Waterman Share Discussion Threads

[allstar_07] 27/2/2015 08:27

Results look good on the face of it.Although cash is more like 2.8mill after bank loans and non-controlling interests but still better than last year. Didn't expect exceptionals to be as high as they are considering there wasn't any additional discontinuing of any ops. Would like to see basic broadly similar to adjusted.Receivables have gone up and now 10mill in old debt. Would be interesting to know whether any of this is the same debt as reported at full year. The ability to recover this debt has to be a concern.

[norbert colon] 27/2/2015 08:02

Well as expected some very strong numbers and a positive outlook from the board this morning.

Given the considerable increase in HY revenue £41.4m it seems likely that the FY could see revenue in the £90m area with an associated benefit to the bottom line especially as there are still some wrinkles to iron out in the Civil's business. If they can break even with this element of the business in the FY that will be a fantastic result.

I can see EPS in excess of 6p for the FY rather than the current 5.4p forecast but have not yet had time to really examine the numbers in detail.

Cash generation is particularly strong (+64% and now £4.6m or 20% of market cap) and its excellent to see ROCE near to the 20% target already.

In summary these results should form a firm base for a significant improvement in the valuation of the company going forward.

[brummy_git] 26/2/2015 10:56

For what it is worth Norbert, I also have price target of around 150p per share.

[norbert colon] 26/2/2015 10:38

Its anyones guess where the share price will be tomorrow or next month or in 12 months time but the results tomorrow will help to clarify the potential.

I have been looking back at some historical numbers (2005 / 2006 results to be precise) and there are some interesting things that jump out when you look at the current forecasts namely:

Revenue in 2006 / 2006 was almost identical to that forecast for 2015/2016 i.e. £73-75m / £84m. EPS in 2005/06 was, however, 9p/9.5p against the current 2015/16 forecasts of only 5.4p/7.1p. Whilst this is a very crude analysis this shows that the current forecasts are still very conservative IMO.

Margin is the key thing here and back in 2005/06 they were achieving 5-6%. As I have said before there is no reason why we should not be back at that level and when you look at the results from RPS today you will see they achieve a 9% margin.

I also noticed that RPS have committed £58m for new acquisitions from 2015 onwards so we will continue to see further consolidation in this sector (globally).

Trying to predict share prices is a foolish pastime, however, depending on what tomorrow brings it would not be unreasonable to see ongoing upgrades to the current Waterman EPS forecasts perhaps in-line with the historical numbers and this would again underpin a share price in excess of 100p within the next 12-18 months. If they achieve 6-8% margins over the next 18 months then 150p is very possible. Just my thoughts for the day and I very much look forward to seeing the facts tomorrow. Good luck to all.

[shammytime] 25/2/2015 13:58

Looks like this is getting ready to make its move. Expecting strong set of numbers on Friday. We should be revisiting 80-85 by end of week.

[cheshire man] 16/2/2015 15:24

News out on the 27th FEB :-)so not long to hear the hoped for good news

(05/12/2014) ch - "The board believes that Waterman remains on target to triple the group's adjusted annual profit before tax to £3.30m over the three years to June 2016"

[battlebus2] 16/2/2015 15:18

Great work norbert, nice bowl forming, back to 80p with results maybe..

[norbert colon] 13/2/2015 10:38

Interesting to see that RPS has today announced the acquisition of Klotz Associates in the US for a multiple of 0.92 x sales. Again reinforces the point that Waterman (if acquired) should easily attract a multiple of between 0.6 and 0.7 x sales equating to a share price in the order of 140-175p. Current share price - 68p.

Also very pleased to see that the interims will be out on 27th Jan (2 weeks) - only 2 months after the half YE. I am confident that these interims will wake the market up as to the turnaround and profitability of the business.

[norbert colon] 27/1/2015 08:38

hxxp://audioboom.com/boos/2828071-paul-hill-25-jan-2015

Missed this over the weekend. Nice to see Paul Hill has also picked on the huge anomaly concerning Price / Sales compared to peer group. He has 100p + target as I do.

[smurfy2001] 26/1/2015 18:11

Overbought.

[norbert colon] 26/1/2015 08:34

Interesting to see that WYG has effectively put itself up for sale today (Strategic Review).



Currently (this morning) WYG is valued at 0.6 x 2015 sales compared to 0.25 x 2015 sales for WTM.

Look forward to seeing how this review plays out.

[mrx9000] 22/1/2015 22:43

Very much under the radar, which is what I like to see.

[cheshire man] 14/1/2015 14:55

Let's see a break of the 60p mark on the bid ,,,,,,,,Interims early March + Divi on the 19th,,,,,,,,all helps in this market :-)

[daz] 14/1/2015 08:13

Yes, impressive out performance on a down day for the market.

[battlebus2] 14/1/2015 08:09

Great to see these continue in the right direction.

[mickharkins1] 13/1/2015 13:24

Looks like we should hopefully get a positive golden cross on the chart in the not too distant future.

[b3842517] 05/1/2015 15:15

Very interested in this, but also struggle to see how they will get to 5.4p EPS for next year.

I calculate they will need an OP of £3.1m to do this which is a big leap from this year and assumes a lot of the losses in one division have been stopped entirely.

[mickharkins1] 05/1/2015 08:15

Just dipped a toe in today.

I very much like the fact management are so publicly committed to tripling profits in the next couple of years...they must be confident! If they do as they promise, I believe their options will be well in the money (minimum share price needed is 1.00) and we will all be well rewarded!

[battlebus2] 02/1/2015 23:23

Another great write up Norbert, your previous one seems to have attracted a few buyers today.

[norbert colon] 02/1/2015 23:18

Further update provided on the fool thread re: why I think they will achieve the forecast 5.4p of EPS.

[darryn1] 02/1/2015 08:05

Excellent investment summary Norbert Colon

[mrx9000] 01/1/2015 22:53

AdamB: Yep, I noticed the EPS figures as well. For 2014 I have EPS at 3.04 and for 2015 I have them at 5.40.

Norbert: Excellent writeup. Thanks.

[daz] 01/1/2015 11:37

A very thorough and comprehensive post Norbert, I didn't know about the share incentive scheme, which as you say will be a powerful incentive to meet their target of tripling profits.

One thing, which I think is also worth mentioning is that cash flow (in addition to cash) is good, WTM managed to keep cash holdings consistent despite the repayment of borrowings last year and that also reduces the risk of something untoward happening.

HNY all.

Daz

[norbert colon] 31/12/2014 13:42

Have just posted my thoughts on Waterman over on the fool. AdamB1978 - hope this answers some of your queries although DAZ clearly has already seen the potential here.



Comments welcome.

[daz] 30/12/2014 10:48

Should be clearer with the interims in Feb Adam.