Tp Share Discussion Threads

[the prophet] 01/2/2017 10:20

ah, little red thumb man out in action today, lovely!

[nw99] 01/2/2017 09:46

I love this part of the Edison report TP Group continues its evolution from a cash-hungry research and development house to a Tier 2 specialised services and engineering company. The increased maturity allows us to apply a developed view of fair value with a more specific peer group SOP combined with a DCF. It currently returns 9.11p, implying significant potential for investors.

[the prophet] 01/2/2017 09:45

another classic:

'but even they were very positive on the prospects for TPG.'

Ofcourse they were postive you idiot, it's called 'paid for research', they don't do negative!
Put that on your 'classic' list together with regular 'exceptionals', so regular they have to be forecast in! LOL!

[the prophet] 01/2/2017 09:41

chorister
-re your two points, what I do with my time is none of your business, although it takes me very little time to pick up on the points in the Edison report that our resident expert wishes I would gloss over. Funny, he bought up the subject of the new report and now doesn't like it when I quote bits of it!
For example,operating cash flow forecast to be negative to the tune of £1.2m in 2017 is a valid point and one that seemed to have escaped our amateur forecaster and is, I would suggest, of interest to most serious investors and would be investors.

-secondly, re let the market decide. Well, the market will decide, it's decided from 40p odd when cartmell joined to whatever we are today.
But if we all took the line of 'let the market decide' we might as well close all BB's, as discussion would be pointless. Or perhaps you are another of those that only wants to hear one side?
Finally, if you don't like my factual re-posts of bits from Edison, just stick me on the filter, no skin of my nose.

[nw99] 01/2/2017 08:10

Buyers yesterday after the meeting and continuing this morning . Good to see such positives.

[nw99] 01/2/2017 07:53

The guy is everywhere on other stocks he doesn't like people making money out of good stocks so just writes a load of dosh

[chorister] 01/2/2017 07:31

The Prophet - this seems to be some sort of hobby of yours. Why not just let the market decide?

[the prophet] 01/2/2017 00:25

Page 8, re that negative cash flow for this year.'As indicated in the January trading update, net cash at 31 December 2016 was £9.2m boosted by some contract advance payments received before the year end that are likely to largely reverse in FY17. If acquisitions are identified that require further funding, management would not rule out a further equity raise to support group expansion.'Hmmm, stand by for another fund raising and bonus time again for our bod! Page 11, net cash flow is forecast to be NEGATIVE to the tune of £1.2m this year.Edison's view, nowt to do with me.

[the prophet] 01/2/2017 00:17

Page 7, wasn't our expert talking about increased margins? Seems a tad unlikely from this:'With single-source margins the topic of much discussion in UK defence procurement policy at present, we would be surprised if TP was not facing some increased pressure on price in these negotiations. The strategic importance of the systems and support supplied should, however, weigh in the company's favour. In addition, we would expect management to be seeking innovation and efficiency gains to enable returns to be maintained at least at historic levels.'

[the prophet] 01/2/2017 00:01

Ps, I note Cerrito in his post has suggested a possible delay to one of the sole source MOD contracts.I did warn last year that this was always very likely with govt type contracts, but seem to remember was loudly 'poo pooed' but our resident expert and forecaster.Perhaps he will take more notice of Cerrito's thoughts?.....we'll see.This is just one of the many reasons why this type of sole source margin constrained company is unlikely to achieve a high stock market rating.Although, to be fair, it's not doing too badly to get this rag tag of bits to £28m.

[pavey ark] 31/1/2017 23:28

Cerrito, thanks for the feed back.
TPG signed a renewal/extension of the MoD support contract 21/03/2016 and it was for twelve months.
I imagine the new contract will run from something like that date.

The second contract is an equipment contract and the signing date is unlikely to affect the requirements and delivery dates for equipment i.e. if they needed it they would order it.
These contracts are for 7/8 years with three year extensions so a few months either way is not that important.

I think the signing of the contracts may have an immediate effect on the share price but I think that will be largely due to the status attached to securing a £50m long term contract with the MoD.

These contracts afford great forward visibility and greatly help in the efficient running of TP Maritime now worth £40m.

Some of the old timers here will fondly remember my saying (last year) that TP Maritime was worth £30m ....ah old times ... how they squealed......£;10m... £15m tops they cried.
Nice to see that some have not lost their firm grasp on reality ....cash flow negative indeed....laugh?....I nearly bought a round !!

[pavey ark] 31/1/2017 23:01

Central costs of £1.1 million are not "sucked out of the company" they are the costs of running a board, a central office a secretariat etc.

