Titon Share Discussion Threads

[rainmaker] 12/12/2013 10:25

Good luck,Martin, you've made your decision and you don't need to ask me what I think.

regards

[patviera] 12/12/2013 09:28

good figs
should be 70p relatively quickly

[shanklin] 12/12/2013 08:36

Have sold my 25k.

S.Korea looks good but the rest of the business sounds like its not having an easy time and I'm not sure the Nuaire exceptional should be incorporated in the non-exceptionals. The Graham ratio must be about 1 so its all about whether they can generate a return from the other elements of the TBV.

GLAH. Cheers, Martin

[gingerplant] 12/12/2013 07:42

Excellent finals; pre-tax of £505k, net cash £2.12m, NTAV >£8.8m, mkt cap £5.4m.

They report an improvement in UK consumer spending on such 'big ticket' items as windows and doors. Business remains mainly in the UK (75% of revenues) but the Korean business is growing like Topsy:

"The star performer for us has undoubtedly been our business in Korea, which saw an increase in revenues of 91.7% from £1.9m in 2012 to £3.7m in the current period."

The figures are favourably skewed by the £237k Nuaire settlement and without that, the UK operation made an operating loss. But with Korea doing so well and things showing signs of improvement in the UK (most business is in social housing and the election is 18 months away) this could still be very cheap given the cash and NTAV IMO. Looks like it should be more like >£1 / £11m given a fair wind.

[fozzie] 12/12/2013 07:39

I wish all Chairmans reports were written so well and plainly. An excellent and easily readable commentary on the results and the business.

[rainmaker] 11/12/2013 22:01

Thanks Mr T, that in a nutshell is what I've been banging on about. As I said before we're 28% below the 22 year average and half the figure of the 2006 peak. Roll on tomorrow.A further consideration is demographic and cultural changes. We have an aging population living longer and more people are living alone.I really don't £1 as a problem since I'm convinced that Titon, with a strong recovery in it's markets, will make returns in excess of it's cost of capital. Have you done a profit/turnover chart? It's a useful exercise.

regards

[mr. t] 11/12/2013 19:00

Rainmaker, thanks for the housing starts figures - all the indicators are that Titon's results will be good tomorrow.

The national house building council have a good quarterly report with detailed new home statistics:

hxxp://www.nhbc.co.uk/NewsandComment/Documents/filedownload,53637,en.pdf

It fits with the positive news from the ONS. Two other items in the NHBC report that caught my eye:

1. Even though new housing is being built, we're still a long way from the 2007 peak so there's plenty of room for further growth.

2. The percentage of homes being built that are detached or semi detached is increasing. Eg. 24% of new homes registered in q3 2013 were detached, the highest percentage since 2004. Detached and semi detached houses will be bigger and have more windows/need for ventilation than flats or terraced houses on average, which means more business for Titon.

[rainmaker] 11/12/2013 18:02

This is the piece I was looking for taken from the end of a post of mine on the Value thread number 5343 on 14/9/13-when I refer to today I actually mean 13/9/13


"Well today there were statistics released from the Office for National Statistics for housing starts which quite simply, were fantastic.There were big rises in orders for both public and private new housing for the second quarter which rose 19.4%, the largest rise since autumn 2010 and in volume terms of £4bln in orders, the highest since the fourth quarter 2007.This comes on the back of better than expected figures for July and figures for August which showed the fastest pace of growth for nearly 6 years.Overall year on year construction orders were up 32.8%.Predicting the timing of a share price rise of a Value share is notoriously difficult, nevertheless given the evidence of a strong recovery in housing starts,I confidently expect Titon's share price to do very well in the next 4 months but we shall see."

