Swallowfield Share Discussion Threads

[arthur_lame_stocks] 29/7/2019 00:21

rossco

I think you're wrong with your calculations. The drop in the brands business was only 3% accross the full year if I understand the TU correctly.

As an aside has anyone else noticed that three members of the board are to be paid over 500k from the disposal proceeds of the manufacturing business? Nice work if you can get it.

[kinwah] 16/7/2019 09:59

Rossco I think you are broadly right. The issue with the brands business is that on a product launch you get an initial sales boost when the distributors order but that is followed by a sales dip as the consumers use the product at home. Hopefully at a later stage the consumers purchase the product again and sales build. IDP is a good stock to look at for comparison as it faces the same issues of new products and shelf space. In fact SWL buying IDP could make sense as regards product fit.

[rossco] 15/7/2019 20:58

At the December half year Brands Revenue was 10.055m against 10.111m in the previous year.
In the year to June 2108 Brands Revenue was 17.116m so second half Revenue was 7.005m.
Today the company announced “ a single digit decline in the Brands business” for the full year to June 2019.
So if 17.116m fell by 9% to 15.575 that would mean the second half to June 2109 had revenue of 15.575 less 10.055 i.e. 5.525m compared with the second half to June 2018 of 17.116 less 10.055 i.e. 7.061.
So a fall from 7.061 to 5.525 is a drop of almost 22%.
That does not sound good.
Am I correct with my calculations?

[topvest] 15/7/2019 19:52

They are selling the more complicated bit of the business, so that's probably why they have gone.

[gopher] 15/7/2019 19:09

Not sure - If you receive a bid for a division which exceeds market cap then of course shares rises.

Finance Director and Sales and Marketing director depart with manufacturing business, so what is that saying about what remains

[gopher] 15/7/2019 19:09

Not sure - If you receive a bid for a division which exceeds market cap then of course shares rises.

Finance Director and Sales and Marketing director depart with manufacturing business, so what is that saying about what remains

[kinwah] 15/7/2019 13:47

Telbap is looking at the total liabilities which include the trade creditors. SWL retains the pension fund liabilities but hopefully won't be forced to pay in a lump sum. SWL will be well cashed up and will be on the acquisition trail if no-one buys it first.

[daz] 15/7/2019 13:02

Where do you get the £35m debt figure Telbab? The interim's show £6.8m, so they'll end up with a substantial amount of cash and the brand business.

[topvest] 15/7/2019 11:18

Seems like a very smart move. Well done the Board. Only hold indirectly through Western Selection myself.

[telbap] 15/7/2019 09:20

35 mill debt

[daz] 15/7/2019 07:47

The manufacturing business is being sold for more than the market cap, I'm surprised that the shares haven't moved even further ahead on the news.

[kinwah] 15/7/2019 07:28

Danny you got that spot on. They are sticking with the brands but selling the manufacturing business for more than the market cap. This will leave Swallowfield as a cash rich acquirer which can go out and pick up brands with long term growth potential. The shares look cheap and SWL could attract a bid bearing in mind what they paid for the brands originally.

[danny baker] 08/3/2019 01:12

Baner, I don't see that the brand strategy is in for a review. There is no doubt that so far it has been disappointing but it is a major plank of the company's strategy to move away from contract filling. I think they will look for further acquisitions of brands for the portfolio. The marketplace is looking very cluttered with no end of products on supermarket and chemist shelves. A bit of rationalisation in the industry would seem well overdue.

[gopher] 07/3/2019 22:34

Good post Banner my last post thought they would drift down but how far away are they from a share price bottom My thoughts are not so far but I would like to see a catalyst.

[baner] 05/3/2019 09:19

now 60% down from peak levels........it seems the brand strategy is in for a review. intangibles can quickly loose their values and require write offs that erode the equity capital. dangerous if you are geared, however swallowfield has a sound balance sheet. but no doubt this must be a big disappointment to what appears to be a highly competent BOD.

[countryman5] 12/1/2019 08:36

I see the HAWK has landed back on this BB.

[baner] 03/1/2019 13:33

down 50% from peak level! a falling knife?

[dh1706] 15/11/2018 22:00

Debt is still a major issue. When the tide goes out you see who are wearing the swim suits! They always talk the talk but let's see if they can walk the walk and finally deliver consistency!

[countryman5] 15/11/2018 16:56

AGM went well. We have a very smart executive team and I believe that the brands business is going to dominate the profit growth of this company. The contract / manufacturing side of the business is flexible and they are focusing on those sectors where they recognise that they have an advantage. The new CEO has great experience, including international brands. He believes that the SWL brands have great international appeal. They are expecting the debt to shrink fairly quickly.

[arthur_lame_stocks] 31/10/2018 10:46

These seem to be falling into value territory, i'll keep an eye on them.

Debt is a bit high though.

[danny baker] 26/10/2018 21:49

Not much in the RNS about these extra resolutions. I can't find the notice yet on SWL's awful investors website. My guess is either they have forgotten that to tick boxes for good corporate governance they need to put the remuneration policy to the vote or otherwise perhaps they have received member resolutions which they want to keep quiet about. I can't recall a similar RNS from any other company so it is most unusual and I'm intrigued.

[gopher] 26/9/2018 20:54

Surprised no comment on this BB to results which has been flagged in summer as slightly disappointing and so it proved

[countryman5] 11/8/2018 17:55

Roger McDowell, already a major shareholder and NED recently bought a substantial chunk. Positive article in this week’s Investors Chronicle.

[stocktrawler] 12/7/2018 15:44

Entirely agree with last two posts and think business will do well from here.