Thorpe (f.w.) Share Discussion Threads

[mark c graham] 18/3/2004 15:18

I estimate prospective EPS at 27.7p (now in header).

[mark c graham] 18/3/2004 12:38

Penpont - I am reworking just now and will post shortly. My forecast will be higher than that.

[penpont] 18/3/2004 12:35

I am new to this share - has anyone got a full year eps forecast? Would something in the region of 25/26p be about right?

[langland] 18/3/2004 09:47

Nice forecast, MCG. If you strip out the cash, co. is trading at 5 times potential operating profit. (I am just doubling the £1.7mn to £3.4 for the year which is probably too conservative.) All time high was near 290 in 1995. I wouldn't bet against the price reaching that again.

[mark c graham] 18/3/2004 06:46

10 years, goldthorpe - I think you need an exit strategy!

[goldthorpe] 17/3/2004 13:56

Mark,
I've had a chunk in my own name for 10 years, bought at 1.65 and a bigger number in a PEP bought for 1.49 6 years ago. Been happy with the divi, though the business has been a bit lumpy. Will probably hang on for 10 more years. I hate selling!

[mark c graham] 17/3/2004 12:34

Offer price on 17/03/04: 209p

Income received since 17/03/04: 8.6p

Bid price at 18/01/05: 352p

Return to date: +72.5%

F.W. Thorpe is an LSE-listed manufacturer of lighting products. It has been consistently profitable, has no debt, and is highly cash generative.

It is not covered by any analysts and has, I believe, been overlooked by the market.

Interims are out tomorrow, and I forecast the following.

Turnover: £17.3m (+5%)
Pre-tax profit: £1.7m (+15%)
Dividend: 2.0p (+5%)
Cash: £7.3m (+50%)
NAV per share: 195.8p (+10%)

The investment case for the business is easily made based on the normal criteria of PE ratio, dividend yield, etc. But what makes this really interesting is the cash position. Basically, the company already has much more cash than it needs, and is continuing to generate more. They have given no indication of what they are going to do with this cash, but rebasing the dividend or share buy-backs are what they should be looking at.

The headline historical PE ratio under my forecasts is 8.3, which is the lowest in its sector. Backing out the cash reduces this to 6.2.

My full year profit forecast is £4.3m, giving a prospective PE ratio of 7.2 (5.6, excluding the cash).

I bought in (too early) at 223p. My exit strategy is to sell at a prospective PE ratio of 12, which represents a price of 346p, under my analysis.


Update 18/03/04
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Excellent interims, with all key figures slightly better than my forecasts.

Turnover : £17.8m (+9%)
Pre-tax profit : £1.9m (+28%)
Dividend : 2.20p (+16%)
Cash : £7.4m (+53%)
NAV per share : 194.9p (+10%)

My updated full year forecasts are:

Turnover : £35.1m (+7%)
Pre-tax profit : £4.4m (+18%)
Cash : £8.9m (+32%) = 75.9p per share
EPS : 27.7p (+24%)
Dividend : 7.2p (+9%)
NAV per share: 206.4p (+11%)

Update 16/09/04
------------------------

Superb full year numbers, with all figures except cash better than forecast.

Turnover : £37.8m (+14%)
Pre-tax profit : £5.4m (+44%)
Dividend : 8.6p (+30%)
Cash : £7.6m (+12%)
NAV per share : 209.7p (+13%)

My forecasts for full year 2004/2005 are:

Turnover : £37.8m (+1%)
Pre-tax profit : £5.9m (+9%)
Cash : £11.5 (+52%) = 97.4 per share
EPS : 37.8p (+15%)
Dividend : 10.0p (+16%)
NAV per share: 237.4p (+13%)

My forecasts for the interims on 17 March are:

Turnover : £18.7m (+5%)
Pre-tax profit : £2.2m (+18%)
Cash : £9.0m (+21%)
EPS : 14.3p (+28%)
Dividend : 2.6p (+18%)
NAV per share : 221.4p (+14%)

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Revised target price based on prospective PE ratio of 12: £4.53

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[skyracer] 20/3/2003 15:47

An interesting share until I saw the dreaded words "defined benefits" on note 25 of the Annual Report. I expect the pension deficit to rise again this year to 30th June 2003. Eventually the P/L will have to take a big hit. FRS17 casts a long shadow.

[s34icknote] 14/2/2002 18:25

If you want a steady company overlooked.
4.7 % Yeild PE of 6 Growth prospects.
Any one else looking?