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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Premier Farnell | PFL | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 185.00 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 185.00 |
| Top Posts |
|---|
Posted at 04/10/2016 16:49 by typo56 In case you're wondering about the large uncrossing volume tonight, PFL are promoted to the FTSE 250 tomorrow. |
Posted at 14/6/2016 19:40 by josephrobert Olivetree’s deal summary from FT Alphaville:Given the presence of activists on the register, and the general underperformance of Premier Farnell stock, the market has often speculated as to a creative outcome for the company. One of the more popular ideas in the last couple of years has been a merger with Electrocomponents (ECM LN). The latter established a new management team only last year, replacing a previous CEO who had run the company for 13 years, so there was hope that such developments could lubricate such a transaction. There were also calls for a break up of Premier Farnell, the pressure was to sell its Akron Brass fire-fighting subsidiary, perceived to be a poor fit with the larger electronics business. This sale was eventually announced in September last year and the details of the sale were confirmed in February 2016. Hence the next step for activists was likely to be consolidation with another industry player – something we are now seeing today. Datwyler has secured irrevocables from 18.5% of Premier Farnell’s register, from JO Hambro, Majedie and (activist) GO Investment Partners. These irrevocables generally release in the event of an offer from a third party that is only 5% better than the Datwyler offer (ie 173.25p). It is worth noting that Electrocomponents equity rating continues to look powerful relative to that of Premier Farnell, so a potential merger could continue to make sense. Rumours of such a transaction have never been far from the market, as recently as 9th October 2015 the press reported such speculation. The perception was generally that GO had taken its stake, post two profit warnings from Premier Farnell, in order to engineer such a tie-up. The industry backdrop continues to appear ripe for consolidation, so such a transaction cannot be entirely ruled out, especially given that Datwyler’s irrevocables are released so easily. With a current market cap of £1.2bn, Electrocomponents is much larger than Premier Farnell, although it is still smaller than Datwyler’s £1.7bn market cap. Electrocomponents RBC from FT Alphaville Our view: The 165p cash offer compares well with our previous 155p target and given weak trading, historic issues, management change and gross margin pressures, we feel this is a good price, although wouldn’t rule out a counterbid. We downgrade to Sector Perform and increase our target to 165p in line with the bid from Daetwyler. Key points: Recommended cash offer – Daetwyler has made a recommended cash offer at a 51% premium to last night’s close of 165p per share, which values the group at £792m. This compares to our prior DCF target price of 155p and equates to a calendar 2016E PE of 16x and EV/EBITA of 12x. Shareholders will also receive the 3.6p final dividend payable on 23 June. Management believes it can extract CHF50-70m (£37-51m) synergies from the deal (50% gross profit and 50% cost). Decent price – Given weak trading, the history of disappointments, management change, gross margin pressures, and the cycle – we see this as a good price. However, the valuation is below that of key peer Electrocomponents,(2 is a big number for a business that doesn’t have huge overlap, hence we would think that the synergy number for one of the closer peers e.g. Electrocomponents would be larger – indeed we have previously stated that we think £60m could be achieved by a combination with it, although the new management team has plenty on its plate with its own restructuring plans. Mouser and Digikey in the US also have good overlap and a strong dollar potentially to entice them. As such, despite this being a good price we wouldn’t rule out a counterbid. Q1 Trading weak – PFL has also put out a Q1 trading update – LFL growth was -1.4% down from +0.4% in Q4, with weakness in the UK (-7%) and USA (-9%) offset by Europe (+4.8%) and Asia (+26%). Cost savings do appear to be on track and management has initiated some restructuring in the USA. Downgrade to Sector Perform – Given our view that this is a fair price, we downgrade to Sector Perform and increase our target price to 165p, in line with the offer. This compares to our previous DCF derived target price of 155p. |
Posted at 18/4/2016 17:28 by duncan doughnut Of course the co did say at the interims:"The Group will target a sustainable and progressive dividend with cover of 1.5x to 2.0x" So the 11.1p eps forecast and the 6.1p divi forecast look very achievable and if there is recovery there's scope for a fair bit more perhaps. 6.1p would be more than 1.5 times covered, nearly 2 times covered in fact. |
