Synthomer Share Discussion Threads

[rcturner2] 29/9/2022 13:03

Unfortunately hedge funds are often better informed about a company's real performance than the actual management.

[al101uk] 29/9/2022 12:30

Good news and bad...

Currency risks will continue to be hedged in line with Group policy.


Our global pensions team will continue to monitor pension risks through active scheme management, including the implementation of investment strategies in line with the maturity of each of our pension schemes.

Sounds like they are exposed to the LDI pension issues to me.

[justiceforthemany] 29/9/2022 12:28

Citadel hedge fund short selling this have clearly had privileged inside information and this warrants a full FCA criminal investigation.

[muzmanoz] 29/9/2022 12:26

I struggle to get my head round the fx. They took a £44m fx charge due to the erosion of the £ in the interims. Likewise wasn't it a £120m increase in material costs in the interims. Hopefully that's come down significantly. They have implemented input and working capital cost reduction plans.

[justiceforthemany] 29/9/2022 11:55

No wrong. Commodity prices have collapsed over the summer as has oil of course.

[aringadingding] 29/9/2022 11:46

Ok thank you.

Frankly the EPS could be zero this year and next year, and 20p the following year, and it would still be good value.

FX seems a tailwind to me. If you run some demo numbers with revenue, variable costs and interest cost in one currency, and fixed costs and net income in another, and look at impact of a change in fx on net income, you will see what I mean.

[muzmanoz] 29/9/2022 11:26

It's customer restocking. Stockopedia has consensus eps of 33.8p this year and 35.9p for next year but that is before todays announcement. They are facing headwinds of fx and raw material cost increases.

[aringadingding] 29/9/2022 10:29

Debt covenants are not that big of a deal. Cash can pay down debt plus erosion in pound is good for this company. There is a massive difference between debt covenant miss and actual cash default.

10%/15% reduction to prior EBITDA forecast... Does anyone know what that prior EBITDA forecast was?!

Latest analyst forecasts of EPS for coming financial years would also be much appreciated.


What are they actually saying also with regards to de-stocking? Their destocking or their customers' destocking? If the former that is just a working capital thing, not an impact on COGS / EBITDA. If their customers' then yes that will lead to temporary dip in sales but that is temporary - obviously.

[justiceforthemany] 29/9/2022 10:04

Now trading at 2 or 3x earnings. Those attacking the balance sheet are wrong. Debt to equity and equity ratio are solid.

[babbler] 29/9/2022 09:39

some big buys in.

[rcturner2] 29/9/2022 09:33

I think the worry though is the debt covenant, at what point do they become at risk of being in breach of their covenants?

[brucie5] 29/9/2022 09:27

This may go two ways... surprise surprise...
My hunch is that the sell-off has already discounted a huge amount of bad news. I will be disappointed if they now cancel the dividend, as it will indicate distress, as opposed to reduced/poor expectations.
But assuming this is all manageable, the counterside to all this is a great company on a rock bottom rating. Let's see where the price settles but wouldn't be surprised to see it recover to the £1 level as people reappraise. Many will have sold first thing, while others may have a longer-term view of the proposition.
NAI obviously - I appear to have got this wrong pretty much all the way down.

[w1ndjammer] 29/9/2022 09:26

Back onboard 93p last sold 190p 13th September 2022

These opportunities don’t come along often

Let’s see how we go…..

WJ.

[muzmanoz] 29/9/2022 09:25

With the interim results eps was 19p but didn't that only include one quarter of the results for the adhesives business (which was ebitda of £18.3m)?

[mrminister] 29/9/2022 09:07

yes good point brucie ..... they hold 19 mill

[brucie5] 29/9/2022 09:02

I'm curious about Greater Manchester Pension fund: they surely did their dd?

[pottsypotts] 29/9/2022 08:56

In at 92.8p as i believe the current market sentiment has affected this too severly, time will tell

[edmundshaw] 29/9/2022 08:29

Dividend is irrelevant. They might as well pass it for a year or so while they deleverage. Looking like a medium term play here now.

Pretty poor management not to foresee or communicate the low demand for NBR. But if that returns closer to normal mid 2023 the issue may be fully resolved in a year. All else being equal this will be a bargain, provided there are no other issues and that covenants are maintained or otherwise managed.

[brucie5] 29/9/2022 08:09

And we pretty much have £1. OK, So what's the sustainable dividend here?

[mrminister] 29/9/2022 08:06

1.10 it is then ......

[muzmanoz] 29/9/2022 07:49

How can management only now realise that nitrile glove restocking issues will last until the end of 2023!? That's quite a leap from previous assertions.

[tuftymatt] 29/9/2022 07:41

Well they have spoken but I can't see it doing anything to stop the decline unfortunately.