Tekmar Share Discussion Threads

[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!

[thomshrike] 28/3/2019 12:53

Given the level of profitability of the target and the structure of the deal, could it be that the owners were not being paid a salary (and they will be paid a salary after the deal)?
Although certainly strange, it looks more of a concern for the seller than for the buyer.

[jonwig] 28/3/2019 12:51

The RGL accounts for 2017 show current assets of £44,122 and creditors of £30,121 at 30/11/17. Maybe the creditor wants his money back and TGP have undertaken to guarantee it?

Companies House pages:



They look happy enough:

[imperial3] 28/3/2019 11:47

I just do not understand this deal at all.As they have acquired 80% for £2, why should they even consider exercising their option of paying up to a maximum of £2 million up to 27 March 2022,for the remaining 20%?

[jonwig] 28/3/2019 07:27

Acquisition of Ryder Geotechnical Limited:



... pay £2 for 80% (!) with option to buy the rest for up to £2 million.
"In the published accounts for the year to 30 November 2017, Ryder Geotechnical had turnover of £102,315, profit of £48,385 and had net assets of £14,000."

Website:

Strange way to structure a deal!

[jonwig] 11/3/2019 16:48

Losing the higher margin contracts in H1 2019 means gross margins have fallen to ~20% from over 40% in FY 2018. The fact that this was announced in December was about as unhelpful as it could get.

So the market took this as a major profit warning rather than a slippage, but the company now has to demonstrate that it can perform to its undertaking in the H1 statement.
If that happens, and it becomes a secure link in the supply chain of the Sector Deal (why not?) the shares should progress from here.

No doubt buying on Friday followed this publication, and some holders are still determined to sell. But worth remembering that 90% of the shares are held by institutions who - we hope! - take a longer-term view.

[hiddendepths] 11/3/2019 11:54

Thanks Jon!