Tp Share Discussion Threads

[swerves1] 19/4/2016 21:53

Is Pavey deserting a sinking ship! He has history for this

[cerrito] 19/4/2016 16:46

Good that they had a cash generating H2 which gave them £7m in cash and the ability to write a pretty robust Going Concern Statement and for the forseesable future it seems we do not need to be worried about need for an equity raise. Note that this cash increase in H2 was despite a decrease in Current Liabilities which went down by £0.9m –recognize that we need to see the details in the AR. I see that Trade receivables went up from £6.4m to £6.9m in the half and note comment that January was a good month for receivables collection.
Also in H2 their gross profit was £3.4m-by comfortably the largest gross profit in a semester since I started tracking them in 2011 and they also managed to produce a pre tax profit. I also note that they made an adjusted ebitda profit of £1m in H2. I did compare the P&L with the September 15 forecasts Edison gave us and rather disturbingly the pre tax loss at £2.2m was greater than what Edison forecast at £1.7m on an IFRS basis…be interesting to see if Edison come out with a commentary.

Agree with all other comments on the mushiness of the wording of the prelims; the need to look at the Goodwill sections of the AR and slight irritation that they have once again rejigged their segmental analysis. I also take the point that 60% of revenue accounted for by three customers. I assume one is DCNS, the second either or both of the RN/BAE and the third a S E Asia Navy…not ideal but it rather comes with the territory.
Will be interesting to see what comes out of the HAYT connection-I am in HAYT_ I guess not much and the Spirax connection seems to have gone quiet.
I have no intention of selling; have quite enough at the moment but if it does weaken more may have a modest top up but worth a good look for those with little or no exposure.
Trust you have all put the AGM as per Note 8 in your diaries.
PS was reminded of their EU funded project in energy storage which struck a chord as ITM announced today their involvement in a EU funded project not for storage per se but for optimizing renewable energy.

[chorister] 19/4/2016 15:51

Kiwihope:

You challenged - rightly - my abbreviated post about this being a turnaround. I've actually been involved in quite a few turnarounds, and at the very moment am trying to sort out an unquoted company.

There are various stages, the first of which is to stop any operating cash burn. As you have identified, they seem to have done that - I can't be bothered to work the numbers, but they may in fact have done better than that, and been operating cash positive in 2H.

You've then got to get the organisation right, get the right people in the right positions, and sort out customer service issues. Again, it looks like progress has been made.

All that is within their control. What follows is much less so - actually getting orders. My guess is that it will be another year before we really know for sure whether there is a profitable market for what they - but if there is, then I think one will look back and see the company as very undervalued today.

[the prophet] 19/4/2016 15:49

sorry P the O, I don't post to anyones instructions or orders, thank you very much, and will continue to post as I see things.
If you don't like that please use the filter facility.

[kiwihope] 19/4/2016 15:39

I find myself (in Pavey's absence) in the unusual position of having to present the bull case for TPG. Now my bull case is nothing like as bullish as I think Pavey's will be. But I do think some recent posters are being too pessimistic. I'm not going to moan on about Cartmell and his supposed value destruction. That is all in the past (I could ramble on for ages about this but what's the point). I'm looking at where are now and the future.

I am no fan of EBITDA. But it does have a place for a company like TPG which is approaching profit break-even. Because EBITDA doesn't include the non-cash costs of depreciation and amortisation it is a rough indicator of operating cash-flow, not being affected by year-end timing of trade creditors and debtors. And the first target of any company is to achieve cash-flow break-even, because this means the company is not going to run out of cash soon and has much more time to reach the next milestone - profitability. I think some posters are not valuing enough what EBITDA break-even means to TPG. Providing management are sensible and trading continues to be steady, they should not run out of cash. This is the first time I have been able to say this in 16-years!

The next challenge is to achieve after tax profits. The defence businesses are nicely profitable. I just hope that management see that the other two loss-making business are able to achieve profitability. There is now more time for this to be achieved (the real benefit of being close to cash-flow break-even). I don't know when or if this will be realised but I'm prepared to give management a bit of time.

My last comment concerns valuation. The market cap is £13M but TPG has significant positive net current assets. If we regard trade receivables as a cash equivalent, the enterprise value is only £8.1M (13M+8.5M-6.4M-7.0M). For a cash-neutral company with £20M sales and the possibility of £1M-2M profit in a few years, I think this valuation is undemanding.

Of course things may go wrong but weighing these things up, I think I will continue holding.

[pavey ark] 19/4/2016 15:28

Kiwihope, I don't know why it is but I always expect better than this from you.

Anyway, I've been out until now and having missed the deluge of drivel from the usual suspects (not everyone) but I had a quick run through and I saw your post.
The submarine business is very strong and generated an EBITDA of £3m and they are pretty sure that a big UK order (Trident related ?)and other will come through in 2016.
This business is "lumpy" and the original Hunt Submarine business AVERAGED £1.95m the two years before being sold.
TPG has produced a 12% compound growth in this business over the last four years.

To quote a £14m market cap without pointing out a £7m cash pile is rather naughty but I notice some half wits are trying to suggest the need for cash raising at least you didn't go there.

The four unit idea is to my liking as it separates out who is producing or losing the cash and I imagine it is not a big deal for the accounts department.
The Managed Solutions is set to be a very big driver of profit but not surprisingly it dipped while the new system and procedures were put in place but I expect great things from this unit.

The Scottish press recently announced that the Grangemouth refinery was setting up a second production line and was very much on the up and up as it could now import cheap US gas and liquids.