Posted at 14/4/2016 18:24 by edmundshaw BEZ is one I know well. That historic yield is based on a last year's dividend of 28.3p at a share price of 335p. That includes a special dividend of 18.4p and a "normal" dividend of 9.9p. Around 3% yield plus whatever special they give - and the last three years have been good due to the state of the insurance market, there is no guarantee of perennial repetition.BP's dividend yield is in spite of a massive full year loss. If the oil price remains anything like this low that dividend is doomed within 3 years maximum. Laura Ashley is controlled from Malaysia via MUI. That may be fine, but for me the risk based on not knowing the major owner's personal goals there is toouncomfortable. Fenner's share price has fallen by 2/3rds in the last two years. The dividend is maintained though cover is quite low. Nevertheless, on an oil price recovery, and chinese recovery that looks an interesting play, but the yield is high for a reason: risk. I could go on. 5% is a good yield where risk is low. Whether that is the case here is of course another question... yer pays yer money.... |
Posted at 10/2/2016 17:43 by market sniper3 Long on PFL Premier Farnell, had my eye on the chart for a while.This article swayed me. Stockwatch: This share looks too cheap By Edmond Jackson | Tue, 9th February 2016 - 12:02 Stockwatch: This share looks too cheap Is there value in electronics distributor Premier Farnell (PFL), given the sale of just one division is fetching 40% of the group's near-£400 million market value? Or, is the de-rating prescient of a wider downturn ahead, with electronics distribution a significant indicator of the business cycle? It was expected to happen, but the US sale of Akron Brass, an Ohio-based fire-fighting equipment business for US $224 million (£155 million) in cash, represented nearly nine times operating profit. On those "attractive" terms, Premier's management can pursue "significant opportunities to improve the group's operational and financial performance", with a view to restoring profits growth in the financial year to 1 February 2017. As global economic indicators waver, the stockmarket is cautious to assume this scenario given a down-dip for Premier's latest financial year, and with the board yet to confirm the extent of a dividend cut. If a recession beckons, then this kind of stock can become a value trap - but if wider sentiment is overly bearish and fails to recognise the positive benefits of cheaper oil for economic demand, then it can recover in 2016. There are both technical and fundamental reasons why. Chart assumes 'saucer' profile The "saucer" is a technical pattern that, according to principle, indicates a stock's price is low and the downward trend has come to a close. In practice, I would not assume economic life accords with deterministic patterns - there is always a risk of force majeure taking over - but charts can be interesting to assess probabilities, especially when you consider fundamentals also. Premier's one-year chart largely accords with the theory, i.e. a sharp drop and "saucer" about three-quarters complete. Strict technicians might prefer more evidence of that, but it's certainly worth watching. Valued lower than major rival The one-year chart for £930 million peer Electrocomponents (ECM) shows far less de-rating, mainly due to a sharp recovery from 172p to 237p. That followed an early October trading update which affirmed that its largest business area, continental Europe, is doing well with 13% revenue growth. Premier is more exposed to difficult markets in North AmericaHowever, North America slipped 3% and Asia Pacific was flat. In its last financial year, Electrocomponents' revenue profile was 35% continental Europe, 29% UK and 24% North America, while Premier's was 46% Americas, 30% UK and 25% Europe and Asia Pacific. Premier's last trading statement on 17 December cited a 6.9% revenue drop in the Americas for its third quarter, offset by 14.9% growth in Asia Pacific and with Europe off just 0.5%. Group revenue edged up 0.5%, or 2.1% annualised. So, while Premier is more exposed to difficult markets in North America, and this likely explains much of the valuation differential, it's not altogether a bad story. Weighing valuations What's perturbing in a macro sense is the extent of drop happening in the Americas (excluding Brazil) despite a 13.6% advance in sales for the Akron Brass fire-fighting equipment business being sold. It exemplifies why stockmarkets are so edgy, after years of exceptional monetary stimulus in the US have apparently had little effect on its industrial base. And South America has its own problems, with low commodity prices and dollar-denominated debts. Only a worsening economic situation can explain why Premier trades on such a low 12-month PEBut, weighing the valuations, only a worsening economic situation can explain why Premier trades on a 12-month forward