Tyman Share Discussion Threads

[a1samu] 06/5/2013 11:04

Presentation shows combined 2012 EBITDA as £42.4, with Truth contributing £14.5M in the year. Acquisition cost is shown at 8.9 times EBITDA.
I have carefully researched my numbers and do not quote stuff plucked out of thin air, but nevertheless cannot help feeling that the presentation is self serving and the directors have chosen themselves an easy way of enhancing their own positions.

For an ordinary shareholder with 1000 shares, who will be entitled to subscribe for a further 252 shares, it will take almost 10 years to recoup the capital, in dividend receipts over this time, that he is asked to invest now, share price fluctuations ignored, for the price could well go down as well.

To expect ordinary shareholders to cough up further capital of 23.4% of the value of their investments is self serving and the company should have found a more pleasant way for shareholders to be earning returns, rather then expect them to part with massive sums of additional capital.

Neither is the answer to say that if you do not like it, you can always sell your shares. This is not about liking or dislike, but it is about the board respecting the shareholders and providing shareholders with regular returns, rather then expect them to search for new monies to mollycoddle and to make the challenges easy for the directors of the company.

In this company, the directors cannot go wrong in enhancing their own prospects and I am not sure that I share their view, that by enhancing their own prospects mine will be as well as a small shareholder.

From the behavior of the major shareholders, it would appear that this is not a resoundingly welcome deal, which will send the prospects of this company sky high.

Unfortunately, I have been with this company long time before any of the current directors and perhaps I will take the lead of Greg Hutchigs, after all, who is not taking up any of his entitlement and the other four of the seven major holders who are committed to subscribe for less then their entitlement, as shown on page 289 of the prospectus.

[jeffian] 05/5/2013 14:40

a1samu,

"Net profit produced by Truth for y/e 31.12.12 is $5864, or £3665......increase in loans is £62M (page 277), as a result of this acquisition. This profit level will hardly pay for the interest associated with the costs of this increase in loans"

Are you sure? The Net Profit figures you quote are AFTER finance costs of $9.628m on loans which are due to be repaid as part of the transaction (Cash consideration of $200 million (approximately £129 million2) on a cash / debt free basis). On a cash/debt free basis, Truth's 2012 pre-tax profits would therefore have been $15.5/£10m - rather more than enough to pay the interest on £62m, no?

[a1samu] 05/5/2013 13:46

Net profit produced by Truth for y/e 31.12.12 is $5864, or £3665 at a rate of USD£ 1.6,(see page 251 of the prospectus) increase in loans is £62M (page 277), as a result of this acquisition. This profit level will hardly pay for the interest associated with the costs of this increase in loans and without the massively diluting share offer in the region of 23.4%, this deal would result in an immediate loss to shareholders.
On page 278 total consideration is shown as £124M, of which assets acquired is shown as £18.5M and goodwill as £105.5. A lot to be paying for profits of £3.7M/annum.
The acquisison is to begin saving costs of at least $5M from 2015 onwards. In the meantime an immediate provision of $2.5M of cash cost is to be made.
On page 35, the warning states: The open offer in not a rights issue and any shares not applied for will not be sold or placed for the benefit of the qualifying shareholder.

[jeffian] 01/5/2013 10:07

Not much interest here then!

This deal looks like good news for the company and the fact that the Placing has got away at only a very mild discount to market value even after the sustained rise in the share price over the last 18 months suggests that it has good institutional support. Onwards and upwards, I hope.

[jeffian] 15/4/2013 15:06

Yes, a nice turn for him but also a good thing for the company. His botched 'comeback' was very de-stabilising and whilst he held such a large stake the threat was always there that he would have another go. Glad he has made a profit but also that he has decided to 'move on'. A win/win for all concerned, I think.

[a0148009] 15/4/2013 12:17

GH at last taken a profit on some of his holding - nice turn.

AO

[aorlov] 30/3/2013 22:05

A recent forecast ..........Tyman: Liberum Capital raises target price from 177p to 230p reiterating a buy recommendation.

