Tekmar Share Discussion Threads

[jonwig] 26/6/2019 14:32

BGF Investments has 2,155,000 shares (4.25%).

I didn't know these, but they look interesting, good people to have on board:



"BGF is an investment partner for growing companies in every sector of the economy. We provide the tools you need to grow, from funding to expertise, while letting you set the course.

We believe in the power of brilliant businesses to drive innovation, generate progress and deliver prosperity. And we thrive in our role to help make that happen."

[thomshrike] 25/6/2019 08:09

Numbers look quite ok to me:
- 2019 was in line with estimates (GM are indeed down, but that's an expected reflection of mix).
- Company says to be on track to meet 2020 estimates. This is the key point. The company also flags seasonality (weighted towards H2), but that's totally understandable given timing of installations (weather-related).
- Backlog is again up strongly. Orderbook is up 33% yoy and their key "market visibility" metric improves from 38.1m to 50.0m in this semester alone.
- Net cash positive at 4.2m. Plenty of optionality here.
The company will be doing a roadshow in London this week.

[jonwig] 25/6/2019 07:36

Here are the FY results:



Definitely cloud-free unlike the interims. Potential revenue growth looks strong: maybe 44% in terms of 'market visibility'.

Current year (adjusted) eps of 6p needs to be seen in context of expected 10p in 2020 (broker view).

Gross margins are 35% (down from 41% in 2018). For me, that's an important number and I'd hope it stays around there.

[jonwig] 24/6/2019 06:52

£100m fund to boost UK-based supply chain for offshore wind:

[imperial3] 21/6/2019 18:40

Final results June 25th.

[thomshrike] 21/6/2019 17:43

Hi jonwig, I would put it the other way around: I don't know how they could not be involved. Their product is by far the best in the industry, said to have no more than c.70% global market share only because many clients require dual sourcing. Additionally, where I would certainly not expect them to find meaningful competition is in countries where the industry is nascent such as the US. Also Tekmar's products travel well (as opposed to those of listed peers like SIF).
Additionally this week Siemens Gamesa announced they got their first offshore wind preferred supplier nomination in Japan. The offshore wind industry is indeed emerging in other countries around the world. I would expect Tekmar to end up being involved there as well.
Note that Tekmar will present earnings next week. Fingers crossed.

[jonwig] 21/6/2019 17:01

I don't know whether TGP's partnership with Ørsted extends beyond the North Sea, but this could be significant:

"Ørsted selected as preferred bidder for New Jersey’s first offshore wind farm"



TGP thinks they should be into this ...

"Tekmar are the market leaders in the design and supply of Cable Protection Systems in the Offshore Wind industry.
Now on our 8th Generation of product, we've revolutionised the connection and protection of submarine power cables."

[aishah] 16/5/2019 18:44

What is Simple Moving Average - SMA

[imperial3] 16/5/2019 18:39

AISHA

I do not understand your post.Please explain.Thanks.

[aishah] 16/5/2019 16:19

Price above 20,50 and 200 SMAs

[thomshrike] 13/5/2019 17:37

My guess is that the market became confident enough to buy after the non-eventful trading update. Add to that the continuous positive newsflow for the offshore wind industry (and the company's solid competitive positioning, as opposed eg to dutch peer SIF that has seen new competition emerge).
Good to see the share price climb back to the IPO price, whilst shrugging off broad market weakness.

[jonwig] 13/5/2019 09:30

Have we a leaky company here? Past year-end and results about six weeks away. Not that trading is heavy, but there's not much stock around either.

[thomshrike] 29/4/2019 10:46

jonwig, yes, that is Berenberg.
Maybe 2 more comments from me:
- There is good reason to be confident on the jump in profitability in FY2020, both because the timing issues cancel themselves out and because there is inorganic growth coming through.
- Capex requirements are low, so that FCF yield is quite attractive going forward, especially for a growth company.

[imperial3] 29/4/2019 09:45

Jonwig

Thank you.

[thomshrike] 29/4/2019 09:33

My view: some market participants needed further reassurance before they bought. Even though the market generally appreciates both business outlook and management, the negative impact of the H1 timing-related downgrade left plenty of money earmarked to this one on the sidelines. I would never say that after this update the stock is out of the woods, as we need more clarity on the outlook for FY2020, but it certainly represents an incremental positive and will probably be seen as an excuse for some institutional money to flow in.

[jonwig] 29/4/2019 09:32

Sharecast has 2019 Revenue £30.00m, PBT £3.00m and eps 4.66p. (Stockopedia has 29.7 2.4 4.66.) with one broker covering. (Is that Berenberg?) eps for 2020 rises to 9.65p.

[imperial3] 29/4/2019 09:21

What is the perception of market expectations?

[jonwig] 29/4/2019 08:49

Good, thanks! Here's the detail:



And, "Boskalis aims to maximize UK local content for its scope of work."

[thomshrike] 29/4/2019 08:33

Thanks jonwig. This morning Berenberg calls this update encouraging. Trading attractively at 6.6x FY 2020 (March 2020) ev/ebitda.

An additional snippet. Big offshore wind contract awarded to Boskalis this morning: Orsted's Hornsea 2. The contract includes installation and protection of the cables. Tekmar has been the sole sub-supplier to Boskalis, so I would expect this to flow nicely onto its backlog.

[jonwig] 29/4/2019 07:09

Just now:

Tekmar Group plc, a market-leading technology provider of subsea protection systems, will announce its final results for the year ending 31 March 2019 on Tuesday, 25 June 2019. The Board expects these results to be in line with market expectations.

[jonwig] 12/4/2019 11:05

Good bit of news, thanks!

[thomshrike] 12/4/2019 11:00

I agree jonwig.

Also, sales email from Finncap today. Apparently Tekmar's CEO came to their office earlier this week to present the story. Possibly new coverage? Finncap writes:
"we invited the management in to give a presentation – which turned out to be much more exciting and energised than we expected. The group boasts strong credentials, good market positions, strong growth opportunities, a strong board and quality shareholder base"
And,guess what, they add at some point:
"The company has just gone through its March year end, with no trading update the assumption is that the management is happy with forecasts, with a strong 2H improvement"

[jonwig] 12/4/2019 10:32

thom - in December they said, "Short-term delay in Preferred Bidder contract awards and change in product mix expected to impact FY19 results with profit now likely to be closer to that achieved in FY18".

So that should stand; if there's been a change of circumstance, they should say so.

[thomshrike] 12/4/2019 09:53

I find it interesting that the company is now through its FY end and there was no RNS. Does this mean that numbers should be at least in line with estimates? If that is the case, and also given attractive growth potential and valuation and how so many underperformers have recently rallied after reporting in-line numbers, this might turn out to be an interesting buy at current levels.

[jonwig] 28/3/2019 14:47

@ thom - quite possibly but more precisely, "the owners were not paying themselves a salary...".

Also the residual 20% at up to £2m could be based on some pretty concrete conditions regarding contract wins, turnover contribution, etc. Maybe they're confident they can reach them!