price/earnings (PE) multiple of about nine times with its stock currently about 102p. A prospective yield of near 6% is covered nearly twice by forecast earnings, and there's strong cash flow backing. By comparison, at 208p, Electrocomponents is on a PE near 16 times, yielding about 5.5% and covered just over once by forecast earnings. It will be interesting to see what Electrocomponents has to say in a trading update due this Wednesday, but, even allowing for some differences in the businesses, that's some valuation contrast. The Premier forecasts are recent, so should significantly factor in earnings due to be lost from the disposal which was first mooted last year. Balance sheets offer explanation Both these groups have made acquisitions i.e. have accumulated goodwill and intangibles. Premier's end-August 2015 balance sheet shows they represented 105% of £81.7 million net assets. At that point there were £59 million short-term financial liabilities and £229.4 million longer-term, hence Premier's recent gearing in the order of 335% versus 45% for Electrocomponents. It would be encouraging to see directors back Premier's improving underlying potential with share purchasesHowever, Premier's interim income statement showed net finance costs clipping barely 20% off operating profit, and the latest £155 million disposal will radically improve the balance sheet. So the market appears to be overlooking this, or could not anyway anticipate the sale proceeds when the stock was de-rating. A cash injection will improve Premier's risk profile and dividend security, in terms of circa 6.0p per share forecast for the full-year, which is consistent with a 40% cut in the interim dividend. Such a payout ought now to be supporting the stock, unless economies lurch lower. 'Buy' case improved I drew attention at 105p in September during the early stage of what now appears a "saucer", with the stock testing 92p amid January's sell-off. The Akron Brass deal deserves noting in this context, given the substantial proceeds. It would be more encouraging to see the directors back their claims as to Premier's improving underlying potential with share purchases - now they should be free of any restrictions around the disposal, although they may still apply with prelims only six weeks away. One is quite reminded of Home Retail Group (HOME), where the market's caution as to its trading outlook has led to a buyer - Sainsbury's (SBRY) - exploiting aspects of underlying value. Premier shares may remain pressured if markets continue to sell off, but if a deflationary scenario applies then it becomes more of a target for rivals seeking growth. For more information see their website. Premier Farnell - financial summary Consensus estimates Year ended 1 Feb 2011 2012 2013 2014 2015 2016 2017 13 months Turnover (£ million) 991 973 952 968 960 IFRS3 pre-tax profit (£m) 93.3 105 69 74.8 69.1 Normalised pre-tax profit (£m) 93.3 88.2 74.7 77 74 58.1 64.3 IFRS3 earnings/share (p) 18 20.9 13.2 13.9 12.8 Normalised earnings/share (p) 18 15.8 14.8 14.5 14.1 10.9 11.4 Earnings per share growth (%) 68.4 -12.4 -6.4 -1.8 -2.5 -22.9 4.6 Price/earnings multiple (x) 7.2 9.4 8.9 Cash flow/share (p) 15.6 18.4 20 12.9 13.3 Capex/share (p) 5.3 6 6 3.7 5.8 Dividend per share (p) 9.6 10.4 10.4 10.4 10.4 6 6 Yield (%) 10.3 5.9 5.9 Covered by earnings (x) 1.9 1.5 1.4 1.4 1.4 1.8 1.9 Net tangible assets per share (p) -5.6 1.8 0.9 3.7 -2.8 Source: Company REFS |
Posted at 10/2/2016 17:26 by eastbourne1982 Simon Templar QC,ECM tells us nothing, anyone expecting good growth from PFL in the short term is living in cloud cuckoo land, if decent growth was on the agenda don't you think the share price would be a lot lot higher ?? The market has priced very challenging trading conditions into PFL. If PFL achieved any growth at all in the next year I'd be delighted. You seem to be expecting the world from PFL yet you wouldn't pay the current valuation, all seems rather bizarre to me. |
Posted at 08/2/2016 12:46 by simon templar qc No comments from Kenche has he taken a quick profit and changed his mind about the future having reviewed the matter?The market is making its own mind up! The fact of the matter is there has been one dividend cut there will be another dividend cut and who knows more dividend cuts in order to see dividend cuts of 1.5 to 2 times cover. In the meanwhile PFL is now x growth with lower turnover short term and growth upside is reliant on macro economics. |