They've given notice that they are applying to join the main market. This should attract other fund managers, ( plus, you can put them in your ISA's)!

250p by Christmas is not unrealistic.

This B.O.D is focussed, able and determined.

[janeann] 26/3/2013 16:26

well be interesting to see if these can break 200p ; looking quite strong aht present!

[a0148009] 12/3/2013 12:11

About right price at the moment but think as the market anticipates 12- 18 months ahead could easily go 200p+ in this market almost talking myself into a BUY see below.

Date Broker name New Old price target New price target Broker change
12-Mar-13 Canaccord Genuity 182 213.00p Reiteration

My view:-

Negative Points

Margins down a fraction.
Schlegel having a tough time in Europe and do not see much improvement in near future.
Positive
Potential strength of USA housing market.Amesbury 50% of revenue.
£/$ exchange rate boost.
Benefits from recent rationalisation and vigilance on costs.
Net debt down to £37m
Dividen 3x covered.

Digital Look

Tyman Forecasts
Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
31-Dec-13 245.05 21.80 11.83p 15.5 9.1 +2% 4.60p 2.5%
31-Dec-14 256.75 24.68 13.36p 13.7 1.1 +13% 5.32p 2.9%

AO

[jeffian] 12/3/2013 10:44

Results OK, if a little complicated by corporate transactions.

Is it just me, or are these beginning to look fully valued at this point?

[a0148009] 15/2/2013 19:32

jeffian

Thanks for your reply, the shares were consolidated in December 2007 at the 9ish level according to the chart, you are right I do remember GH buying at 90p after this, however in March/April 2009 when the market hit bottom the consolidated shares traded as low as 6p, I recall it well sitting on a large loss and trebled up at 8p.

I think they are about the right price at the moment trading on Consensus P/E of
15x for 2013 and 13.3x for 2014, I find the market gets ahead of the game
for a while anticipating recovery of US property market, hence the last surge in price.

As they say it all turned out right in the end.

Edit agree GH purchased at 9p when he first moved into Company as well as the post consolidated purchase at 90p.

AO

[jeffian] 12/2/2013 13:43

AO,

I think you are forgetting the 1:10 share consolidation in 2007. Greg Hutchings made his original share subscription at 9p (equivalent to 90p post-consolidation) - although he may have made some purchases in the market before then, I can't remember - and went on (with the rest of us) to participate in subsequent Placings and Open Offers at 14p (140p) and 18p (180p). Either way, he's in the money now if he wants to withdraw from the fray.

[a0148009] 08/2/2013 12:11

GH also purchased a block of shares much lower than 90p somewhere in the high teens, which really lit the touch paper under the shares. I bought to average myself at 8p, they traded at 5p. It is a shame that all the history has been wiped out, I have found it very useful on occasions, did this happen automatically when the name was changed or was it intended.

AO

[jeffian] 08/2/2013 01:24

Well done, giardap, you found the new thread! No, I only meant 'goodbye to Greg' in the sense that the old Lupus thread made specific reference to the Hutchings era and there is now a clean sheet with a new name and no links to GH other than (as you say) his substantial shareholding. Having said that, we are now at the point where he could get out of his last investment at breakeven (180p Rights Issue) and substantially in profit as his stake was built from 90p(?) upwards. I was in years before that and my original acquisition was at 70p, so I'm reaping the benefits now.

[giardap] 07/2/2013 21:39

I would not say goodbye to Greg just yet - he still has a major shareholding in the company

[jeffian] 05/2/2013 11:08

"As indicated in the 2011 Annual Report to shareholders, the Board has decided to change the Group's name and branding to reflect the re-focusing of the Group as an International building products business, supplying components to the door and window industry worldwide."

Although I once chastised some poor soul for trying to start a new thread and losing the 'history', now that dear old Lupus Capital has changed its name, the time has surely come (particularly as the old charts don't work any more!). So it's goodbye to Greg Hutchings and his financial conglomerate and hello to "an International building products business".

Ladies and Gentlemen, the floor is yours...................