SWP Group Share Discussion Threads

[norbert colon] 05/11/2014 08:45

Yes kemche very positive indeed. ULVA looks to finally be reaching its potential with the new machine and GRP offering. the GRP product will be very positive as we understand the oil majors (or other customers) are looking for a lower cost alternative in some cases to the full ULVA shield offering. Reduced debt is great and hopefully most of the CAPEX for the further ULVA investment will come from the business rather than lease finance. Very happy and look forward to the AGM for a more detailed update.

[kemche] 05/11/2014 07:31

Excellent results and confident forward looking statement.

[norbert colon] 08/5/2014 11:58

Post 146......Note to self - read the annual report thoroughly....just seen that Chris Fleet held 6.79% on 31st Dec 2013. Seems he is reducing his holding - I assume due to recent strength in share price Another 1m trade went through after hours yesterday.

[trentendboy] 07/5/2014 13:52

spreadbetting is a slightly different game. It can be spreadex hedging a big move by a punter.

This is where it gets complicated with small caps.

Punter goes very long so spreadex need to cover - how would they do that? Going long may then be self-fulling.

[norbert colon] 07/5/2014 12:45

What I would like to know is why is the position only announced now as it's reduced and not when it first went above 3% or 5%?

Let's hope he's unwinding a short position but it's anyone's guess.

It certainly doesn't change anything for me and I remain a long term holder and am very positive about sales of ULVA this year and the business overall.

[somerset lad] 07/5/2014 12:09

I think they're reducing from 6% to 4.28%.

[trentendboy] 07/5/2014 11:46

Looks like someone has taken a massive spreadbet position with spreadex.

They are who I use. Interesting development.

Anyone know the person taking the position? I assume it is a bullish bet.

Hmmm. To follow them in? One suspects they know something.

[sammy_smith] 31/3/2014 12:12

LISTEN: SWP Group (SWP) - Half yearly results

Click here to listen

[trentendboy] 29/3/2014 11:51

Good post. Dividend policy looks fairly aggressive which is great. 15 is a little demanding but with debts down and a lot of problems overcome it could be a good growth story from here

[norbert colon] 27/3/2014 11:32

Yes, very pleased with these results and it will be great to see the FY dividend increase to say 0.0025p which would still be covered twice (by my calcs) and would mean a dividend (at my cost average) of around 3% which will be very nice.

It seems there is a lot of potential here and whilst on PE perspective they are not cheap (I think a PE of around 15 for 2015 by my draft estimates), they are otherwise still undervalued but over time I am looking for that to correct itself and in the interim the downside is limited and that is always of paramount importance especially given the current market sentiment.

Any investors interested in a trip to Telford to see the new ULVA machine? I am planning to speak to the BoD to see if such a visit could be arranged.

[trentendboy] 27/3/2014 09:23

Indeed - looking attractive at these prices

[spookies] 27/3/2014 09:18

Very good results. Company in a strong position.

[kemche] 26/3/2014 20:27

End of March nearly upon us and the price nudges up - how curious! Aherm.

[mjcrockett] 27/2/2014 10:49

Thanks from me too Norbert - a most comprehensive report.

[kemche] 26/2/2014 08:25

Thank you very much for the update Norbert.

[norbert colon] 25/2/2014 21:04

SWP Plc
Notes of AGM – 30th January 2014

AGM attended by: Alan Walker (Chariman), Colin Stott (MD), David Pett (FD), Martin Bell (NED), Alan Smith (NED) + around 10 others including myself (PIs etc)

Q. Given the recent departure of the MD of the Fullflow business, please update us on the status of finding a replacement?
A. Colin Stott noted that their last MD did not meet their high expectations. Finding a suitable candidate was proving very challenging and Colin and the BoD noted that their time was being absorbed in the Fullflow business when they should in fact be spending their time on ULVA etc.

Q. Please provide an update on the appointment of a sales team for the Middle East / Africa (MEA) region.
A. The BoD noted that they had not yet found a suitable candidate for this role but they were actively looking.

Q. Can the BoD clarify why there were real estate assets written down (£411k) in the Y/E 30th June 2013.
A. David Pett explained that this was just a revaluation of their property assets to reflect current valuations in-line with IAS.

Q. What % of the cost of the capital expenditure project (new ULVA machine) had been met by Group resources and what were the terms of the lease?
A. David Pett confirmed that 75% of the cost (circa £1.2m) had been paid by Group with the remainder being essentially a hire purchase but with a very quick pay-back period expected to be less than 3 years.

Q. Once specified, what % of ULVA projects turn into firm orders?
A. Alan confirmed their conversation rate was "pretty good" but with all things in the construction / O&G industry, nothing is a dead cert.

Q. What is the demand for the hard shell ULVA –GRP product that is being developed? Is it a lower cost alternative?
A. It was explained that a hard shell on the insulation is a preference by some clients, namely Shell DEP (Design and Engineering Practice) and in the LNG (Liquefied Natural Gas) arena. Hence they are providing clients with what they want (meeting demand). It is in fact a more expensive product than the conventional ULVA Shield and needs further investment by the business to ensure the final product is robust.

Q. Who are the major competitors for ULVA?
A. It was explained that there are some competitors, namely suppliers of nitrile rubber insulation who now also provide a coating system similar to ULVA Shield although it was noted that the ULVA product is superior. There is also a supplier of GRP coatings whom the BoD stated they had entered discussions with in respect to acquiring them but the owners pulled out and this was not taken any further.

