster it might have been. Weakness in aviation and industrial partially offset by "Orders in the Laboratory Division for the balance of 2020 and into 2021 are sharply higher". Cost cutting will hopefully mean strong profit recovery if aviation/industrial does pick up in 2021.

[gleach23] 17/8/2020 12:41

Thanks partridge - interesting post. I still hold some phtm!

[partridge1948] 17/8/2020 12:18

Thanks for your kind comments. vprt - I think you are right to wait and see for the moment. Washbear - I like small/medium sized companies, preferably with significant director holdings, which generate cash and ideally have little or no debt. I tend to hold for many years, occasionally top slicing (or adding in period of weakness). Top five holdings have all been held for at least ten years, thankfully all in ISA, and are Treatt, Porvair,Learning Technologies, Anpario and RWS. I particularly like ANP at the moment and added more recently. Next tranche is Marshalls, James Latham, James Halstead, Halma and Croda (the latter two were much smaller when I first invested many years ago, but now in FTSE 100!) Big disadvantage is that if I wanted to sell all of any one company in the top five in one hit, it would be almost impossible. Spread on LTG and RWS is not bad, but PRV and ANP in particular are not heavily traded and spread can be very offputting if you have anything other than long term view. Fingers crossed for possible takeovers. I do get some wrong - held Photo-Me and Lloyds Bank for many years!

[vprt] 17/8/2020 10:36

Thanks, Partridge, that is very helpful. Releases of warranty provisions are of course good news (or rather, absence of bad), but perhaps can best be seen as "really" belonging to previous reporting periods when those sales were made, rather than being representative of the very latest trading performance. Good luck holding, I will watch the upcoming turbulence from the sidelines for now.

Washbear, agreed. Click on the username and "posts", then you can see that Partridge's good taste in companies includes Anpario (currently my own #1 holding) and others.

[washbear] 16/8/2020 20:10

Any comments please on the massive spread

[washbear] 16/8/2020 20:07

An excellant post ! Can I ask Partridge where else you post please !I wish more bullentins were as informative...

[partridge1948] 16/8/2020 10:48

vprt - Porvair has been a big holding for me for over 10 years and done me very well from the occasional sale, but it must be suffering at present. Approx half the revenues and even more of the profits are from the aerospace and industrial division, incorporating the struggling aviation and automotive sectors. Half year results to end of May included a couple of months of lockdown and were in my view surprisingly good, but share price has slid from over 780p end of January. Half year profits helped by release of some of the warranty provisions on several large gasification projects in the Far East - these have been profitable and continue to provide revenues from supply of spares as the projects mature. There are still some more provisions which might hopefully be released over the coming year or two to help offset lower revenues. Their foray into China is on the metal melt side and indication at the half year was that this is now moving into profit at last.No spares sales likely in the second half and I await the full year results with some unease. Difficult to know if fall in price last few months has now discounted this. Possible upside is that their expertise in filtration may find some more outlets in provision of product for fighting covid 19 - a small amount in the first half. The management has been of high quality, albeit rewarding themselves well and they have signalled that action will be taken as/when recessionary conditions affect them. Always thought that as a small,high quality engineer they might fall prey to US predator and I am happy to hold for the medium term, but short term might be bumpy! Always dyor.

[vprt] 14/8/2020 11:42

Yes, the evaporation of demand and massive cuts in aerospace (e.g. look at RR and BA) must have big implications for the supply chain including Porvair. I have it on my watchlist, but reluctant to buy until that grim reality hits the guidance or results.

Also there was some movement in provisions that I don't fully understand (or trust), and I still have more research to do to get comfortable with the company overall.

I would be interested in info/views as to the mix of revenues and GM to aerospace + also to new projects vs. aftermarket. (Although both might be hit by the crisis).

[rangor] 14/8/2020 09:10

I'm guessing the negatives at the moment for PRV are exposure to the aviation industry, and connection with China. Both impacting the share price
Personally I think this company is run extremely well and will continue to grow.

[baldy45] 12/8/2020 17:13

I have held this company from when they were sub £1. Am having trouble understanding what is going on at the moment.

Interims in July were positive even though they were issued during the height of the lock down.

