Titon Share Discussion Threads

[liarspoker] 28/1/2012 13:13

Hi Dave,

Thanks for your comment. I always appreciate thought out comment whether it's good or bad.

Trading does always seem tough here but hopefully the Korean venture will grow to be a larger portion of revenue/profits as time goes on ( followed by a HK listing ( wouldn't that be grand!! )).

It's just not cash to market cap that looks disproportionate but mainly cash needed for operations. Cash has always varied a bit but has always been a solid pile. For example cash at year ends have been as follows:

2011 £2.86m
2010 £3.11m
2009 £3.10m
2008 £2.54m
2007 £1.68m
2006 £2.08m

Cashflow per share and free cashflow per share are as follows:

2011 7.19p (2.24p)
2010 6.53P (3.38p)
2009 9.25p (7.30p)
2008 16.97p (13.13p)

I'll leave you to draw your own conclusions from that.

I am well aware that TON is a net net and that is why I am here. it's a perfect net net in my book actually - large cash position, no debt, pays a divi, is somewhat profitable and has large property assets which aren't even factored into my value calculation. Perhaps what we have here is shareholder/management conflict after all TON is a sub-par business which is why it trades at prices it does. Shareholders would best be served if operations were closed down and cash returned to shareholders however like you said Anderson has a big stake so what is his incentive to close down.

I see that options were issued at 48p so if some cash was returned then I'd be fairly sure that 48p would be hit therefore Anderson could exercise his options plus take the cash from the capital return ( which would be +-£170K on a £800K return ).

A sale would be interesting too or a take-over but time will tell with these options. Perhaps us shareholders could let suitable acquirers know about TON ?

[dab26] 27/1/2012 15:17

Hi LP,

I've no holding here, but as you asked, I would say that I think the board would be sensible to hold on to as much cash as they can until such time as they are sure of a fairer tailwind - assuming they wish the company to continue trading.

I appreciate it could appear that the amount of cash they have on the balance sheet looks disproportionate to their market-cap, but trading seems to have been tough for these guys for almost as long as I can remember, so who is to say how much cash they might need in the future?

Of course, there is another option; as I recall, TON is trading at a discount to net current assets, so in Ben Graham's language, I guess it might well be worth more dead than alive. But the Chairman has a big stake here doesn't he...? In which case I imagine either he will continue to run it and hope for better conditions to arrive (in which case they should hang on to the cash I'd argue), or at some point perhaps the board could be persuaded to voluntarily wind-up the company and distribute the proceeds to the shareholders. My guess (depending on the age of the Chairman), would be that the former is more likely than the latter.

Not inconceivable that the company could be sold either I suppose, but nobody's bought it yet and it's looked cheap for years.

Anyway just my two-penneths. As I say, I'm not a holder, so do feel free to ignore.

Regards,

DB

[liarspoker] 25/1/2012 22:47

Interesting trading statement. Good to see the UK doing a bit better.

HP - ROCE figures for the last 6 years:

2011: .06%
2010: 8.94%
2009: (3.09%)
2008: (1.83% )
2007: 3.84%
2006: 8.42%

I agree that they are doing well to scratch out a profit but note that the above figures are calculated on operating profit. also note that when the operating profit turned negative in 2008/9 the company excluded the operating profit line in the annual report ( thus forcing me to calculate it myself ). Such an exclusion was obviously made to present the figures in the best light possible ( ie why have a negative operating balance when we can leave the line out all together ).

I still think the business is terrible but not to the extend that it should be trading as a net net with a disount of 33% to net working capital.

It's the property assets that I am interested in. I know they have a factory and showroom but does anyone else know if they have other property assets ( land perhaps ) ?

[hugepants] 25/1/2012 20:39

The directors hold 26%

The other major shareholders are:

Discretionary Unit Fund Managers Ltd 2,065,000 19.6
Mrs C Ritchie 917,280 8.7
Mrs A Clipsham 843,579 8.0


Ive no idea if Mrs Ritchie or Mrs Clipsham are friends of the directors. It would be helpful if they could put "friends" (or "enemys") in brackets beside their names so we know.