[kombimatec] 11/12/2013 17:35

Nice buy reported

[rainmaker] 11/12/2013 15:23

Mr T, if you have a chance look out for great figures on housing starts released in Sep? posted here or on the Value thread and copy and post here, please as I can't find them.

tia

regards

[rainmaker] 11/12/2013 13:07

For social housing new build registrations-



Historic figs for UK housing starts




But there are more recent and better figures somewhere but I can't find them for the time being-



I think they should be here but I can't find a synopsis of the newspaper piece, I've put on this or the Titon thread-

[rainmaker] 11/12/2013 12:45

Mr T, if you search through recent posts on this thread, you'll see recent stats for UK housing starts from Office of National Statistics AND new social housing build registrations from NCB.

regards

[mr. t] 11/12/2013 12:20

I agree Rainmaker. The autumn statement had some positive news for social housing too:



The Chancellor, George Osborne, has announced a series of measures designed to increase the supply of homes.

He is changing rules to encourage councils to sell expensive properties and build more homes on cheaper sites and is raising the amount it allows them to borrow for building by £300m.

Separately, up to £1bn will be made available to unlock private developments that have "stalled".

He says that will eventually mean 250,000 more privately built homes.

[rainmaker] 11/12/2013 11:28

Thanks Mr T, I really think that the Investors selling this share on monday have been told (and believed) that there's no point in looking at your hand ie not bothering to explore a Company's underlying business, its trading history, products, competitors and markets. IMHO they don't seem to realise that Titon is on the cusp/edge of going from a Company rated at a big discount to a collection of its assets to a profitable business.It's sad.

Mr T, Replacements figures are fine but the real growth story here, is a dramatic increase in recent social housing build registrations for their window and door fittings business-there're market leaders and obviously you supply more of these for a new Property than just replacing ones in existing properties that are damaged and likewise, the recent large increase in housing starts for ventilation systems. Suggest you check previous posts on this thread.It is lack of new builds both in private and public sector that has meant depressed levels of building activity over the last 4/5 years-historically there're 48% below the cyclical peak in 2006 and some 28% below the 22 year average.

DYOR, AIMHO


regards

[mr. t] 11/12/2013 10:46

Here are year on year growth figures in 2013 for window and door replacements in domestic properties according to FENSA (who represent about 90% of the market):

2012
Oct +8.9%
Nov +1.9%
Dec -9.2%

2013
Jan -10.6%
Feb -1.5%
Mar -3.9%
Apr 11.3%
May 2.9%
Jun 12.0%
Jul 9.9%
Aug 5.5%
Sep 13.2%

Titon's last interim results were for Oct 12 to Mar 13, whereas the finals released tomorrow will include Apr 13 to Sep 13 too. I think these stats and the trend of them are a further indicate that the results will be good and the outlook even better.

For info, the source of the above numbers are:

hxxp://www.fensa.co.uk/pdfs/installer-pdfs/Quarterly%20Stats.pdf
hxxp://www.fensa.co.uk/pdfs/installer-pdfs/FENSA_newsletter_May2013.pdf
hxxp://www.fensa.org.uk/pdfs/installer-pdfs/Jul%2013_INSTALLATIONS%20BOUNCE%20BACK%20IN%202ND%20QUARTER.pdf
hxxp://www.buildingtalk.com/Journals/2013/11/22/h/v/y/FENSA_Report.pdf

[mr. t] 06/12/2013 15:07

Below is a user review of a Titon system and a bb discussion comparing a Titon product to an Airflow one. These are anecdotes that I don't read much into, but they do give me confidence that Titon's stuff is good.

I'm looking forward to the results now. I think they're going to be way better than the market expects, with a very strong outlook to boot.

Cheers,

T



hxxp://wbecohouses.blogspot.co.uk/2012/09/mvhr-householders-experience.html

Here's Michael's review of his MVHR system to date.

TITON - HRV-1.75 Q+ unit"

"Having installed this newly introduced unit 12 months ago, I am extremely impressed by the performance achieved to date..."

hxxp://www.greenbuildingforum.co.uk/newforum/comments.php?DiscussionID=10804

"I've got a couple of quotes in for MHVR units. The units the two suppliers are proposing are

Titon 1.75Q plus
Airflow Duplexvent BV400

What are the specs/features I should be comparing on these and does anyone have any strong positive or negative comments about those two units?"

...

The Titon 0.42/0.49 and 90% and then performs worse than the Airflow as the number of rooms increases.