Posted at 06/2/2016 18:35 by simon templar qc Food for though from Royston Wild yahoo, which concurs with my view including dividend cut, view is earnings will fall about 18% and macro economics etc...Divestment news drives shares skywards "Electronics manufacturer Premier Farnell (LSE: PFL) also made the headlines after announcing the sale of its firefighting and emergency response unit Akron Brass for $224.2m. News of the divestment sent shares 6.6% higher from Thursday's close. In other news, Premier Farnell also advised that profits for the year to January 2016 should fall within its previous guidance of £73m to £77m. The divestment of Akron Brass will allow Premier Farnell to "pursue growth opportunities within the core electronics distribution business," it said, not to mention boosting profitability in the current period and cutting its debt pile. The number crunchers expect earnings to fall 18% in the year to January 2016, while a hefty dividend cut from 10.4p per share to 6.2p is currently pencilled-in. But a 3% earnings bounceback is predicted for the current period, leaving the business dealing on a mega-cheap P/E rating of 8.7 times. And another estimated 6.2p dividend creates a bumper 6% yield. However, as sales continue to deteriorate badly across its core European and North American markets, I believe investors should be cautious concerning current forecasts before piling into what is, conventionally-speak |
Posted at 05/2/2016 12:35 by simon templar qc Eastbourne,This is what they say about dividends... "* As announced on 17 September 2015, the Board's dividend policy is to target a dividend cover in the range of 1.5x to 2.0x; the Board intends to maintain this policy following the Disposal." Dividend was cut at interim and to be honest I think final will have to be cut if they seek to make sure its covered twice. |
Posted at 28/11/2015 14:14 by simon gordon Ennismore - November 2015:Premier Farnell is a distributor of electrical components, mostly selling to engineering and manufacturing companies in the UK and the US. The products it sells are typically used for research and development, which means they are ordered in low volume as and when they are needed. We spoke to several customers that all said they use Farnell because of its huge range of available stock and the strong service from their relationship managers. This service offering allows Farnell to charge higher prices, and its gross margins have averaged 40% over the last decade, which compares to the 10-15% gross margin that most high-volume distributors generate. Barriers to entry are high as stocking half a million items only works if you have scale. It’s a business model that has been successful for a long time: Farnell’s average pre-tax return on net operating assets is 20% over the last decade. However, a series of profit warnings this year has seen the share price halve. We believe the market has overreacted, and that Farnell is a classic case of a fallen angel. Internal and external factors have contributed to Farnell’s recent problems. Its former CEO, Laurence Bain, was overly focused on driving top-line growth at the expense of margins and returns – Farnell added stock and lowered prices – and in the end, it failed on all counts. Over the last two years, sales were flat, gross margins declined from 39% to 35%, and inventory turns fell from 2.7 to 2.3 times. We expect operating profit to fall by 20% for fiscal year 2016 (ends January 2016). The CEO left in August and the former CFO is now the interim CEO. On the external front, some customers have been switching away from the one-day delivery service that Farnell offers to cheaper three and four-day alternatives from competitors such as Mauser and Digi-key. We believe these external factors are a small part of the story and, regardless, solvable. Firstly, Electrocomponents, which has a similar one-day offering to Farnell, has performed much better. Secondly, Farnell is restructuring its distribution model so it can offer two to four day delivery options. We believe that these changes, combined with the appointment of a permanent CEO, will lead to a recovery in operating profit. We’re already seeing an improvement in stock turns and free cash flow, which increased from GBP 14m to GBP 42m in the first half of this year. We would also not be surprised if Electrocomponents acquired Farnell. It is rare for two businesses to overlap so directly and a tie-up would add significant value for shareholders. Premier Farnell has a market cap of GBP 375m, less than ten times our estimate for this year’s earnings. With net debt of GBP 235m and a pension deficit (tax adjusted) of GBP 45m, the enterprise value of GBP 655m is 8.5 times our estimate for this year’s operating profit. We believe this is the trough and that operating profit will increase once the company has proper leadership. Net debt, at three times operating profit, is too high but the company is selling its manufacturing division, Akron Brass, and announced a cut in the dividend. These actions should allow the company to reduce its debt to two times pro forma operating profit, while still paying out a dividend yield of c. 6%, covered 1.7 times. We expect the shares to re-rate once profitability stabilises or, more obviously, a deal with Electrocomponents emerges. Using a multiple of thirteen times net operating profit after tax, we see upside of 30% in twelve months’ time. |
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