Xaar Share Discussion Threads

[garth] 24/4/2020 08:10

Reminder of highlights from yeterday:

£25m cash at year end. £27m market cap (now £33m).

-- Strong balance sheet with Net cash at 31 December 2019 of GBP25.3 million (2018: GBP27.9 million), significant cash outflows associated from Thin Film GBP18.0 million offset by increased Stratasys investment in Xaar 3D, GBP12.0 million, and cash generated by the continuing operations of GBP3.4 million

-- Significant progress in Xaar 3D Printing saw Stratasys increase its investment from 15% to 45% with an option to acquire the business outright


..........


So, a 30% increase in 3D stake for £12m. That implies a current valuation of the 3D business at £40m

Xaar's share is worth £22m. They have £25m cash and continuing operations throwing off £3.4m in cash pa - albeit at lower margin.

............

"The Group entered 2020 debt free and with GBP25.3 million of net cash. This positive cash position means that even in our most pessimistic scenario for trading during the remainder of the year, along with actions to reduce costs and cash outflow and use government support where appropriate, we are confident that the business is well placed to manage through an extended period of uncertainty."

.............

"Following restructuring we have retained a small team of engineers in the hope of being able to monetise our Thin Film assets and IP."

............

"Product roadmap

Despite the lack of investment in the Bulk technology in recent years, I have been surprised and excited to discover a range of technology projects that are at varying stages of the R&D life cycle. These are all projects that have either been put on hold because resources were redirected to Thin Film or are specific research projects undertaken by R&D team members who were not focussed purely on Thin Film. These technology projects provide a real opportunity to build on the current product portfolio by addressing some of the gaps whilst further enhancing the competitive advantages we have in other areas.

[smithie6] 24/4/2020 08:02

I picked up some

the nett cash position is nice wrt the cap. value & for the virus situation

(the opposite of course being true for cos. with loan covenant problems)

[garth] 24/4/2020 08:00

Bookbroker,

thats right.

G.

[bookbroker] 24/4/2020 07:35

Why a pullback, I’d rather see this gather some momentum, and then pull back, we are not even where we were at the end of 2019, recent acquirers do not seem to grasp how far this has fallen in the last two years.

[amt] 24/4/2020 07:13

In a couple of years I think it reasonable to believe that Ebitda could be around 10m per annum. Put that on pe of 15 and add on underlying value of business and market cap could be around 230m. About 3 quid share price. No invest advice intended.

[my retirement fund] 23/4/2020 18:22

Hoping for a pull back here to increase my position

[cyberbub] 23/4/2020 17:16

On a roll now toward the usual 200% profit level for the 20p buyers (ie 60p) in my humble opinion.If we get positive newsflow on restructuring and a turnaround in the finances, I see no reason why we couldn't be pushing 90-100p by the time of the next interims. The company's quantifiable assets 'today' are worth not far off 100p, with the actual revenue-generating company, its brand, and much of its IP and knowhow thrown in for free.Covid is the fly in the financial ointment of course. But they have enough cash to ride out the storm.Just my view anyway. DYOR etc

[davebowler] 23/4/2020 16:42

Very encouraging RNS-

John Mills

The Company was notified on 23 April 2020 John Mills, Chief Executive Officer, has today acquired 125,000 ordinary shares of 10 pence each in the Company ("Ordinary Shares") at a price of 39.3509 pence per Ordinary Share. Following this transaction, John Mills's beneficial interest in the Company is 125,000 Ordinary Shares representing 0.16% of the current issued share capital of the Company.

[garth] 23/4/2020 16:40

Strong finish to the day, well deserved.Plenty of reasons for optimism given today's results and commentary. Now we wait to see management deliver appropriate investment in and stewardship of what should grow to a cracking little company once again. Only not quite so little as it is now.G.

