Synthomer Share Discussion Threads

[boonkoh] 29/9/2022 07:37

Now at a higher risk of breaching banking covenants.2.3x leverage ratio at results. Maximum is 3.5x before breach. Goes down to 3.25x early 2023.Now EBITDA down 10-15%. So ratio goes up 10-15%.Their debt is also in USD and EUR. So that's possibly another 5-10% increase in the ratio.After today's share price fall, debt will overshadow equity. Not a good place to be in. Classic further decline in share price as investors fret on possible outcomes.

[rcturner2] 29/9/2022 07:22

eps in the first half was 19p.

Even if we take a poor performance of 12p in H2 then we are looking at 30p+ eps for the full year.

So even after the profit warning we are on a PE of under 5.

[pottsypotts] 29/9/2022 07:10

Trading update out "the Board now expects Full Year EBITDA to be 10% to 15% below its previous expectations"
lets hope the price drop already reflects this, fingers crossed.

[mrminister] 28/9/2022 17:15

I need a 40% rise here now to break even , it's now a long term hold for me which I'm sure will bear fruit as it always has done in the past , you don't sell your best furniture in hard times & this company is a market leader in a specialist niche market ....very interesting times lay ahead

[tuftymatt] 28/9/2022 16:19

Me too mrminister but something tells me it won't be.
The company need to speak again regarding the debt then maybe we can push on.

[mrminister] 28/9/2022 16:13

Was that the final blow out drop this morning? ....I hope so , is becoming very frustrating

[hybrasil] 28/9/2022 10:28

Im about to push the buy button on this and several other stocks.

Probably being a bit greedy but I was tempted at £2.00.

Will I get them at £1.15?

[aringadingding] 28/9/2022 09:35

With regards to exchange rate risk:

If you look at the financial risks section of the last annual report, which is quite brief, it mentions how they have debt in different denominations to attempt to match income streams to some extent, how they use currency hedging to try to minimise risks also (implying things are not fully matched), but also states they have a cost base in sterling.

If a company has gross profit and interest costs in dollars, and fixed costs in pounds, then a weakening of the pound against the dollar is a good thing both for interest cover in dollars AND net income in pounds. The larger effect is on net income in pounds. I wonder whether the market has in fact completely missed this point for this company.

Caveat being hedging would reduce benefit.

[archy147] 28/9/2022 07:40

It's also called opportunity.

Fire sale across the market now on!

[brucie5] 27/9/2022 19:50

It's called capitulation. Watch the £1 level.

[archy147] 27/9/2022 19:48

This is looking to me like the some of deepest value on the market.

When markets panicked near the start of the covid pandemic, SYNT tanked to a silly low of 204p.

Now the pandemic is pretty much behind us and they've gone over 30% lower than even that! You couldn't make it up.

[robsy2] 27/9/2022 18:46

2!! I bought in at 3! Others stumped up at 4 plus on the rights.

[mrminister] 27/9/2022 16:48

Going down like all their manufacturing plants are in Ukraine ....crazy

[otemple3] 27/9/2022 16:42

Some big trades at the close. Fingers crossed that is the end of the relentless selling....

[brucie5] 27/9/2022 16:32

Then consider getting in with at least one foot...

[brucie5] 27/9/2022 12:54

Suggest you wait till £1.

[pottsypotts] 27/9/2022 12:48

You are not the only one, I got back in at £2 how wrong we wereDon't usually average down but am tempted with these

[otemple3] 27/9/2022 12:41

The collapse is relentless, thought I'd caught the bottom at c.£2 but how wrong I was.....

[justiceforthemany] 27/9/2022 12:36

Citadel advisors open a short here and the shares collapse by 40% in a month.
Yes FCA this is a really fair and regulated market!
(P/E <4 even on conservative estimates)

[edmundshaw] 23/9/2022 16:31

Well, isn't that pretty normal boonkoh, to balance revenues and liabilities in the same currency, unless you have currency hedges in place?

[boonkoh] 23/9/2022 12:23

Debt denominated in USD and Euros. Oh dear! At least revenues are also in USD and EUR...

[fuji99] 23/9/2022 10:55

Archy: "Imagine next week Putin announces his goals have been completed and commences withdrawing troops. That's an immediate 20% rise in half my portfolio right there" - Agree and this is a "Buy" signal but could be transitory as we still have inflation and interest rates to solve. Until then, I cannot see markets recovering under rising inflation and interest rates. Both can put breaks on growth as inflation freezes consumer spending while interest rates slow business investments (becoming more expensive to borrow from banks). Basically, at present, we are in a catch 22 situation.

[mrminister] 23/9/2022 10:46

550 to 150 in a year .....youd think the business was in dire straights ....nothing could be further from the truth ....ive chucked em in the bottom draw for now .....look again in 6 months or so

[brucethegoldfish] 23/9/2022 09:41

Good post Archy147 - spot on where my head is at!