Airflow looking like the better unit, probably as it's newer (the Titon has been around for 3 years).

So not much in it but the Airflow looking slightly cheaper as well right now.

...

"Simon, the two units selected are both good performers, the Airflow unit has the edge for larger house size and the Titon for smaller houses, so it depends on the size of your house / number of wetrooms."

...

"Interesting. The Allergy Plus site has some DupluxVent models but I'd assumed these were Airflow branded. That now makes more sense.

It's actually Allergy Plus who are suggesting the Titon.

[rainmaker] 05/12/2013 21:08

Some choice quotes from the article below. Note that it was written in June this year before the raft of good figures on housing starts and new social housing new build registrations were released.

"The UK air-conditioning market is directly linked to trends in commercial construction."

and "One notable trend in the last few years has been the increase in sales of heat-recovery ventilators installed with VRF systems to allow fresh-air ventilation in new build and major refurbishment project to comply with Building Regulations."




and a nice summary below of why we need ventilation heat recovery systems although I doesn't delve into cost savings too deeply.





For anyone confused by the acronym VRF



regards

[rainmaker] 05/12/2013 20:47

Hi Pat, I don't know dwha. I'm an out and out Stockmarket Value Investor so 99.99% shares are off my radar and therefore not under consideration, as ruled too expensive.I want to buy stakes in financially sound,strong business franchises at rock bottom prices unavailable in the private market.However if I were starting a new portfolio now then at current prices, I would buy the following-

Titon(TON) obviously despite it's recent rise. My average holding price is a lot lower than current prices.

Art and Antiques Dealer and part exhibition owner,Mallett(MAE)currently 73/75p

China's largest Orange producer, Asian Citrus Holdings(ACHL) currently 19.75/20.00p

Bank note and document verification specialists,Spectra Systems(SPSY), currently 27.0p/29.0p

Fashion Retailer, French Connection(FCCN), currently 37.5p/38.5p

and that's it, I think.

regards

[patviera] 05/12/2013 12:17

Thankyou rainmaker
what are your other favourites>?
do you follow dwha?i love that one

[rainmaker] 05/12/2013 12:14

About us

Titon is a leading UK supplier of Ventilation Systems and Window Hardware with a reputation for quality products and high levels of customer service. Formed in 1972 by our present Deputy Chairman, we currently employ over 160 people, mainly at our Head Office in Colchester and at our state-of-the-art manufacturing base at Haverhill.

Titon remained a private Company until 1988, when we floated on the (then) Unlisted Securities Market. In 1992 we became Fully Listed on the London Stock Exchange.

Building on our long-standing position as the leading UK supplier of background ventilators, we now supply a comprehensive range of ventilation systems, both passive and powered. This opportunity for organic growth has come about through changes in the UK Building Regulations which are driving up the air tightness standards for buildings. This in turn has introduced the need for innovative low energy mechanical ventilation systems, of which we have some excellent products and for which we provide a comprehensive design service to our customers.

As well as a strong presence in the Ventilation Market, we are a leading supplier of Window and Door Hardware and market our own distinctively designed window handle ranges in addition to a comprehensive range of hinge and security locking systems.

Exports account for 20% of our business and we supply our products to a range of overseas markets. The USA market is supplied through our wholly owned subsidiary, Titon Inc. and we have a Joint Venture operation in Korea where we also have manufacturing facilities. We have appointed distributors within most other major world markets. Our policy is to work closely with those distributors to effectively market our products and to support them in providing the high level of service synonymous with the Titon brand.

For information on our products and services, visit www.titon.com

[mr. t] 05/12/2013 11:42

Thanks for your comments Rainmaker. I think its a good sign of Titon's technology and management that Nuaire copied their patent, Titon picked Nuaire up on it, and Titon won a settlement. Although Nuaire brushed it off and said the dispute related to old products.

Have you a view on Titon's products and competitive position compared to other competitors? E.g. Polypipe, PAUL, Airflow?

I've tried to find market share data but haven't had luck yet. I've also tried to find conversations on specialist ventilation bulletin boards that may give independent expert views of the companies, but so far I've found little that helps. If you've any insights I'd be grateful if you can share them.