The figure of £0.8m loss is Edison's figure ,down from their very recent guesstimate of £1.1m and certainly doesn't take precedence over anything said by the CEO of the company.

If you are going to persist with the "cash flow negative this year nonsense" you will no doubt be willing to sing the praises of a company that can generate £3m operational cash flow this year and all from an EBITDA of £1m !!!.......clown!!

As you brought up the point about exceptional costs and wondered what they could be I pointed out the Edison couldn't possibly know what the exceptional costs were this year and certainly not next year.

You and Edison have been proven wrong time and time again and your comment/bluster about the cash flow being there in black and white,as if you had not completely misread and misunderstood the figures,just simply makes you look very foolish.

Anyway we have had this sort of debate many time and your only defence in the past has been the Edison figure but as everyone here knows I told you they were wrong and I told you that you were wrong....I was right then and I'm right now !!

There may be bumps in the road but I certainly called the share price rise correctly last year and this company is still on its way to a compound growth of 50% /year from my very generous 3.5p starting point.
July 2015-July 2016 average price 3.5p take this as a January 2016 figure (actual price was less)
3.5 x 1.5 = 5.25p.

5.25x 1.5= 8.25p......dec 31st 2017 ( I suspect it will be higher and even the ultra cautious Edison chap agrees but but they usually get it wrong ....no silly me...they only get it wrong on the low side.)

So there you have it, no pie in the sky ...no "when the boat comes in"......"just wait until we get this big order" etc
Just steady, significant,grinding improvement year after year.

Will return to your views on options any time you like.

[timojelly] 31/1/2017 22:46

And the shareprice continues to climb... I'll take 9p+ in the next couple of months thank you.

[the prophet] 31/1/2017 21:48

Oh dear, see I've struck a sensitive note!Just reporting on the report PA, the more interesting bits that you choose to skip over.Re the almost £2m, shame you can't read my post. Here's a helpful hint for you, central overheads forecast to suck out £1.1m and D&T to lose £0.8m. I make that £1.9m, close enough to £2m in my book. See you haven't mentioned Phil's £0.5m D&T forecast loss for this year, very wise!Might be a decent business here if TPG could ditch everything inc the blood sucking central overheads and leave the subs business, but then the bod would lose their gravy train.Re cash flow forecast for this year, its there in black and white, TPG is forecast to be cash flow negative this year, whichever way you try to spin it.Oh, your bit about 'exceptionals' is an absolute classic. Are you seriously saying they should forecast in EXCEPTIONALS ever year! LOL! Mind you, given TPG's track record, there is some sort of twisted logic to that.There is an endless supply of material in the Edison report and I look forwards to talking about it, especially as you kicked the discussion off!Here's one for starters. I see the report has issued a 'softening up' for a 'repricing' of options. I.e. stand by your beds for slashing the price of the options. Nice work if you can get it!'Management and employee incentivisation may also develop positively. Existing share options cannot be exercised below 15p per share, which currently is such a long-term potential as to provide little encouragement, especially to recent and incoming talent. The capital reduction should enable more appropriate medium-term incentives to be put in place.'

[pavey ark] 31/1/2017 21:10

As most here know the Edison reports have been shown to be very, very conservatives.
However one can never say that they set out to mislead, unlike our favourite strange person.

I will only address the more serious mistakes (malice or stupidity ? you decide).

Edison has upgraded its estimate of losses in the D&T from a loss of £1.1m to £0.8m for 2017 but these estimates a for a year ahead so they will almost certainly come back to them.
Here is what they think of this unit
"We continue to value the Design & Technology division at zero despite continued losses, as we believe it will be made profitable by additional third party design and engineering contracts in the future."
Couldn't find the £2m loss but if you take the previous estimated loss of £1.1m and add it to the revised figure of £0.8m and round it up ....hmmm...I wonder.

Edison has STUCK a figure of £0.9m for exceptional expenses and I suspect this is based on nothing more than this figure decreasing each year and £0.9m for 2018, now how the hell could they know that ?

The last bit above is the real doozy

"OPERATING CASH FLOW IS FORECAST TO BE NEGATIVE THIS YEAR"

Lets look at this:

2014 operational cash flow is -£3.4m
2015 operational cash flow is -£1.6m
2016 operational cash flow is +£3.0m estimate based on advanced payments *
2017 operational cash flow is -£0.2m estimate based on return of overpayment

So 2014-2015 has an operational cash loss of £5m
2016-2017 are predicted to have an operational cash gain of £2.8m

Once again Edison will almost certainly come back and up these figures.

