Titon Share Discussion Threads

[kiltrock] 13/3/2011 17:47

On checking over Titon with Stadium I have noticed Stadium sold the general plastic division to Flambeau for 2.5m. in June 2009 this had a t/over of 11.3m against an operating profit of 0.8m to the end of Dec. 2009. This general plastic building industry is an low margin business in which we have all these competitors Ubbink, Stadium, Timloc, Ryton, Glidevale and Manthrope. No economic moat here for Titon.

In his 2010 annul. report the chairman stated "back to profit after two years of losses in the aftemath of a gobal recession" Mr. Chairman, we are still in it. He further stated - "trading conditions subdued".

I copy and paste last months statement from the National Housing Federation - Updated February 2011 ..... AS FOLLOWS

The recession and new investment framework has created a challenging climate in which to build, whilst rising unemployment, a deep freeze in mortgage lending and the lowest rate of peacetime building since 1923 means the need for new affordable homes has never been greater. Despite this the housing association sector remains committed to providing the maximum number of affordable homes and is ready to work with government and its agencies to achieve this. The sector has an unrivalled track record of securing private finance to support public investment and wants to continue to build on these strong foundations of committing its own resources in the new funding world. END

In spite of all above this company is well run with the directors holding 25% issued share holding with others holding 37% which all bodes well and good value underlying. the group manufactures 64% of the products it sells. it also has this MHVR unit which I think its only direct competitor is Ubbink's HRV unit which recycles existing moist air from bathroom etc back into the house. Question - will I buy, Answer - not yet. Rainmaker, am I too cautious? Kilt.

[kiltrock] 09/3/2011 09:14

Rainmaker - not forgotten - I spent last night reading up and comparing Stadium with Titon. Stadium does have t/over three time that of Titon. However Titon as you are aware is a well run company, I also found concerns which I'll address shortly. you are dead right, I want to buy them lower. These other companies i could not find accounts and just had to compare with Stadium.
regards

[rainmaker] 09/3/2011 08:45

Kiltrock-how's the research going?Looking to buy more sub 50p.

regards

[kiltrock] 04/3/2011 14:37

Just a short update, Titon do indeed have a direct competitor to its MHVR in Ubbink's HRV unit, this does look like serious competition. However do not have time at present to look further into this till tomorrow afternon. for the general run of the mill domestic products Titon produce the following are competitors -Ubbink, Stadium, Timloc, Ryton, Glidevale and Manthrope with poss other ones about?

I will look forward to replying to you both tomorrow.

[brwo349] 04/3/2011 06:11

and it gets even worse

As 74% of the Group's revenues are earned in the UK, it is the prevailing conditions within this market that will largely determine our performance over the rest of the financial year. Even after allowing for the adverse weather, the pace of recovery appears to be slower than anticipated.

[brwo349] 04/3/2011 06:10

Hello kiltrock
Im glad that at last there is a sensible investor here. I think you are right to be wary. There was a clear profit warning in jnauary

The very severe UK weather experienced during December has had a detrimental impact on UK construction activity and, consequently, on our sales and profitability during that month. This lower level of activity has continued into January.

[rainmaker] 03/3/2011 22:05

Kiltrock-re goodwill,you've no doubt noticed that the Investors Chronicle give net asset value for a Company ie total assets less total liabilities on the balance sheet then gives another figure for net asset value less intangibles ie less goodwill which gives you tangible net asset value.

I remember looking at Helphire(HHR) recently and comparing it to Mallett(MAE) and both were supposedly trading at just half of net asset value. However when we removed intangibles ie goodwill, Helphire was trading at just net asset value and Mallett was still trading at half that value.For anyone not quite sure what I'm talking about- you remove intangibles ie goodwill from net asset value to get TANGIBLE net asset value. Many Investors prefer to deal in tangible net assets value since it mainly deals in tangible fixed assets such as Plant, Property, Machinery, Land although there may also be deferred taxation. Goodwill is created when a company buys another at a premium to net asset value and it is that premium less any "fair value" adjustment that ends up on the acquiring Company's balance sheet.This goodwill is subject to an annual impairment test.

