Synthomer Share Discussion Threads

[edmundshaw] 04/8/2022 15:01

fuji99, 50% lower? You are pretty hopeful there! For Synthomer to reach a PE of 2.3 and a yield of 13% something pretty catastrophic will have to happen.

Personally, I am switching some funds from financials which are doing well right now into some silly valued stocks which I expect to outperform in due course. Such as SYNT of course...

[my retirement fund] 04/8/2022 14:49

Follow the directors imo - nothing is fundamentally wrong here

[pottsypotts] 04/8/2022 14:46

Price near the March 2020 low when according to the doom mongers the world was about to end due to a virus, directors now picking up what they consider a cheap price long termPicked up some myself at 186

[fuji99] 04/8/2022 14:35

IMO it is a bit risky to commit more funds this year because the BoE has just flagged up a recession in the 4th quarter. With interest rates going up by 0.5% there will be a squeeze in borrowing thus in investing in almost every sector. SYNT is just a victim of its latest results but most stocks will follow in the same direction in the next few months due to a dire economic uncertainty and higher inflation everywhere. I will not add anything into my portfolio until things start clarify next year. With Russia/Ukraine and now China/Taiwan, it is almost impossible for the markets to remain where they are today. Staying out means we could pick up all stocks cheaper with sometimes 50% lower than what they are this year. So I am very light at present and will remain so for all this year. We can easily find ourselves in a severe bear market for a few years if China/Taiwan - where most of the manufacturing/microchips etc. is located - add to the equation.

[rogerramjett] 04/8/2022 13:57

Mental share price Completely irrational.

[edmundshaw] 04/8/2022 12:48

Nice work Gary1966. Wish I had waited more patiently now... but I am sure anything under 250p will look pretty good in a year or so.

[gary1966] 04/8/2022 09:25

Decided just to top up at 190p with £12500 rather than the £25k I was originally looking to do. Will see how things go over the next couple of weeks.

GLA

[mrminister] 04/8/2022 08:43

vols now strong ! .... half a mill......turns blue .....nice

[mrminister] 04/8/2022 08:19

nice work .....red pen out again but vols are low so maybe the selling has subsided now ......good luck ....why on earth you would sell here at this price is madness ....even in yule catto days it was rarley this price from memory

[my retirement fund] 04/8/2022 08:15

Right i've taken more, that will have to be my lot now, looks good value, a good future, plenty of income from dividends when cash flow allows, management that prioritise shareholders interest too

[gary1966] 04/8/2022 06:54

From the interim results:

Resilient business - inflation cost increases passed through; unit margins higher in Functional
Solutions and Industrial Specialities
-- Resilience underpinned by enhanced US position, broad end-market exposure and network agility
-- Low energy intensity across global operations with extended energy management

So from this cost increases are being passed on to the customer and energy situation looks as though it is being managed and possibly some sort of hedging or longer term contracts in place.

[al101uk] 04/8/2022 01:27

See page 29 of the interim results (the notes on risks) and page 69 and 75 of the 2021 Annual report.

Looks like the likelihood of an impact from raw material availability is now high (upgraded primarily due to the energy crisis in Europe), but the impact remains the same, at the top end of low.

EBITDA margin for 2019 & 2020 was around 13%, which is the same as H1 this year, so no visible margin squeeze at the operating level.

Don't have access to my model currently, so still trying to work out what has spooked investors. Cashflow seems to be primarily around movements in working capital which I assume is to fund the new business, from memory revenue has beat expectations.

No intention of buying a company giving up more over 5% per day in any case. Equally, I see no reason to sell in to weakness.

[pete160] 03/8/2022 22:42

Thank you, as ever, for your insights, I don't know the answer, hence why asking the question, but even if a proportion of the debt is fixed for a good while, are their energy costs and also the energy costs of their customers?Without cooperation from the Saudi's or a resolution in Ukraine, it seems that energy prices are not going to fall anytime soon, and that must be hurting the bottom line?

[gary1966] 03/8/2022 21:34

I have an order in for another £25k at 190p so looks like I may be joining you MRF.

[my retirement fund] 03/8/2022 21:13

Jeez look at the price. I'm gonna have to buy even more at this rate. Clearly someone is selling who is clueless or there's something going on here not in the public domain, which is it?

[edmundshaw] 03/8/2022 17:20

Debt is £993M. Assuming H2 performance and Adhesive Tech continue as they were in the last half/quarter, and a 12p dividend for the year, I get:
Profit before tax for the year run rate of £266m (not allowing for growth, synergy or inflation benefits). Cost of dividend is £56m so that eats up £73m of PBT (after accounting for the tax) leaving over £190m a year for other purposes such as paying down debt.

Given the EUR520m 3.875% senior unsecured loan notes (due in 2025), interest rate rises should not be an issue. The covenant ratio is 3.25x after December (3.5x before), current ratio is 2.3 and likely to fall under 2x in the next 6 months so comfortable. Given the earnings quality I don't see any problem with raising new capital in extremis, and the divi could be passed too, so yes paying some debt down is needed, but for me debt is not an issue.

A PE of under 5 is not sensible.

[gary1966] 03/8/2022 17:10

And they have a nice current business and acquisition to do it with.

[owenski] 03/8/2022 16:44

Lot of debt to pay down too.

[tuftymatt] 03/8/2022 16:19

That is crazy timing for the Director buy at 214 based on how the day has gone since!!

I am tempted to grab a few at sub 200 but won't as it just seems to want to go lower unfortunately. Will happily buy into a decent move up as it will be a long way before my average goes up that's for sure!!

[linton5] 03/8/2022 15:48

Lol monty you turncoat disappointed ☹️ in you after previous posts

[montyhedge] 03/8/2022 15:34

They had a one great year, paid a massive dividend one big acquisition with debt and now paying the price it seems.

[mrminister] 03/8/2022 15:18

Best have a take over ....3M ....dow chemicals are you watching

[my retirement fund] 03/8/2022 15:10

Good to see some a director purchase

[owenski] 03/8/2022 15:02

Cheap always gets cheaper though.

Recent results weren't an encouraging read.

[onjohn] 03/8/2022 14:56

60p tareget