Even Edison is predicting £3m for 2018 and applying the "Edison upgrade coefficient" to their two year forecasts this figure will be much higher.

* the house broker and Edison are predicting an EBITDA of c. £1m-£1.2m for 2016 how can you get an operational cash flow of £3m from that ?
The prepayments flattered 2016 and detracted from 2017 hence the desired headline.

TPG will be operational cash flow positive in 2017 (paying back the prepayment and subtracting it from 2016) but most sensible people knew that to be the case.

[cerrito] 31/1/2017 18:41

Kings seemed to be suffering from a heavy cold and while his presentation was good was not as good as last year; I did not have the chance to have a 1:1 with him but did chat with someone else there.
Nothing really new from what Kings said: did focus on atomic-see the Dec 6 RNS.
I got the impression that the sole source MOD contract which the July 4th 2016 RNS said would kick off in early 2017 is more likely to be mid year. Anyone else get that impression??
Mentioned more than once a procurement contract with the coast guard but I assume relatively small as no RNS.
Also a figure that I had not heard before: the MOD wants to increase the % age of business they do with SME’s from 20% to 33% by 2020.
I will not be buying more as a result of what I learnt today as I feel I have enough but no desire to sell.

[the prophet] 31/1/2017 18:24

Certainly is an interesting piece.....

Items I have noted:

1)page 10, Edison have increased the forecast managed Solutions division by 25% to £2.5m, yet the forecast profit drops 50% to £0.1m. Bit of a shocker there, wasn't this the great white hope?

2)Design and Tech and Central overheads still expected to suck out close to another £2m this year. Hmmmmm, didn't good old phil say the D&T losses would be £0.5m this year, least that's what he told Shares Mag or something.....be nice if he told investors the same thing?......

3)Exceptionals are forecast to take another £0.9m out this year. They hardly look exceptional when the historical figures are
2014 £1.3m
2015 £1.8m
2016 £1.1m

There is nothing 'exceptional' about them. Wonder what the £0.9m is for this year, will have a good read.

4)Still , a profit after tax of £0.9m is forecast for the year, progress of sorts.

4) This is the 'piece de resistance', stand by, as it's a real shocker.

OPERATING CASH FLOW IS FORECAST TO BE NEGATIVE THIS YEAR.

Sorry for the caps, but that is a stunner! page 11. The cash pile is forecast to decrease this year.

Still, we can all safely ignore all this Edison rubbish as PA's forecasts are much better!

[pavey ark] 31/1/2017 17:23

Not surprisingly Edison has once again upped their figures(they are very conservative) and this is about the fourth upgrade since they first made a stab at the 2016 figures two years ago.
Not really very much new info and I see that they have matched the house broker's figures of £1m (EBITDA)2016 and £2.4m 2017.
I've read the house brokers most recent report so I assume they have but the house broker did put in a very heavy caveat that figures could be better than those given.

If the final balance sheet is correct it is very (very) strong with a Current Ratio of 3.5 (current assets/Current liabilities)

I see that the very large leap in cash is due to so advance payments (I thought it must be) but as I was looking for c. £8m these advances aren't that significant.

I see they now give a fair value of 9.11p .

"If acquisitions are identified that require further funding, management would not rule out a further equity raise to support group expansion."

This reads like a piece from own dear UK press.
Of course management couldn't rule out ANYTHING but have said they would be very cautious with further acquisitions.
Given the cash balance and progress being made I would be VERY SURPRISED if they needed to raise cash but could I rule it out ....NO!

Quite a bit of padding and not much new for those holding and researching on their own.

Will read it again but don't expect to discover much more as Edison keeps quite a distance between the researcher and the company and this has certainly been shown to be the case in their relationship with TPG.

PS, one little snippet: will check this again but they did say that even with the MoD contracts the management will drive efficiencies to maintain margins.
I'm pretty sure the Edison rules are that the MoD contracts aren't included in their report(not until they happen)and I think I read much the same in the house brokers recent report.

[timojelly] 31/1/2017 16:52

Under 'a healthy atmosphere for investors'

[glennborthwick] 31/1/2017 16:40

have you got alink?

[pavey ark] 31/1/2017 16:21

Detailed update from Edison.

Lots of information and opinion.

I've read through it but feel it merits a second (or third ) reading.

[pavey ark] 31/1/2017 16:21

Detailed update from Edison.

Lots of information and opinion.

I've read through it but feel it merits a second (or third ) reading.