regards

[rainmaker] 03/3/2011 21:34

Hi Kiltrock-thanks for the reponse. Sorry I did not have time to reply yesterday.General opinion is that management are honest and competent.It also helps that they own a significant percentage of the shares-thinking of Buffett's owner like care.Company have a reputation for engineering excellence and good research and development. They opened their first foreign manufacturing plant in 2008, a joint venture in South Korea where they have invested a further £500k over the last year(and still have £3mln net cash) to deal with higher volume of business so I believe it's reasonable to assume they are very confident of prospects there.It recorded it's first profit second half 2010 and broke even of the year. Sales at £1.5mln in 2010 were up 131% if I remember correctly.I believe this and MVHR makes this a buy particularly when you remember that they are trading at a discount to their minimum liquidation value of 60p as measures by Ben Graham's net working capital measure(for anyone not familiar with this technique-go to the Company's balance sheet, ignore fixed assets then take current or liquid assets and subtract total liabilities).However I believe it's quite possible the share may fall further short term maybe to low to mid 40s simply because of Investors impatience. I'm waiting patiently to buy more.I'm sure that with all factors considered sales and margins will recover strongly.

I understand that Titon are an acknowledged pioneer of MVHR in the UK and market leaders.

regards

[kiltrock] 02/3/2011 21:25

Thanks for the reply rainmaker, I do watch my "step" before I invest, due to holding down a demanding job,I am short of time for proper research. however today I did look further into this MVHR unit and I need to correct one aspect. the term "air source" I used above in post 107 is not accurate, this unit combines ventilation and reclaims the existing heat from other rooms in the house, not quite a air source unit. for example an air source unit to heat a house cost approx 8k and a ground source about twice. this unit comes into it own where new building regs were introduced in England and Wales 2 to 3 years ago and in Scotland this past Oct. once buildings are made more airtight this unit will come into its own.

At present Titon do not use approved installers, these are fitted ad hoc by mechanical engineers?? and from feed back, not at times well. the comp. is looking at appointing fitters who have been trained. The other points to note is competitors are catching on and I'm looking forward to seeing more inventions from Titon.their is at least four other comp. chasing this type of building ventilation market, I missed Manthorpe in post 107.

For my part I have not invested yet as I think this may go lower due to the present economic climate, but wary of the increase attention this product will attract. if Titon get their sales office to bring this to architects attention, I'm sure this unit will sell and I also hope realiability is not an issue. Tomorrow I will conduct further researh on who stocks Titon and how readily accessable their products IS in the market place. Maybe Rain. you could tell me a bit about the company management??

While looking up the finance side I did note the low figure for goodwill and in this tough climate, management needs to control costs.

Many regards to you.

[rainmaker] 01/3/2011 23:49

Kiltrock-another thinking Investor!It's crazy, shareholders are selling shares in Titon(TON) a perfectly good and profitable Company with a bright future at less than the Company's liquidation value.There were over 15k sold today at between 50p and 50.5p.Unfortunately, or rather fortunately for me,Investors are seemingly obsessed and blinded by short term moves rather than the long term value of the business.

As you say, they have just under £10mln of TANGIBLE(ie Plant, Property, Machinery, Land)net assets(there's just £221k of goodwill) and the current market cap is £5.5mln with over half that covered by net cash.Titon Holdings are an acknowledged pioneer and a market leader in MVHR in the UK where demand is forecast be strong over the coming years as we strive for zero carbon emissions and play catch up with the Scandinavian Countries.This hot "own" product(rather than one distributed)together with their first ever foreign manufacturing plant in lower cost South Korea, opened almost 3 years ago and now profitable, means they will get growth and higher margins. It's interesting to note that for the first time in many years, Titon are giving a breakdown of their own products v those distributed, IMHO they are confident in the growth prospects of their own higher margin products.

regards

[mattjos] 23/2/2011 16:59

not a holder here but got an invite to ECOBUILD 2011 from Titon ... new products to be unveiled

[wad collector] 10/2/2011 09:22

We all have our lemons.
I'm just hoping to get my money back here, having bought for about 80p 5yrs ago.

[brwo349] 22/1/2011 19:58

A reminder of what can happen when Rainmaker promotes shares

UNIQ(UNIQ) A 22 BAGGER IN NEXT TWO YEARS?!
Dec'08

[rainmaker] 20/1/2011 00:50

Rainmaker - 20 Jan'11 - 00:44 - 2602 of 2602 edit


Thanks ago,Joe. Titon Holdings(TON) is most definitely under the vast majority of Investor's radar. Went ex dividend today and the share price didn't budge. Closed at 58p bid, 65p offered but try offering at 60p and I'm sure the market maker will take your hand off!I really believe very few Investors have grasped the current situation eg growth in MVHR and growth in South Korea and fully appreciate the undervaluation here. I'm sure there will be plenty of Investors reading this who will just let the opportunity pass them by until the share price doubles.