The spread looks ok to me. The Discretionary Unit Fund could block a delisting even if Ritchie and Clipsham join forces with the directors in a three-pronged pincer movement!

[davydoo] 25/1/2012 20:15

Liars, I need to do a lot more research but I may buy a small holding and go. Im very interested to learn what is discussed by a business finding itself in this position, and faced with the valid points raised by davidosh. Im sure it will help me with other holdings.

Im a big fan of microcaps, especially value ones, but theres always the niggling doubt about delisting, for which i don't yet feel i have sufficient capital to take that uncertain path. JCR being a good example, although thankfully I was out when they announced the delist.

Will let you know.

[hugepants] 25/1/2012 15:11

I don't think its a terrible business. They've done well to eke out a profit considering how tough the housebuilders are finding it. Profits should recover.

update out:

[liarspoker] 25/1/2012 14:22

Property valued at cost is £3.4m or around £2.4m on a net book basis.

Basically there is 55p of net working capital ( ca less tl ) and 24p net book worth of property. Cash is worth £2.8m against a £17K overdraft.

There are no pension issues as far as I can see.

I am not sure why they are listed as its really a terrible business ( hence the Ban Graham valuation ). I am not sure if DUFM plus the other two large shareholders would agree to a delisting unless good terms were arranged.

I am thinking of attending the AGM btw but I want to talk to a few other people first.

[davidosh] 25/1/2012 14:03

I do not have any shares but may be able to arrange for somebody to attend. Just out of interest and looking at the downside protection if the economy gets worse are there any significant property assets or lease liabilities within Titon and what is the pension liability situation as they do have a large number of employees ?

What is the benefit of the listing and could there be a push to delist at some stage to cut costs ? It looks to me like family members and friends have around half of the company so it would not take much to get a vote through.

[liarspoker] 24/1/2012 21:35

Anyone going to the AGM on the 21st Feb ?

[liarspoker] 23/1/2012 22:04

Thanks Dave.

Do you think that TON is sitting on excess cash ?

If so should some of it be released to shareholders ?

If so how ?

:O)

[dab26] 23/1/2012 21:43

Hi LP.

There was some discussion of this topic on the Motley Fool Value Board a few weeks ago. Here's the link:

Hope that helps clarify the situation.

Very best

DB

[liarspoker] 23/1/2012 21:35

Just found out that Simon Knott, fund manager of the discretionary unit fund, passed away last November. I wonder who heads the portfolio now and what their plans are. DUF own just under 20% of TON.

[liarspoker] 17/1/2012 18:37

2p dividend / 35p share price = dividend yield of 5.71%.

Tasty. :O)

[liarspoker] 16/1/2012 12:21

TON on the move again plus a nice 2.8% divi coming up next week:

Reflecting the reduced Earnings and the difficult economic outlook, the Directors are proposing a final dividend of 1.00p per share (2010: 1.25p). This, when added to the interim dividend paid on 23 June 2011 gives a total for the year of 2.00p (2010: 2.25p). If approved by shareholders at the forthcoming Annual General Meeting, the dividend will be payable on 24 February 2012 to shareholders on the register on 27 January 2012. The ex dividend date is 25 January 2012.

[wad collector] 12/1/2012 21:11

The spread on these minnows is always off-putting unless some news gets the volume up.If the company has survived the last couple of yrs in the building trade (albeit just) , it is probably safe now.I hope.Not one to bet the farm on , unless you are a trader who can lose someone elses farm and still get a bonus.

[liarspoker] 12/1/2012 19:57

Someone got 3K @ 34p today.

[neeps] 12/1/2012 13:17

That was online with SVS who I use all the time as trades are £5.75 & usually no problem with spreads. Last lot I got 1/2p lower than the offer price but have just tried again & still 40p. Not in a position to deal by phone.