It has been a steady drop over the last couple of months. Day trading has been swings of 6 to 8% in stock price with the end of trading price at the same or lower than the start. According to ADVFN trade numbers today there were 47K buys against 9K sells and still the price goes down, what is going on?

[partridge1948] 01/7/2020 13:57

Decent half year numbers to 31st May, produced in just under one month suggests good systems in place. Release of certain provisions enabled write down of Chinese assets. With exposure to aerospace and automotive sectors, they may need to be able to release further warranty provisions in second half to maintain profitability, but maintained (modest) dividend perhaps a sign of cautious optimism. I have held for over 10 years and hold management in high regard.

[sharesoc] 26/4/2020 10:59

There is a detailed report on Porvair's recent AGM which can be found in our members area here:

To access the report, you'll need to be a full member of ShareSoc, which is a not-for-profit organisation that supports individual shareholders and campaigns for shareholder rights. If you're not already a member you can join here:

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[partridge1948] 18/2/2020 14:50

A little under half the shares sold by the two Exec Directors as a result of exercising options under Long Term Share Plan (and they have certainly delivered over the last ten years, so no complaints from me about them getting extra reward) but still rather disappointing as they are not substantial holders - about 2.4% between them.

[leading] 18/2/2020 12:06

Now the directors sell £2m of shares.

Anybody read "Signals" by Pippa Malmgren?

[gilesy] 05/2/2020 09:48

leading - a very sensible post
I concur with your analysis
not a holder as the high p/e is offputting plus the excessive management renumeration

[leading] 04/2/2020 14:58

I am out. The share price has had a great run, but looks toppy to me.

Trailing P/E of 32 feels high to me, though it doesn't seem out of line with the sector. Yield of 0.64% at these elevated prices is modest. I am not sure the steady but unspectacular growth justifies such a high rating.

I also have concerns about the results and the spin management are putting on them. Its all about steady as she goes, we haven't changed our approach since 2004 etc. and sounds complacent.

Specifically, they have problems in China. This operation is taking forever to get going and has been and continues to be serially loss making. Apparently it is based in Wuhan and is currently closed down, so I guess at least another couple of years until profitability may be reached here.

Also, what is going on with the gasification projects? These are being commissioned, a process which is going to take several years according to the company, which sounds a bit odd. I don't think these projects are working properly yet or that the company has a solution and there may be more bad news to come.

Look at note 13. Contingent liabilities. The company provided a performance bond for $930,000 which was called in December 2019 (after the year end). i.e. PRV did not perform and their bank have had to pay this amount to the customer. PRV will have indemnified and will therefore have a cash outflow for this item right at the start of the current financial year. That's not so pretty.

The note goes on to say that the maximum unprovided exposure relating to the gasification projects is £11.5m. That's a year's worth of profits for the company. Yes, its only a contingent liability, but we know there are problems here. Perhaps they could have provided some more clarity on this matter rather than hiding it in the notes. They also refer to note 9, so lets have a look at that.

Note 9 Provisions. There is an opening warranty provision of £506k. Next item is "Recognised on adoption of IFRS 15" a charge of £8,187k. To which you are meant to say, oh that's just the effect of a new IFRS, nothing to see here. Not so fast. Look at note 15, near the end. The warranty provision would have increased under the old accounting treatment from £506k to £6,609k. The remaining £2,917k only is attributable to IFRS 15. So, the company has identified and charged to P&L £6.1m worth of problems in the year. They have done well to hide it! No doubt that explains the dreadful margin performance in the industrial division which barely receives any comment.

So, maybe I have misinterpreted or misunderstood things in the results announcement, but I am here to be shot down. I have concerns with these results and that is why I have sold my holding today in anticipation of buying back at a lower price when there is more clarity on the issues above.

[tratante] 03/2/2020 10:08

Another set of excellent results from prv. What a well run company looks like. Despite getting little attention on these boards, it clearly has a lot of future opportunities given it's excellent environmental credentials.

[lageraemia] 15/1/2020 14:26

Hello? £7 to £8 in a flash?

[battlebus2] 03/1/2020 09:11

Through &7 this morning

[partridge1948] 02/1/2020 18:03

Steady rise since the TU, albeit on modest volumes.Results due 3rd February.

[partridge1948] 05/12/2019 10:06

Short and sweet pre close trading update today. PRV imo continues to under promise and over deliver.