Tp Share Discussion Threads

[septblues] 19/8/2016 13:40

possible preparation for a token maiden dividend

dividend could be continued with adequate profit and cash flow coverage

possible (token) return of capital

indicates confidence in the future

the above could pressage a rerating if enough buyers believe

at current P/E's with the QE and interest experiments globally they're less likely to find earnings accretive acquisitions, which the above suggests is the case

[albo76] 19/8/2016 11:15

Still have my Training wheels on. Could someone kindly pls clarify what this will mean in real terms? Will the value of our existing stock also be reduced then? Thanks

[ricardo125] 19/8/2016 10:26

Still trying to digest what all this means.

[pavey ark] 19/8/2016 09:56

I can only assume that the institutions are on board and that this will go through without any problem.

One bit did jump out at me though:
"This milestone was a notable step on the Group's path to become a highly competitive Tier 2 engineering and services group (being a group occupying an influential position between major prime contractors and specialist technical providers)."

I have said, more than once, that this is will be the real driver of company profits in the future.

TPG marine (submarines) has been the star performer and has carried the company to where it is now and I expect this to continue with EBITDA from this unit rising year on year.

TPG Engineering together with TPG Managed Solutions look set to produce a real and significant boost to earnings.

When the above quote is considered with the very close ties with the MoD, the massive BAe and other large defence/engineering contractors it does make sense.

If we throw in their recently acquired "Fit for Nuclear" certification there does seem to be a very large market for an almost unique, niche business model.

Edit:
"Over the past two years the Group has made good operational and strategic progress, delivering proven solutions and services to customers. The Group's business is now organised to provide a full spectrum of through-life services to its customers, operating in growth areas in its core sectors of defence, energy and process industries. The Board expects that this approach will enable the Group to continue to develop commercially and technically through organic performance improvement, as well as through selected acquisition opportunities, whilst attracting, retaining and rewarding the best talent in its chosen markets."

[alchemy] 19/8/2016 09:56

So bought a few. Corac RIP

[1birddog] 19/8/2016 08:00

Must be about to confirm the MOD work

[1birddog] 19/8/2016 07:53

Proposed Reduction of Capital and Notice of General Meeting



TP Group (AIM: TPG), the specialist technology, engineering and managed solutions group, today announces proposals recommended by the Board to create distributable reserves of the Company and to reduce the nominal value of the Ordinary Shares. The reasons for this proposal are as follows:



· the creation of distributable reserves would allow the Company the flexibility to pay dividends and make other returns of capital to the Shareholders, should it be considered desirable to do so in the future; and

[pavey ark] 14/8/2016 08:48

from the year end results :

" Foreign exchange risk - the Group undertakes contracts denominated in foreign currencies (principally Euro and US dollar) leading to an exposure in exchange rate movements for both sales and purchase transactions. Where they cannot be offset, forward exchange contracts are utilised to minimise the risk."

My take is that the vast part of the costs involved in producing the submarine equipment is UK based and in sterling.
Obviously there is the MoD contract but the remainder of the order book is export contracts and in dollars and euros.

The note in the results suggests that the current contracts would have been hedged (100% or less?)the fact remains that if they were selling a purification unit for $1.5m last year they received c. £1m but if a new contract is completed now they get c. £1.15m for the same unit.

(same sort of idea with any european deals).

The profit margin on this part of the business is c. 25% so we see a significant increase if deals are now fixed a the new exchange rates.

I've never been involved in this sort of thing so obviously I'm open to correction or additional info.

[chickenrun1] 10/8/2016 13:30

hxxp://www.sharesmagazine.co.uk/video/simon-kings-executive-director-of-tp-group-tpg

An interesting video of Simon Kings I have found today. He mentions a large customer Spirax Sarco Engineering that TPG supply.

Rather good results today from them by coincidence.

[tday] 08/8/2016 18:41

I have just re-read the recent RNS and whilst it isn't yet an order, the RNS states that a contract could be worth circa £22.5m over eight years, which suggests to me, that negotiations with the MOD, are at a very advanced stage, otherwise the potential contract value, wouldn't have been mentioned.

[18bt] 08/8/2016 15:51

That was mine - only £3k!