[cyberbub] 23/4/2020 15:25

Yes a decent buy, although really it would be good if he were to get up to maybe 1% through purchases or options, to fully align himself with other investors IMO. Giving Mills 500k options at 60p would be very acceptable from my point of view...I note from the last Block Listing Review that there are about 2M other options still outstanding, I wonder if some of them are already allocated to Mills?NAI

[rimau1] 23/4/2020 15:10

There we go, as expected / hoped this morning the man Mills makes his maiden purchase, so i have topped up with him. My last buy was 23p so its increased my average price a tad lol

[amt] 23/4/2020 13:56

Cyberbub. I agree if there is any glimpse of profotability then 1.50 is on the cards. I still think a cheeky bid at 80p is not of the question but could end up at say 1. 20.

[cyberbub] 23/4/2020 10:32

Looks like a few traders who bought at 20p bailing out, or selling half, at the 100% profit mark - not unexpected.

[cyberbub] 23/4/2020 10:19

Oriental??

[my retirement fund] 23/4/2020 10:06

Absolute clasic. Perfect cup handle formation on chart. https://en.m.wikipedia.org/wiki/Cup_and_handle

[davidlloyd] 23/4/2020 10:01

Is this an oriental move occurring here? Interesting price action...

DL

[davebowler] 23/4/2020 09:57

From Research Tree (free to join for a period)
Cenkos -
FY2019 was a very tough year for the Group, characterised by the decision to cease investment in its Thin Film
technology and issues affecting the performance of the core Printhead business. The adjusted loss before tax was
£69.8m and included a loss of £9.8m (FY2018 - £4.5m profit) in respect of continuing operations. Period end net cash
was £25.3m and this provides the new management team with the resources to implement their strategy and to
withstand the uncertain impacts of COVID-19 that are behind today’s expected withdrawal of financial guidance.
Whilst management reiterates that the Group has yet to see a significant impact on demand, the statement highlights
that the situation continues to evolve rapidly, resulting in actions being taken to preserve cash and to maintain
liquidity, including also the use of Government support measures as appropriate. The new strategy looks to address
key deficiencies in the previous business model and management believes this sets the right course for an eventual
return to profitability and growth in the medium term.

[meijiman] 23/4/2020 09:47

but have SEEN

[meijiman] 23/4/2020 09:46

I agree. No downside and lots of upside. Don't want to trawl over the past but have the situation which played out here a few times before. Strong/dominant ceo pushes through his own agenda...Chairman either weak or doesn't understand technology..usually a bit of both. Result is a disaster. Good eg is Courtaulds...where is it now?

[cyberbub] 23/4/2020 09:28

AMT, those are assets, ignoring the actual value of the ongoing business!...which IMO must be worth £40M today, and if the new management turn it around could be 2-3x that much.And don't forget their outgoings will be reduced by £8M in 2020 due to abandoning Thin Film!The share price could/should be over 150p IMVHONAI

[my retirement fund] 23/4/2020 08:25

I think some mentioned a take out value earlier of 80p. I think they'll probably want to revise that up to say £1.60 ish ? Lol

[garth] 23/4/2020 08:18

amt,

:0)

XAR own 55% of 3D. But that is a trailing valuation of course. If they sell I think it was possible $10m royalties + sales of print heads as follow-up revenue from the project - in addition to the sum for sale.

G.

[amt] 23/4/2020 08:17

So 3D business 40m cash 25m say stock and fixed worth half book value so 15m

That makes 80m in total.
Current market cap 27m

[garth] 23/4/2020 07:54

I have been invested in GHH for 20 years. Always a good business. Always had massive potential. It took a change at the top to really unlock it...

I have added sections to my post above which, taken together, convey my reasons for investing here for the longer term.

DYOR.

G.

[rimau1] 23/4/2020 07:51

Results as expected, so lets concentrate on the forward looking view, the key takeaway for me is minimal impact so far from covid. If you believe that the new management team can turn the business around then this is still a decent entry level given that this is still valued under net current assets of £38m. I would expect director buys today and I will have a top up if they buy. What do others think?