The cheap valuation combined with recent economic trends is the main attraction here for me, and that's why I invested, but I always like to try and find a bit more about the company and its markets to help inform the investment case. In the case of Titon I still feel a bit in the dark.

[rainmaker] 05/12/2013 01:52

Well, Mr T, there's a much larger competitor called Nuaire based in Caerphilly, Wales who they took to court in a patent infringement and design action and forced them to withdraw a popular and critically acclaimed X-Boxer MVHR product and received a £200k+ settlement.I don't know too much about Nuaire other than they are much larger and they were bought by Electra for £70mln in 2007.You're absolutely right that despite difficult trading conditions over recent years, Titon have maintained their R&D spend.

There's no question in my mind that MVHR is an important product for Titon since tests have shown that it can reduce heating energy use and a building's carbon footprint by up to 58%(and meets the upper eschelons of the UK Government code for sustainable homes)but only when fitted in a modern air buildings(now you see the importance of a sharp rise in housing starts). In an increasingly pollution and energy conscious environment it has to be a growth market. The product is manufactured in a lower cost base in South Korea, opened in 2008 but so far has not made too much of an impact since demand for this product has been poor due to the low level of building activity-I checked the new build figures over the last 22 years and we're currently 28% below the average and some 48% below the cyclical peak in 2006.

For anyone unfamiliar with MVHR, it stands for Mechanical Ventilation with Heat Recovery and works by extracting the air in a room and removing the heat via a heat exchanger and transferring it into the incoming air.

Hope that helps.

regards

[mr. t] 04/12/2013 23:18

Hi Rainmaker, what makes you think Titon's mvhr will be profitable for us shareholders? I like ton as an investment due to its fundamentals and recent economic trends, but I'm sceptical of mechanical ventilation heat recovery systems (have you seen the negative press?) and I'm sceptical of Titon's competitive advantage (Ton say they have strong r&d, but what differentiates their products from competitors - I think not much).

Don't get me wrong - I think Titon is a good investment, but I've seen nothing that suggests they have any kind of strong competitive advantage or must have product.

Please prove me wrong...

[rainmaker] 04/12/2013 21:29

Hi Patviera- I don't really have one but it's worth at least 78p which is net tangible asset value since it's obvious from the official figures released recently that the Company will earn a return on those net assets in excess of it's cost of capital.The business is undergoing a transformation from a collection of assets trading at less than their liquidation value as it reminds Investors that there is a good business attached to those assets with a promising future after a difficult 4/5 years.

I know the Company really well not just in terms of it's underlying business,it's trading history, it's competitors and markets but also it's products for which there will be increasing demand due to their strong green credentials ie energy efficiency-google MVHR. I have some ideas on how far the share price will go and it's substantially north of current levels.I'll mention one way of looking at the potential valuation-if we take Titon's current price to sales ratio and then conservatively upwardly adjust it to match that of the average listed Company even though Titon have much better growth prospects and almost certainly better margins now we are returning to more normal levels of activity.

Instead of giving targets, my best advice would to be to strongly consider running your holdings for at least a further year preferably a further 2/3 years to derive the maximum possible benefit.Give the share price a chance to reflect it's transformation from a Company trading at less than it's liquidation value to one valued as a growing business. Trust me,the Investors who make the real money in the Stock Market, aren't the day traders or short term investors but those who buy and hold.

I've put a link to my "Value Share" thread below where it's had more than few mentions because it's a good example of a "Value" share.Don't expect to read about flaky AIM Companies or highly speculative resources stocks, as we're only interested in buying £1 coins for 50 pence pieces, on the basis of known facts and definite prospects in financially sound yet very lowly rated proven business franchises with substantial in-built margins of safety.






regards

[rainmaker] 04/12/2013 19:54

Hi Kilt, hope you're well and if not then I'm sure you'll be feeling a lot better today! I saw the manufacturing figs, 8 consecutive monthly rises and the largest fig since Feb 2011.IMHO there's a great deal more to come from Titon

best wishes

Rain