Zytronic Share Discussion Threads

[velocytongo] 22/1/2021 11:29

book, it's about the way a business is run.

And if you want higher taxes, James, then by all means support a high pay out to shareholders.

All companies that can - Zyt can - should pay back the furlough before paying out to us. It's about moral and societal purpose not what's legal in a narrow sense. The purpose of the furlough was to prevent mass unemployment and the societal ramifications of that. We all benefitted from that and we should all the bear the pain. Most investors have been barely affected by the pandemic.

[bookbroker] 22/1/2021 11:10

Games Workshop and this business have no similarity whatsoever, for one it has a unique IP. in terms of its offering through market profile. This company is in a more competitive landscape, the cash in this situation is an absolute Godsend, so be thankful that it will live to fight another day. Had coronavirus not poleaxed the global economy, and travel in particular, this company’s marketplace would have remained intact, as stated this time last year. GW. is in the fortunate position of creating a marketplace that does not require movement of folk in the sense of travel and leisure, but more the experience. That can be done online, and that is how they developed their business model. Gaming is off course now firmly in that direction, so ZYT have to develop their product knowledge for other markets. That will require capital and time, so be thankful for small mercies.

[velocytongo] 22/1/2021 11:02

One more thought. I suspect the business will emerge stronger from the pandemic and that management will seek to diversify the customer base more. I suspect that the success in gaming meant they got a bit lazy (nothing wrong with this. we all do it!) as the orders came through the door.

A company like this, should also have a stated aim of making the best touchscreen products and forget the shareholder guff. If they focus on the former, the latter takes care of itself. There's too much reference in the Annual Report about the cash. It should be a given that the company is run in a disciplined manner.

The number one reason to invest in the Annual Report and I quote is

"Strong net assets
and cash provide
sound basis for
growth"

This is often the worst basis for long term investment. By all means, return the surplus cash but, if investors want to make good long term returns, the answer lies in the quality of the business and not the quantity of cash.

Check out companies like Games Workshop whose stated aim is to make the best table to miniatures in the world and to exploit the associated IP.

[bookbroker] 22/1/2021 11:00

Why should they, the point off the furlough was to keep the staff in the job during the lockdowns, otherwise they would have been made redundant, off which a considerable number of the labour force have unfortunately received their P45’s. Do you understand the reasons behind the furlough scheme, clearly not! Think of the number of JDW staff on the scheme, the whole labour force apart from directors and essential staff to maintain the properties, talking thousands there.

[velocytongo] 22/1/2021 10:41

I sincerely hope they pay back the furlough before any share buy or distribution. I know they are not legally obliged to do so but not to sends a bad signal. And I'm sure that the Govt will make life hard for those that took furlough and then opted for a large dividend/buyback.

VTongo

[bookbroker] 22/1/2021 10:16

Best to keep the market informed, can certainly see share buyback announcement coming at the AGM, so nice plan to have something good to say at that point. They have the info. about trading performance currently, so get it out in the public domain.

[kiwihope] 22/1/2021 10:15

I have added a few more...

[bones] 22/1/2021 10:13

Added another 5k myself for a small top up, just to keep the pot simmering.

[gleach23] 22/1/2021 10:09

Surprised they issued this TU now and not leave it until the AGM. Outlook comments are a repeat of the Finals a few weeks ago on 8th Dec.

I hold shares long term but also have a trading position intended for a hopeful run up to the AGM. Oh well, I've now added a few more to that position in the hope of a rise back to the 150p area.

[bookbroker] 22/1/2021 10:08

Looks like support coming in now, see by the day’s end, a sharp reaction but full year results will hold more clues.

[bones] 22/1/2021 09:50

It is also clear that any resumption of gaming and casino reopenings in Macau and the like will be key to Zytronic order book improving.

I note that Zytronic recent tweeting activity has centred on the healthcare markets (out of hours ordering from a screen, hover touch and anti-microbial surfaces for hospitals, etc). Keep an eye out for progress there too.