South Korean isn't just about tremendous sales growth but margins. Manufacturing costs in South Korea are just half those in the UK. Titon have never had an overseas manufacturing base. In just 2 1/2 years,from a standing start,turnover has reached £1.65mln-approx 10% of group sales- an increase of 132% over the previous year. Having invested £500k last year in Korea,a substantial investment for a Company with approx £6.5mln market cap and £3.2mln net cash, I think we can safely say that the Titon board are very confident of further explosive growth in the region.Lets say that rate of annual growth in South Korea roughly halves to 66% that's still an additional £1mln of sales in the current year for a business that has already covered it's fixed costs.

Perhaps the clearest way to illustrate the undervaluation here is to state that if there is no further growth in the first half of 2011 v the second half of 2010 then we're trading on a p/e of less than 10-that's no growth in MVHR and no sales increase in South Korea-hardly likely?!Investors just need to research Titon and just draw their own conclusions but don't hang around, as IMHO we won't stay at current levels for very long.Trading update expected at the end of month(last year 29/1/2010)

regards

[wad collector] 18/1/2011 09:20

Seems to be ticking upwards again, though the spread is widening.

[cjohn] 14/12/2010 12:40

These are still trading at less than two thirds tangible assets and at a discount to current assets.

If you look at performance in the second half of 2010 only, they are on a single figure PE.

There's obvious value here: the main risk is the fragility of construction and housebuilding in the UK.

[wad collector] 09/12/2010 16:41

Interesting take on the product Rainmaker.Now lets see some more rain.Not snow.

[rainmaker] 09/12/2010 13:39

Some time ago I commented upon the green credentials of Titon's energy efficient ventilation systems. I'll have to check back but they made an acquisition believing that the Government that all new Properties would have to be fitted with zero carbon emitting self propelling ventilation systems where they have a strong market position. The Government then changed their mind saying that these systems were only best practice or recommended and not compulsory in new builds. The green angle of Titon makes this a very interesting hold. Unquestionably there is a trend towards energy efficiency and zero carbon emissions but more importantly this is an easy concept for Investors to grasp -emerging trends. This share could easily attract a stellar rating. That might seem incredible-boring old UK manufacturing Company disappears into the Phone Box only to re-emerge as Superman but I've seen happen time and again in a relatively short time period. One minute you cannot give the shares away and the next, Investors will pay any price.IMHO definitely one to hold. This could become hot.

regards

[rainmaker] 09/12/2010 12:35

Hmm, MVHR-opportunity for growth-see second paragraph


"Performance within the UK market, from where we derived over 80% of our Revenues (2009: 84%), has been particularly pleasing despite the general disarray in the UK housing market and the low levels of consumer confidence. We have achieved solid growth with our sales of both passive and powered ventilation products,which has helped us to improve efficiencies within our UK manufacturing operation."

"As expected, the UK residential ventilation market is changing rapidly as many developers realise the benefits of installing energy efficient heat recovery ventilation systems (MVHR). The growth in this market is being driven by the need to meet the upper levels of the Code for Sustainable Homes and will continue to increase as the Zero Carbon Homes initiative drives up building standards to even higher levels. Titon is now recognised as a major player in this fast developing market and was the first to design and launch the compact and efficient MVHR units widely used today. Our Research and Development team has been further enhanced throughout the year in order that we can maintain this market leading position and new additions to our product range will be launched in 2011."

regards

[wad collector] 09/12/2010 11:24

Sorry , I feel a certain irrational responsibility for the standard of grammar and spelling.
Actually , it shows how you can alter your entries here without a trace.Anyone can go back on a previous posting of theirs and alter it, to show how good they are at predicting the future, as I have just done!
Looks like I might finally get my money back here in 2011.

[pugugly] 09/12/2010 09:00

wc:. Touche.

[wad collector] 09/12/2010 08:51

Best not to read with your fist .But it looks like good news.Holding on.

I predict this will go to 56/58 bid/offer n one hour and 23 mins.