Spectra Systems Share Discussion Threads

[tilly99] 06/9/2017 10:43

Good to meet you simsoSo you think we will do 2.6m in second half? That would shock meAgreed that trubrand is now in for nothing and the aeris promises have hurt Nabil s pride He seemed a bit dejected but maybe this was due to jet lag/fatigue or guilt over the timing of his options awards!!!Amazing that I invested here mainly cos of aeris and that looks like being worthless but now all the other areas look like they are firing on all cylinders !!If trubrand reaches its full potential it could be worth uoto 200p on the share price Trading range of 90p to 120p until we get news imo

[simso] 06/9/2017 10:36

I was also at the meeting yesterday.
My sense is that Nabil has learned from the Aeris disappointment, and we are now in a cycle of setting very low expectations and then beating them considerably...an under -promise and over deliver.
The new WHI forecast of $2.8m PBT for FY17 looks almost ridiculously conservative in my view. The first half has delivered $2.4m, leaving only $0.4m required for H2. Looking back to 2H 16, SPSY delivered £1.5m, and in 2H 2015 they delivered $0.8m. Back in 2015 it was a very different business, with outsourced production at much lower % margins, and a higher cost base.
I think an outturn EBITDA of c$5m is a more realistic aspiration, which converts to an EV/EBITDA below 10*, and at that level the valuation would be well underpinned already before Trubrand or any of the other irons in the fire.
I would still add to my holding here on any weakness in price, and also confirm I enjoyed 4 of the chicken sandwiches and was remarkably self disciplined with the crisps.

[pj 1] 06/9/2017 09:06

Is there such a thing as a 'bad' free sandwich?

Many thanks to those attending and the feedback.

[tilly99] 06/9/2017 08:23

Thanks very much HarrogateWere you at the meeting yday?I will ask re the size of the tax losses

[harrogate] 06/9/2017 07:49

I am sure that they will have minimum inventory holding requirements for their bank materials at all times under the terms of the contract. Yes high in terms of sales but not high relative to historic levels. I am sure that they have tax losses to carry forward for a while yet but yes that will run out at some time - US tax losses not as generous in terms of carry forward as UK tax losses.

[tilly99] 06/9/2017 07:46

$3.4m VS 7m sales is pretty high Also tax rate is low..how long before this mean reverts?One line did make me chuckle"If it doesn't work we will just have to invent something else": )

[harrogate] 06/9/2017 07:40

Not sure inventory was very high - it was $500k higher than last June when sales were lower. I don't know but it must be likely that as they shipped a lot of material in H1 they manufactured more for future delivery to make the production process more efficient.

[tilly99] 06/9/2017 07:35

Anyone an explanation for the v high inventory number?

[tilly99] 06/9/2017 06:58

Phew!! They looked good but not many eating them so I did wonder!Agreed we will beat as was surprised by the low forecast!!

[horndean eagle] 05/9/2017 23:22

sandwiches were terrible. you did well eating beforehand!

fwiw the company have been keen for forecasts to be conservative. they don't factorin any success on trubrand etc. Nabil seemed very bullish on tobacco but as has been pointed out he has been bullish about Aeris and that didn't develop as planned. Still he has various irons in the fire. any of which could provide a useful bump to numbers. Still think results will be ahead of forecasts again.

[junior21] 05/9/2017 23:07

Sorry you're right in terms of possible transformative news, but still a couple of things like patents and polymer bank notes agreement to keep us ticking over until then.

[tilly99] 05/9/2017 20:59

I thought the opposite junior!!More like second half next yearNot sure much in v short term

[junior21] 05/9/2017 20:34

Thanks for the feedback from the meeting. It looks like there could be decent news flow over the second half of the year to support the share price.

[tilly99] 05/9/2017 16:02

FftOnly question I had but time ran out was why the inventory number was so high?

[tilly99] 05/9/2017 15:59

Totally agree fft

[fft] 05/9/2017 15:56

Even without Trubrand, I thought there was enough going on with India, G7 bank detection standardization (USA to spend $700-800m on new hardware !), increased margins from inhouse production, planned increase in dividend next year etc. I think the standard work - which is increasing apart from a blip for the next 6 months - supports the current price and also supports the dividend payout.

[tilly99] 05/9/2017 15:48

FftAgree with what you sayNabil was uber bullish years ago on aeris but hasn't been a success so farIf trubrand is a success we will fly So imho if you believe in trubrand but the shares..if not I wouldn't touch them

[tilly99] 05/9/2017 15:40

Great questions sirThere were 3 from Ireland and about 7 investors Didn't eat as ate beforehand but food looked good!!

[fft] 05/9/2017 15:33

BTW,

How many were in the meeting ? I don't recall WHI having big offices. And what was the food like ? :-) What I miss is a chat after the meetings to see what others think.

[fft] 05/9/2017 15:23

I was. But doesn't begin with R.

I thought it was interesting re. Trubrand. CNTC control 98% of tobacco production, through hundreds of brands and manufacturing companies. They make about 2.4 trillion cigarettes a year - about 44% of world production. So, having a company inside CNTC trying TruBrand is great. If it works and revenue for CNTC and central govt increases, CNTC will probably insist it rolls out across China. The company outside CNTC was also interesting as it appears to be a premium brand and subject to high rates of counterfeiting.

In 2002-2012 Cigarettes accounted for about 7%-10% of Chinese Govt revenue. With an estimated 400m counterfeit cigarretes a year that is more than 0.5% govt revenue a year being lost.

[tilly99] 05/9/2017 15:16

FftWere you the guy asking about trubrand and tobacco? Name begins with R?

[fft] 05/9/2017 15:02

I was at the 12.30 lunch meeting (dialling in). Oussama - ex director with 8% - dialled in.

Lots of things going on - not just Trubrand. SPSY are growing in other areas and the amount of G7 business with standardisation of banknote sensors/detection could be very exciting. And not forgetting India who now have there temporary notes, but will at some point in the near future have new permanent notes.

[tilly99] 05/9/2017 14:56

Hi guys Not going into much detail as on a train at momentI felt the meeting went well and for me the share price is a true reflection of where we areIf you think Trubrand or Aeris has decent prospects then buy the shares as the upside is still substantial Trubrand could be worth upto 200p on the share pricePersonally I have no major hopes for aeris but trubrand has a good (maybe 75 pct) chance of success(not necessarily as much as 200p)So buy spsy on a dull day There were other posters at the meeting so they will expand in sure plus give their own opinions

[nurdin] 05/9/2017 09:10

Yes thanks harrogate..had missed that

[harrogate] 05/9/2017 08:59

The H1 results flag that 2017 will be heavily H1 weighted due to one off large phosphor sales so hence the level of conservatism in the WHI note - But I agree they should beat that.