[bones] 22/1/2021 09:46

Kiwihope, agree that there can be no certainty (if there was, the share price would reflect that). However, they own some tremendous IP and some of their technology is leading edge. I think there is too much focus on their old image of clunky ATM machine screen suppliers and not enough on their hover touch and sliding screen tech. An enterprise value of just £6M tells me that.

They talked of returning surplus cash and the current share price suggests they should get on with it while its cheap for them to do so. That should help galvanise investors’ minds a little.

[kiwihope] 22/1/2021 09:35

Hi bones,

Yes there may be a bounce up within the next 12-months, just on a general improvement in world-wide sentiment as more countries increase vaccination rates (assuming that happens without any fresh setback). However I prefer not to rely on this and to hold companies that I believe have some reasonable fundamentals.

On the upside I like management, the balance sheet is bomb-proof and there is a chance even with a modest return to past sales for the share price to increase markedly.

On the downside this may be a value trap where the company is in slow, terminal decline and I keep holding, waiting for that elusive recovery that never comes.

At this time my reasoning is that the pandemic has hit ZYT markets harder than most and that it once it is over, it should recover nearer to past performance. Whether it can grow from there is a moot point and a decision for another day.

[bones] 22/1/2021 09:26

Kiwihope, yes that’s about it. Hold this with patience but I cannot see the logic in selling if you have accumulated a decent stake over the recent weeks like I have because I know that, if a catalyst appears, there will be no hope of buying any size at much higher levels. That catalyst is likely to be an announcement about a return of cash (buyback or other form), a material new contract, a general increase in expectations, whatever. I also don’t rule out a takeover by a bigger player (reminds me a lot of Avesco, which was undervalued by AIM for years and then received an offer 100% above the quoted price). Remains a solid hold for me.

[kiwihope] 22/1/2021 09:11

No one should be surprised by this update. I haven't seen any sign yet of recovery in their markets. Management are just saying it like it is. Until the world shows signs of getting back to normal then the share price will bounce around where it is. If you believe ZYTs markets will recover then hold or even buy. If not then sell and try something else. I am willing to give it some time and continue holding...

[jamessmith23] 22/1/2021 09:09

Happy to enter at 130. The huge cash pile is a positive which means at 16m shares the actual business is valued very low. Not saying its going to move quickly at all but if it isn't hugely loss making in a terrible year like 2020, then the upside is much larger than the downside. Not convinced it will happen in 2021, but any return to growth that could happen will hopefully see it move up to 200p, even if that takes a year or 2.

[bones] 22/1/2021 09:07

Someone snapping up multiple 5k chunks while pocket money sized disposals by those who can’t see beyond tomorrow. The MM’s have hoovered up some cheap stock this morning.

[velocytongo] 22/1/2021 09:03

My question is, why don't they use the cash to buy customers in different verticals?
VTongo

[jw330] 22/1/2021 08:43

yeah definitely a hold but not its definitely not a growth stock lol

[stockhunters] 22/1/2021 08:33

jw reduced costs and a return to positive ebitda

markets should forward look covid, a return to normal after vaccination will almost guarantee a strong share price

we wait

[jw330] 22/1/2021 08:31

markets are forward looking and there has been no upgrade in guidance so we are back down to previous levels. This thing isn't going to move up until there is report of significant revenue revisions.

[bookbroker] 22/1/2021 08:30

At some point there will be a pick-up, management are being very conservative, and that is likely to remain so for as long as restrictions on movement are eased.

[stockhunters] 22/1/2021 08:27

surprised it dropped so much would have thought alot of covid would be priced in now

if you believe we return to normal after vaccinations then a recovery to previous levels is not far behind

i added

[gdjs100] 22/1/2021 08:24

So here we are, back at cash balance levels, with a breakeven business and a clear upside case when normality returns.

[bones] 22/1/2021 08:19

Good news, buywell is here. Last seen spreading doom on RUA at 80p in the summer, now more than doubled since. Things are looking up here!