Punch Graphix Share Discussion Threads

[tole] 05/9/2006 09:50

Just to let you know I received the Altium write up today - just a brief summary reiterating the 160p price target.

They expect the interims scheduled for 28th Sept to both reassure and impress investors - believing that following on from the positive AGM statement and trading update earlier this year PGX is making progress in all areas of its business and on target for expectations for the full year.

Also expecting the new CEO to give more detail on his view of the potential for Punch - and is anticipated that as his first opportunity the outcome will be positive.

The note also reiterates that the shares continue to be SIGNIFICANTLY UNDERRATED - and that the results and presentations from the CEO on strategies and objectives should be the catalyst to a strong share price performance for PGX.

Share Price 106p.
2006E
T/0 120.3
Adj PBT 14.7
Adj EPS 10.3
PER 10.2
DIV 3.0

2007E
T/O 131.2
Adj PBT 16.3
Adj EPS 11.0
PER 9.6
DIV 3.2

[glasshalfull] 05/9/2006 09:31

Thanks Tole....was quite lonely over here.

SirLurkalots post - referenced in the heading - showed the anomaly in valuation of PGX in comparison to the likes of Xaar and Domino. Given their track record I'd agree that a PER in the mid teens was applicable, especially as they are operating in growth markets whereas the likes of Dominos are maturing.


Regards
GHF

[tole] 05/9/2006 08:48

Hi GHF - Good timing here - as you say must be looking to regain some of its lost ground over the coming weeks.

Interesting to look at this one in comparison with Domino Print DNO trading on a 2006E PER of 16.36 and 2007E per of 15

As you mention PGX who have stated trading is all in line and with results due in the coming weeks is currently trading on a 2006E PER of ONLY 10.17 and 2007E PER of 9.35.

Also as pointed out both Teathers and Altium have a strong buy recommendation on this stock and coincidentally ALTIUM put a reiterated BUY rec out last friday with a price target of 160p

Gotta offer good value at this level.

Level 2 moving today with those few buys - currently 5v1

[glasshalfull] 05/9/2006 08:29

A further small tick up this morning hopefully confirms that they have bottomed and will begin to regain some of their 30% fall on the run up to results - on what appeared to be general market weakness.

Regards
GHF

[glasshalfull] 04/9/2006 21:43

Following on from post6 - It would appear that the printing hardware market continues to growth as evidenced by Hewlet packards Q3 results announced on 16th August 2006.



extract: -

"Imaging and Printing Group

Imaging and Printing Group (IPG) revenue grew 5% year-over-year to $6.2 billion. On a year-over-year basis, supplies revenue grew 9%, commercial hardware revenue grew 3% and consumer hardware revenue declined 3%. Printer unit shipments increased 15% year-over-year, with consumer printer hardware units up 13% and commercial printer hardware units up 23%. Momentum in key growth initiatives continued, with All-in-One unit shipments up 17% year-over-year, color laser printer shipments up 70% and printer-based MFP shipments up 196%. HP Indigo Press printed page volume grew 37% over the prior year period. Operating profit was $884 million, or 14.2% of revenue, up from a profit of $771 million, or 13.0% of revenue, in the prior year period."


regards
GHF

[glasshalfull] 04/9/2006 21:28

Competitor analysis: -

Xeikon which accounts for two thirds of revenues is one of 4 major players in its respective niche market.

Within the high-end niche, HP Indigo has the largest share of the market, accounting for 56%.
Xeikon claims a 33% share, Kodak 8% and Xerox 3%.
(source. T&G Broker note dated January 2006)

Management believes Xeikon's share could increase given the competitive edge of the 5000 product in particular in the variable data and industrial markets.
The US is the largest and fastest-growing market for digital high-end products, and Xeikon only has a 7% market share. However, management is focusing particular effort on its US salesforce in the Direct Marketing and Print on Demand sectors in order to enhance this.
In Europe, the focus is more on the fulfilment sector for future growth.

Three main end-markets:
1) Document printing
2) Industrial printing
3) Commercial Printing

[glasshalfull] 03/9/2006 22:35

The Pre-press division has a long term OEM hardware agreement with Agfa for the manufacture of Computer to plate machines (CTP).

Agfa's most recent results covering Q2 were released on 24th August 2006 and read positively in respect of the Graphics division: -



"Agfa continues to strengthen its technological leadership in prepress. At the Ipex exhibition in Birmingham (UK), Graphics offered a preview of an innovative chemistry-free violet-laser plate for commercial and newspaper printers. The Grafitalia trade show held in May in Milano (Italy) resulted in record sales, including 28 computer-to-plate (CtP) systems."