Other general notes which I made under each business:

Crescent

• David Pett was introduced as the new man at the helm of Crescent
• After a prolonged period of cost cutting, they are currently recruiting to meet demand.
• Historically they have not specifically targeted London as a seam of new work / orders but this was now a focus are given the potential and buoyant housing market.
• They have recently secured an order for a £500k helical staircase for the office of a Hedge Fund although it was noted that these don't come along often. This is equivalent to 36% of 2013 revenue!
• David noted that they are talking to architects to try and secure further orders and build on their reputation.
• A standard spiral staircase typically costs £10-15k. A specialist or helical staircase typically costs £60-70k.
• The BoD have no current intention to sell the Crescent business.

ULVA

• Oil and gas market is busy / buoyant.
• They currently don't have enough projects to smooth out revenues and efficiencies. Typical gestation period for ULVA (specification to installation) is 5 years.
• They have broken into a new market (LNG) and this has lots of potential.
• Good progress had been made in the USA and Scott Sinclair (USA Sales Manager) was praised very highly for his hard work. Scott had recently secured an order for a Naval Vessel which is again a new market for SWP/ULVA.
• India and Russia (O&G) were seen as markets with lots of potential but this needs the right sales team and the MEA area (see Q&A) was already proving challenging in respect to resources.
• They have one project in China but this again is a target area.
• The new ULVA 'machine' in Telford is being installed in February 2014 and will be commissioned in March 2014. The complete operation is on time and budget. The BoD noted that this machine will create huge cost efficiencies / savings and a specific point of interest was the high proportion of waste material from the manufacturing process (previously discarded) that will be saved as any off-cuts can be essentially fed back into the process.
• 97% of the market is currently metal jacketed insulation hence there is huge potential for growth but efforts are needed to convert ends users and specifiers to non-metallic jacketing. The new GRP product will help bridge this. Typically metal clad insulation needs to be completely replaced every 7 years whereas the ULVA product has a much longer economic life. The BoD noted that the cost of replacing this insulation was in fact very small compared to the operational costs to the client caused by the replacement works.

Fullflow

• "Good profits" are being made in France.
• Now have a presence in Brazil and their system has been used for the new Chrysler / Fiat JV building.
• Need to secure a new MD (See Q&A section)
• Are market leader in the UK and offer a full turn-key solution, particularly installation.
• The US market is constrained by the Building Code which does not recognise syphonic rainwater systems although they have been specified on projects exempt from the Building Code.

Summary

• The BoD were very upbeat and positive and noted that the upcoming half year results were expected to be good.
• Debt had almost been eliminated from the balance sheet
• They were hoping to move back to a progressive dividend policy.
• Business is very cash generative, specifically ULVA, and once the new machine is operational this will improve further.
• A date was not discussed but half year results should be released around the end of March 2014.

I certainly came away from the meeting very positive and look forward to the half year results.

[norbert colon] 31/1/2014 11:38

Yes it was all very positive (although please note this same positiveness was present in last years annual report).

Lots of scope internationally for fullflow and ULVA is breaking into new markets like LNG and USA seems to be going well.

Crescent has won a huge £500k order for a helical staircase although it was noted that these dont come along often.

Negatives are that they are still struggling to recruit a new MD for the fullflow business and for MEA region of ULVA and this is holding them back.

I have 2 pages notes to write up so this is just a flavour. It was noted that the half year should be very encouraging and I see no reason to think otherwise.

[trentendboy] 31/1/2014 08:46

Great - thanks. Did you come away with a postive view? Construction is certainly picking up cyclically and they have survived and kept the dividend (however small)

[kemche] 31/1/2014 06:19

Norbert, that would be much appreciated thanks.

[norbert colon] 30/1/2014 22:14

Very interesting and informative AGM today attended by me and around 8 others. Lots of discussion before during and after the meeting. I will try and do some notes when I have time.

[spookies] 21/1/2014 16:38

Chart starting to look interesting.

[kemche] 16/1/2014 10:17

Looking forward to hearing that the production line has started operating - and without glitches. There was also a mooted senior level appointment to be made - any progress? Elsewhere I expect improvements across the board especially after clearing the decks of the various obstacles and niggles. No doubt there was an element of the kitchen sink in the "exceptionals" which should help things along this year - IMHO, DYOR etc.

[trentendboy] 16/1/2014 09:42

Annual review made for decent reading. Revenues down and will still be down but margins looking OK and some nice technology.

Already have a large holding but this has potential to improve. Once debt is paid off this will generate good cash that should increase the dividend.

Watching carefully.

[mudbath] 16/1/2014 09:23

Thanks for the info,Norbert Colon.
I was hoping that it would be in Yorkshire.

The Crescent metal staircase division should be seeing a huge increase in interest as property moves into the limelight and a new source of orders emerges as London property owners extend downwards.
imo

[norbert colon] 15/1/2014 09:47

mud

Annual General Meeting of SWP Group PLC to be held at the offices of Addleshaw Goddard LLP, Milton Gate, 60 Chiswell St, London EC1Y 4AG on 30th January 2014 at 11am (the "Meeting").

hxxp://www.addleshawgoddard.com/cdc/asset_store/document/london_map_124713.pdf

I will be going and look forward to meeting other shareholders there.