Synthomer Share Discussion Threads

[joey52] 05/7/2022 18:46

AJ Bell paid today

[johnsoho] 05/7/2022 18:33

Has anyone received their dividend yet? I’m still waiting for it to be paid into my account.

[james dean] 05/7/2022 18:21

monty (post 779)

The wife looked very pleased with hers today.

[rcturner2] 05/7/2022 07:32

Stockepedia is forecasting eps of 36p and a dividend of 15p a share.

[rogerramjett] 04/7/2022 21:51

So this is now at a what ? 5 year low ?

Ridiculous. Cannot see much of a loss in earnings due to the 'rubber gloves' reduction. Just read the annual report. Eastman acquisition expected to produce double digit earnings per share and has the potential to bridge that's loss from the gloves.

Mental share price and to me, one I will be adding to in quantity.

[bldm] 04/7/2022 19:15

Looks cheap but that doesn't mean much XD.

[montyhedge] 04/7/2022 10:45

So what roughly is dividend yield at say 224p, 5% - 6%.The 21.3p dividend they paid I think should have been called Final and Special dividend.

[brucie5] 30/6/2022 14:38

Mentioned, inter alia, in the SDV final results update.

Eight new shareholdings were added to the Company's portfolio in the year (2021: 8), including: DSW Capital - a challenger mid-market professional services business; Kitwave Group - an independent impulse product wholesaler; Spectra Systems - an IP led business focussing on secure transaction technology; Springfield Properties - a Scottish housebuilder; and speciality chemicals business, Synthomer. Shareholdings were also increased in 20 companies (2021: 33) which were in the portfolio at the start of the year, including Bakkavor, ContourGlobal, Duke Royalty, Hargreaves Services, iEnergizer, MP Evans and Palace Capital.

[bldm] 30/6/2022 13:08

Quarterly rebalancing in play? Although, I would have expected this to be pushing the price up rather than down. Thoughts? At current prices, I expect the div yield to be around 5-7%.

[edmundshaw] 30/6/2022 12:51

So there is a seller... without knowing who that is it might be completely unconnected to anything company-specific or even sector-specific, or of course some kind of insider naughtiness. Shortage of buyers might also be exaggerating the drop.

I am still underweight here and added a few more today, as medium term I am having difficulty in finding a problem, and I have good holdings in most of my other hopefully undervalued shares already.

[tuftymatt] 30/6/2022 10:37

Yeah this has gone way too low in my opinion for there not to be a reason outside of market conditions behind it. What a ball ache 😩

[al101uk] 30/6/2022 09:26

RCTurner2,

I don't think debt is a problem, but the deal was completed post results. So you have to add the debt from the acquisition. Interest on current debt stands at around 4%. 4% on £250 million borrowed (educated guess) will reduce dividend payments for a while.

I didn't calculate this in my original over-blown dividend expectation, so while my revenue, EBITDA and Operating Profits were around broker levels, my estimate of dividend yield was spectacularly out :-)

[mrminister] 30/6/2022 08:12

yes incredible .....almost back to worst covid prices again

[montyhedge] 30/6/2022 08:09

Something seems wrong here.

[rcturner2] 30/6/2022 07:54

Synthomer started 2021 with 462m of debt and finished the year with 114m of debt.

I really don't think debt is an issue here.

[rcturner2] 30/6/2022 07:53

Cash performance

The Group's primary focus is on managing net debt by maximising Free Cash Flow. The following table summarises the movement in net debt and is in the format used by management:


2021 2020
GBPm GBPm
Opening net (debt)/cash (462.2) 20.7

Underlying operating profit (excluding
joint ventures) 448.3 188.4
Movement in working capital (82.8) 23.5
Depreciation of property, plant and
equipment 64.2 64.9
Amortisation of other intangible assets 7.1 4.9
Share-based payments charge 2.1 2.0
Capital expenditure (82.2) (53.8)
--------------------------------------------- ------- -------
Business cash flow 356.7 229.9
Net interest paid (27.6) (14.0)
Tax paid (86.4) (31.4)
Pension funding (27.0) (18.8)
Dividends received from joint ventures 1.9 1.9
--------------------------------------------- ------- -------
Free Cash Flow 217.6 167.6
Cash impact of restructuring and site
closure costs (17.8) (25.3)
Cash impact of acquisition costs (6.6) (7.4)
Acquisition costs and purchase of business - (587.6)
Sale of business 1.7 0.1
Share issue proceeds 203.1 -
Repayment of principal portion of lease
liabilities (9.7) (9.7)
Dividends paid (73.5) (12.8)
Dividends paid to non-controlling interests (0.5) (3.1)
Foreign exchange and other movements 33.7 (4.7)
--------------------------------------------- ------- -------
Movement in net debt 348.0 (482.9)
Closing net (debt)/cash (114.2) (462.2)
--------------------------------------------- ------- -------

[al101uk] 29/6/2022 22:11

They use underlying EPS, not EPS to calculate dividend.

Broker consensus is around 15p. I think guidance for 2022 is pretty clear and easy to understand. Brokers are projecting flat for all segments except Performance Elastomers, with that revenue being made up for by the new Adhesive Technologies segment.

Revenue is projected to be up this year, but profits down (30% at EBITDA level) as a result of the exceptional profitability of Performance Elastomers (NBR).

Given over half of revenue is generated from those two divisions any growth in the others will only account for modest gains.

The debt will weigh heavily on underlying eps for a while and will hinder dividend increases.

How accurately brokers have forecast dividends will depend on growth in other divisons and the amount and cost of additional debt to pay for the acquisition.

Performance Elastomers resuming normalised sales and margins will be a plus in 2023 vs 2022.

[robsy2] 29/6/2022 17:12

I bought a reasonable amount of shares at 300p ish a few weeks back thinking things had stabilized. Thought it looked like a decent entry point but i was completely wrong.

[edmundshaw] 29/6/2022 15:35

In the current environment I am not sure the analysts can have a clear idea of 2022 or 2023 earnings. But medium term, and with some positive looking acquisitions, I am confident that an average of 30p earnings is going to look very low within the next 2-3 years assuming a reasonable market recovery. I today completed an underweight investment in this company, as we seem to be a falling knife I am allowing capacity to add further on further falls. I would have been happy with 270p, but, obviously, the cheaper the better!

[gstarkey] 29/6/2022 13:49

Analysts’ consensus eps forecast for calendar 2022 is 29p, so on a 40% payout ratio, that’s a full year forecast dividend of 11-12p. Quality company with share price currently very low in the water but sadly lots of others out there.

[al101uk] 28/6/2022 16:18

Sorry, badly worded. I wasn't saying that was abnormal.

[edmundshaw] 28/6/2022 15:48

??? Surely operating profit is always before tax and interest (but after business expenses). That is how it is defined...

[al101uk] 28/6/2022 15:39

Got an answer, it's primarily a tax and interest issue.

They quote "underlying operating profit" before tax and debt interest.

They use "Profit/(loss) attributable to equity holders of the parent" for the underlying EPS number, which is an after tax and interest figure.

There are some other minor deductions, but those are the key ones.

Calculating debt interest isn't easy as it's not clear how much of the $300 million credit facility they have used. They do give a tax rate in the results though.

No projections from me, but I'm happy with my model and I think I'm within the same margin of error as the brokers, probably at the top end of broker estimates (I only have consensus numbers).