Synthomer Share Discussion Threads

[meijiman] 03/10/2022 10:06

It's amazing..seems to be valued at less than Yule Catto all them years ago.
Wonder if they overpaid for the US adhesives acquisition?....difficult to say as early days.
Debt looks manageable.
Personally I don't see the destocking as all that serious..sure it's not good news but just a factor in the fall out from covid.
They are doing a presentation on Oct 12th..they don't have to do it. Surely they are not using it to impart bad news! In fact the opposite is likely with a focus on the long term growth prospects. As you say the valuation is in strongly oversold territory.

[lonrho] 03/10/2022 09:18

This must be a candidate to be bought out, only on about a p/e of 5.5 just based on first half earnings alone.

[hamhamham1] 01/10/2022 14:33

WJ, we meet again :)

[mrminister] 30/9/2022 15:48

BBC today " Covid infections in the UK are rising and have topped more than one million, according to official estimates.

There has been a 14% rise in people testing positive - which is the biggest weekly increase since the summer "

this will get the glove re-stocking back on track and the share price re-bounding

[prince7652] 30/9/2022 14:19

Adding all day takeover?

[w1ndjammer] 30/9/2022 11:49

well i got two down ticks for saying i had bought at 93p

it don`t look to shabby now....

WJ.

[archy147] 30/9/2022 11:47

I averaged down yesterday too, what a marvelous buying opportunity that was!

[brucethegoldfish] 30/9/2022 11:46

I’m wondering if we may see some Director buys at these levels.

Agree with others on mid-term view, expect there will still be short term volatility though moving with the markets.

[sbb1x] 30/9/2022 11:45

Looks like big holders buying to bringdown there average

[hamhamham1] 30/9/2022 11:14

Yep, 500p target for me in medium term, tuck away

[brucie5] 30/9/2022 10:50

Looks like back over £1. Where it should have stopped yesterday except for wider market madness. On three year recovery view, this seems to me more likely than not, a surviving multi bagger. But wdik.

[mrminister] 30/9/2022 09:00

im well underwater so i will hold for the medium term ....added more at 87 yest .....in auction for a moment there .....nice

pound doing better also ....@ 1.12 .....nice

[tuftymatt] 30/9/2022 08:52

Yeah better than dropping again but I won't be buying more. Seen it all before here with a step forward followed by two back.

Can't blame anyone who takes a chance here but if we do get 10% + rises then profit taking will kick in seeing this fall away again I feel. For me this is a share I will just leave alone and hope for the best at some point in the future.

[meijiman] 30/9/2022 08:49

Can't see the company doing a presentation to investors on Oct 12th without having a few positives. I bought yesterday in the mini panic. Yes there are some problems and debt is too high but the valuation looks too low.

[mrminister] 30/9/2022 08:19

v good vols today already ..... might see +10% with a good tailwind

[muzmanoz] 30/9/2022 07:58

In todays time (obviously Jefferies calculation of leverage differs from the companies)With net debt levels expected to be about £1 billion, the broker Jefferies said that with borrowings at 3.5 times the underlying earnings from which it services its credit lines, Synthomer was likely to speak to its banks.The company said it was embarking on "strategic initiatives", indicating it will look at selling parts of the group.

[hamhamham1] 29/9/2022 18:43

Where are most the factories for this company, China? If so Asia has the cheapest gas, Russia pushing discounts eastwards.

[reddirish] 29/9/2022 18:14

Fair point: I missed the reference to 'active management', usually board speak for doing things outside their competence area....

[aringadingding] 29/9/2022 16:29

Yeah but my point is it's an average over 20 years. If they don't do a rights issue then it will come back once all this has blown over. They are well established in large and growing markets. I can see it might get tight on their covenants but I doubt they will need to do a rights issue. They can cancel the dividends for the next 5 years for all I care.

[tuftymatt] 29/9/2022 16:11

That can be changed in no time though which is of huge concern as a cut will drag the price down for sure.

[aringadingding] 29/9/2022 14:20

A dividend yield of 10%, taking the rough average across the last 20 years and today's share price... what a nonsense.

hxxps://www.dividenddata.co.uk/dividend-history.py?epic=SYNT

[aringadingding] 29/9/2022 14:01

Re. de-stocking... I see so their customers are de-stocking the gloves which means they don't need to buy the formulations that they make the gloves from. Fair enough. Short term though quite clearly.

Re. the FX issue, right this is what I mean. All dummy numbers to illustrate the concept. The fundamental currency of an item is to left of row label:

Scenario 1: $/£ = 1.4x
$-Revenue $300
$-Variable costs ($100)
$-Interest cost ($50)
£-Fixed costs (£50) or ($70)
£-Net income £57 or $80


Scenario 2: $/£ = 1.1x
$-Revenue $300
$-Variable costs ($100)
$-Interest cost ($50)
£-Fixed costs (£50) or ($55)
£-Net income £86 or $95

So with a decline in the £ against the other currency ($ in the example above) NI of 57 becomes NI of 86.

Economic tail winds, reduced customer demand, increased input costs, absolutely fine. I accept all of those arguments. Pensions I have no view on. But FX... this seems positive. Hedging is unlikely to be 100%, plus hedge products are always time limited and the new market exchange rate will be the new base situation afterwards.

Also it is just ridiculous to suggest that this share did not already price in a 15% reduction in EBITDA.

[al101uk] 29/9/2022 13:40

Their description of their "active scheme management" is almost the defenition of the Liability Driven Investment strategy used for under funded defined benefit pension schemes, which is exactly what they have.

If it walks like a duck and quacks like a duck... it's probably a duck.

If you think pension liabilities simply shrink when interest rates rise then you haven't been watching the news over the last couple of days. There is a specific issue with underfunded defined benefit pension schemes because of the way they are hedged.

Edit - The issue is more liquidity based than anything else and all being equal, if the pension fund doesn't go in to complete meltdown, then you are right that pension liabilities will close.

[reddirish] 29/9/2022 13:32

The increase in interest rates will reduce pension fund liabilities. Any pensions already being paid are now the problem of the contracted insurance companies.

[rcturner2] 29/9/2022 13:03

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