I know that you were sceptical at the time but you will see that the company was EBITDA neutral for the year so produced an EBITDA of over one million in H2.(I know that there was an exceptional charge but I would certainly take any number of these if they could produce the saving and returns that this one did).

As I said in my earlier post I wanted to see how they got to the £7m cash mark but a look at the results will show that things are very,very sound in the cash department.

This company has undergone a complete reorganisation,improved the EBITDA by over £2m, effectively stopped cash burn and has set itself up to continue and exceed this performance this year but I see you do concede that improvements have been made.

I see that you averaged down here at under 3p earlier and I certainly hold shares here so I can only assume that on sober reflection you had seen the merit of investing here.
What does surprise me is that you can't see the progress being made or perhaps you do but want this to take place at a greater pace.

Regardless of peoples individual political views it was only in MAY that the Conservatives won an overall majority and this ensured that Trident would go ahead AND there would be a massive change in the MOD procurement etc.

Obviously Trident is a big deal for TPG but so is the changes in the MOD and that's why I'm happy to see a separate Managed Solutions unit created within TPG and I suspect it is because the management sees it as a very important and valuable unit on its own.

My only disappointment was that there was no news of an acquisition as the market is giving absolutely no value to the cash but there is the fact that a great deal of management time is going into setting up the new unit and some of the cash may be going there.

Anyway I intend to follow your lead in one respect, my posts will be few and far between here as another BB bites the dust.

Good luck with this and any other investments you have.

PA

[the prophet] 19/4/2016 15:28

you very rude Octopus, please yourself.

Makes perfect sense to me, investors have got bored waiting for clever Phil to deliver some value here, but give the guy a chance, 6.5 years later and £38m down the swanee, perhaps he needs a bit more time and money.
Wonder how much PC and chums have lifted in that time.

Don't worry ricardo, I'm sure PA will turn up soon enough, all bluster and 'trolling' remarks to the fore. He doesn't like an alternative view on a discussion board, does he! I can hardly wait.

[zcaprd7] 19/4/2016 15:27

Well pitched if you wanted to, say, do an mbo?

[ricardo125] 19/4/2016 15:25

Yes in the sense that the company is not doing as badly as last year. Not sure if that's an argument though for investing any more money in it.Not sure how you would pitch that at a share investor meeting. "This company's been doing rubbish for years but you'll be pleased to know they are less rubbish this year. Please invest"

[ricardo125] 19/4/2016 15:13

We've heard a lot from the bears today was hoping someone with a bull case would make the argument for TPG. Personally i was expecting a lot more from the results, very disapointing, should not be surprised though. Can't ever remember a year when they have done well.

[the prophet] 19/4/2016 15:10

dear Mr Octopus, you can read the factual results as well as I can.

We can all take a view on what that means for the future, paying due regard to managements 'achievements' to date.

I am less then impressed,if you feel the opposite, fine with me, then this should look like yet another 'opportunity' in a long list of 'opportunities' provided by clever Phil and his merry band.
Can't wait till the AR comes out and we see how much management sucked out of this pile of loss making bits and bobs.

[cliffpeat] 19/4/2016 14:29

As an ex holder and particularly in the light of these results, I am happy to have bitten the bullet and taken the loss last May at 4p.

Just a few more pointers to the challenges ahead:

1. Group trade debtors are 30% of the t/o

2. Just 3 customers account for 60% of t/o

3. EBITDA is not, IMO (and perhaps Warren Buffet's) a useful measure of the progress towards real profitability - particularly as it looks like they intend to grow by acquisition (and the probable heavy investment in intangibles).

4. The Group net loss was about £2m and the Parent company about £7m - why so much in the parent? Either it is not clear from the report or I just haven't got the brainspace at the moment to work it out. (Something to do with provision against long term inter-company loans I think)

5. Of the total non-current assets (£15m) nearly all are intangible (£14.5m)

OK, the market may have factored some or all this into the share price - but the outlook and timing of achieving real sustainable profits and growth is still uncertain.

Good luck to those who have confidence in the management - I am rather inclined towards TP's views regarding the VFM of the top guys.

[shoulds] 19/4/2016 14:22

How main invester share amounts have changed from Jan 2015 to Jan 2016
M&G shares remain the same 2015 to 2016
L & G got rid of 11milion
Hargreaves Hale added 0.5m
Octopus got rid of 0.25m
Hargreaves Lansdown added 2.2m
Walker Crisps added 2.7m
Barclays same
Halifax same

[paul the octopus] 19/4/2016 13:46

you guys should try harder to at least be consistent with your previous posts, an agenda without consistency looks so poor indeed

[ricardo125] 19/4/2016 13:15

The way i see it Octupus is that while you are correct in that we are generally discussing whether the business is worth 5m, the share price imo has a greater chance of heading to 1-2p than it does 5p until this company has proved it can break even and will become profitable.

[bullster] 19/4/2016 13:14

Brewin Dolphin Ltd are selling some at present, sold about 28% of their holding in the last 6 months, 4 million left.

[supernumerary] 19/4/2016 13:13

Paul (and timo) - we're commenting on the company, its management, and its prospects. You're commenting on other posters. Why don't you join the real debate?

Edit: I see you did! Well done! ;¬)

[paul the octopus] 19/4/2016 13:04

£7m cash in bank, £12m mcap, so everything u keep bashing about is just £5m, capish?

[paul the octopus] 19/4/2016 13:02

let's see what directors say afterwards :)

[ricardo125] 19/4/2016 12:58

? What did you expect it is results day!?