[onjohn] 08/8/2016 15:12

Nice buying 50k mmm

[onjohn] 08/8/2016 14:51

Probably spike when contract is announced imho

[onjohn] 08/8/2016 14:49

Bought for doubler

[timojelly] 08/8/2016 14:24

They can buy ACI for £50mill MINIMUM

[tday] 08/8/2016 13:51

How long before Bae or another defence contractor, decide now is the time to make a bid for the company?

[chickenrun1] 08/8/2016 12:12

Pavey Ark, I am relatively new here, yes. I'm ex-navy, living in France (Toulon).

I don't post a lot but I was a fan of these as Corac many years ago. I mainly lurk on BB's, different ones to ADVFN where the talk is more sensible. I concur with your valuation assessment and see TP Group as extreme good value. My point was they achieved around £300k pbt in 2h but going fwd they benefit from £50m in orders over 8 yrs (lets say £6m p.a.) on top of existing income.

I just felt many investors or potential investors were not paying attention to that issue.

I am sure we will be enlightened by the company report soon.

[azalea] 08/8/2016 10:18

PA
I particularly agree with your last para, I am always amazed at the jump in share price of a company simply because it has successfully completed raising millions in a share issue,despite still remaining in debt and negative eps forecast.

[pavey ark] 07/8/2016 20:46

chickenrun1, I take it that you a fairly new here but there was a long running debate here about whither the company would break even last year.
The main point of contention was the interpretation of the wording of the company announcement.
I did point out (correctly) that break-even would occur occur at an EBITDA level and also pointed out that EBITDA is a perfectly fair way to vale a company that pays no interest charge or tax.
About this time I also pointed out that the submarine business was worth at least £30m while some were trying to say it was worth little more than it was bought for ie £10m.
I do remember one hapless soul upping this to £12m then one other making the bold statement that it was worth no more than £15m.
My answer is the same now as it was then, go to the company and offer £30m and see if they take it.
As the Edison research data has had an airing recently it's worth pointing out that long before these large orders Edison valued the submarine business at £30m or 7.5p / share and we now see that the Managed Solutions part has been spun out into a new unit which has great potential (see SK's presentation in February).

I can only take it that the £7m cash it held for a reason but the company is no longer burning cash and the enterprise value is c. £14m so with a turnover of over £20m the figures become even more impressive.

I see the suggestion is now being made that these impressive figure, rising large orders, new developments, secure markets, unique sole supplier position is likely to upset the institutions as they would much prefer the company to be burning huge amounts of cash and making no significant moves towards profitability after many years.

One final point; I could go through any number of small companies where the market is obviously looking beyond the next set of results and indeed appearing to ignore the last set of results.
These companies trade on much higher multiples than TPG,have little cash (or even substantial debt),certainly don't have the market leading position that TPG has in the submarine air purification business and few have the very strong,long term order book.

[azalea] 07/8/2016 11:54

Morningstar data ---Broker forecast ratios

2015(A) 2016(E) 2017(E)
EBITDA 0.47m 0.70m 1.75m
EBIT -1.80m - 0.51m 0.64m p/e 57.50

[cerrito] 07/8/2016 09:31

On the basis that anyone like me holding TPG shares has an interest in all things submarine:
I did on Friday what I v rarely do and bought The Economist and saw the following article-which anyone can access.
Not directly related to TPG per se but a to me fascinating description of the state of play between subs and aircraft carriers and then drones and subs.

[chickenrun1] 07/8/2016 09:25

azalea, one suspects that the average investor does not focus on the break between 1h and 2h profit in most cases to notice TP Group made a profit in 2h, as I had not noticed until it was pointed out to me and I think I pay more attention than most. It certainly had not been mentioned here until recently.

I generally look at TP Group from a different angle in that here we have company with astonishing sales growth and contract wins, abundant cash and trading on less than one x sales. For a micro cap this is rather rare I would contest, even more so if they are profitable in 2h having improved earning by £3m compared to 1h in a business which isn't particularly seasonal.

[ricardo125] 07/8/2016 08:52

There's also the potential for the share price to crash again as we saw when one of the institutions sold off some their holding. How many years are they going to hold here now that the original investment in a compressor business is all but over.

[azalea] 07/8/2016 08:34

chickenrun1 1022
A very interesting observation. I am a holder, but my main interests lie elsewhere; leaving me content to follow the posts. That said, there is significant potential here for the share price to make some rewarding moves upwards over the next year or two.