Regards
GHF

[Abuse team] 03/9/2006 21:43

Post removed by ADVFN

[Abuse team] 03/9/2006 21:33

Post removed by ADVFN

[glasshalfull] 03/9/2006 21:32

Forgot to mention that the interims will be released on the 28th September 2006.

Regards
GHF

[glasshalfull] 03/9/2006 21:14

I was surprised that there doesn't appear to be a thread covering this stock which listed on AIM during May 2005 at 98p - Market cap approx £107m at 104p.

It operates in 2 niche markets at the present time, namely the digital print press market through XEIKON (65% of revenues FY 2005) and the pre-press market through basysPRINT (35% of revenues FY 2005).

My attention was drawn to these through an excellent write up on T.M.F. by SirLurkalot prior to the FY 2005 results in March 2006.





At the time the price was circa. 130p and the results came in pretty much as expected.
Since then the company have released a positive AGM statement in May 2006 and another positive Pre-Close Trading Statement (referred to above) in July 2006.

They appear to be on an undemanding rating having fallen approx. 30% from their highs this year in line with many other AIM constituents.
I feel they offer good value at the current price and availed myself of a few as the "appeared" to come off the bottom last week.

I'd be interested in any other views.



Kind regards,
GHF

EDIT:- Placed in header for background info.

[glasshalfull] 03/9/2006 20:11

Synopsis from AIM Newsletter - August 2006: -

The digital pre-press printing systems group has issued a trading statement covering its results for the six month results to 30 June 2006. The positive start reported at the May AGM was maintained and the business performed in line with expectations. In pre-press solutions, overall trading was similar to the interim period during 2005, with the expected reduced margins from the long term OEM agreement with Agfa being offset by increased sales of basysPrint. In digital printing solutions, sales of both equipment and consumables showed encouraging growth.

Punch recently invested in the expansion of its sales and service organisations in the US, Brazil, Canada and China, in a new assembly plant in China, and in accelerated research programmes focused on the development of next generation machines. Overall trading and market trends are expected to continue in a positive vein for the rest of the year.

Comment

Punch has established niche positions within two of its chosen subsectors and now intends to muscle in on form and packaging-printing markets too. A strengthened balance sheet will support the ongoing international sales and marketing efforts, particularly into China. The ongoing streamlining and efficiency programmes reaffirms our confidence for the year ahead. A 2007 multiple of 9.3 is far from demanding and our stance remains. BUY.

Forecasts: -

Teather & Greenwood 07-04-06 BUY
Altium Securities 03-04-06 BUY

2006

T & G: - PTP £15.00m.....EPS 9.80p.....D/V 3.00p

ALTIUM: - PTP £14.70m....EPS 10.30p....D/V 3.00p

2007

T & G: - PTP £17.00m....EPS 11.30p....D/V 3.40p

ALTIUM: - PTP £16.30m....EPS 11.00p...D/V 3.20p


FY 2005 Results

Sales +46%
EBITDA +80%
Operating profit +58%
Profit before taxation +68%
Net profit (equity interests)+76%
EPS (Eurocents) +51%



Background Information

I was surprised to see that there doesn't appear to be a thread covering this stock which listed on AIM during May 2005 at 98p - Market cap approx £107m at the current market price of 104p.

It operates in 2 niche markets at the present time, namely the digital print press market through XEIKON (65% of revenues FY 2005) and the pre-press market through basysPRINT (35% of revenues FY 2005).

My attention was drawn to these through an excellent write up on T.M.F. by SirLurkalot prior to the FY 2005 results in March 2006.



At the time the price was circa. 130p and the results came in pretty much as expected.
Since then the company has released a positive AGM statement in May 2006,



and another positive Pre-Close Trading Statement in July 2006.



They look to be on an undemanding rating having fallen approx. 30% from their highs this year, in line with many other AIM constituents, but as yet have failed to enjoy the recovery that many of their peers have of late.
I feel they offer good value on a risk/reward basis at the current price, and availed myself of a few last week when they "appeared" to come off the bottom.

Interim results are due out on 28th September 2006 and should be good with the pre-close update confirming,

"Overall, trading conditions and market trends are expected to continue in a
positive vein for the reminder of the year. This, together with the benefits to
come from the ongoing streamlining and efficiency programmes, reaffirms the
Board's confidence in the outlook for the year and beyond."

I'd be interested in any views or discussion concerning the company.

GHF