[liarspoker] 12/1/2012 10:33

Was that online or through phone ?

Edit: Offer is 34p and you can usually buy inside the spread. Perhaps a change of broker is needed ?

[neeps] 12/1/2012 09:21

Tried to buy just 3000 of these this morning & my broker wants 40p!!

[liarspoker] 11/1/2012 13:15

Looks like the 25K the other day cleared available stock. The 6.5K today edging the price higher. Should be good fun if half decent results are released. Whoosh. :O)

Ex-divi at the end of the month as well ( 3% Interim ).

[hugepants] 02/1/2012 20:04

I got some after the results. Great value share, priced at one third of NAV and still profitable (just!).

Share price = 31.5p. Market cap = £3.3M
Cash = 27p per share
Net working capital = 55p per share
Freehold property = 23p per share
NAV = 95p

1p final dividend (2p for full year) payable if on register on 25th January 2012

[wad collector] 08/12/2011 11:47

Managed to buy a few now at 32.Someone sold 25000 at 26p at market opening , no other sells , I supect they regret it now .
I didn't think the statement is that bad.


.This has been a disappointing year following the modest post recession recovery achieved in 2009/2010. Trading conditions have worsened markedly throughout the majority of the period as economic conditions have again deteriorated sharply - resulting in lower gross margins being achieved.

The financial year actually began strongly, building on the momentum established towards the latter part of the previous year. As we entered the winter period we were cautiously confident that our key UK and European markets would continue to grow and that the worst of the recession was behind us. However, the very harsh winter weather followed by the sovereign debt crisis in many European countries changed this situation dramatically.

[wad collector] 08/12/2011 11:37

I just tried to add when I saw the spread had narrowed , but no stock.

[wad collector] 08/12/2011 09:29

08 December 2011

Titon Holdings Plc

Preliminary Announcement for the year ended 30 September 2011

Chairman's Statement

FINANCIAL PERFORMANCE

Net Profit before Tax for the year to 30 September 2011 has fallen significantly to GBP34,000 (2010: GBP606,000), on Revenues 2.5% higher at GBP16.0 million (2010: GBP15.6 million). A UK corporation tax credit and a reduction in the Group's deferred tax provisions have, with other factors, resulted in an overall GBP155,000 income tax credit for the year (2010: charge of GBP199,000). The resulting Profit after Tax for the year is GBP189,000 (2010: GBP407,000) and the Earnings per Share is 1.62p (2010: 3.85p).

Net cash balances at the year end were GBP2.85 million (2010: GBP3.11 million). Total capital expenditure acquired out of cash during the year was GBP735,000 (2010: GBP496,000). GBP202,000 of this expenditure relates to investment in hardware and software for a new ERP system to be introduced in the first half of 2012. In addition to this, GBP206,000 of intangible assets were funded by the issue of shares in subsidiary company, Titon Korea Co. Ltd (2010: GBPnil).

Reflecting the reduced Earnings and the difficult economic outlook, the Directors are proposing a final dividend of 1.00p per share (2010: 1.25p). This, when added to the interim dividend paid on 23 June 2011 gives a total for the year of 2.00p (2010: 2.25p). If approved by shareholders at the forthcoming Annual General Meeting, the dividend will be payable on 24 February 2012 to shareholders on the register on 27 January 2012. The ex dividend date is 25 January 2012.

On 31 August 2011 the Group issued 124,950 new shares in its South Korean subsidiary Titon Korea Co. Ltd. These shares, representing 49% of the enhanced equity of Titon Korea Co. Ltd, were issued to our joint venture partner, Browntech Co. Ltd. in exchange for intellectual property and goodwill as part of the original contract terms which were signed with them in 2008.

[orinocor] 21/11/2011 10:09

rainmaker is having a very bad time of it. Home Retail is down 30% at least since he bought. PVCS is also down big . TON is risky and he was buying at 50 pence.
bloodbath