Zytronic Share Discussion Threads

[bones] 08/2/2021 12:46

Another 10 days to go until that deadline bookbroker. There is hope yet!

[bookbroker] 08/2/2021 10:10

I’m surprised they have not received an opportunistic bid ahead of the deadline for acceptances.

[bones] 08/2/2021 10:08

Neither approach can be criticized to be fair!

Having only recently decided to invest at these levels I will be keeping mine as i believe any recovery in business will see a strong move in the share price ultimately.

[arthur_lame_stocks] 08/2/2021 09:32

I turned the offer down. I could make a profit at that price but I think in time if these recover then the current price will look particularly cheap.

[kiwihope] 08/2/2021 09:26

I think this is a hype-free well-managed company. However I'm worried this is a value trap which will always look undervalued but never recover. I bought quite a few last Spring when they were even cheaper so I've decided to accept the offer. I know I may regret it but my philosophy when I'm more unsure than normal which way the share price will go is to make it so I don't care. This way I get about 30% average return in less than 12-months on my purchases last year while keeping nearly 60% of what I had. Now I don't mind so much if the prices rises or falls.

[bones] 02/2/2021 11:13

Trident5, I guess only the outcome of the tender offer will tell us!

[bones] 02/2/2021 09:36

Illiswilgig, you make a good point about the company perhaps being strong-armed into the buyback tender route. I guess no bad thing if it gets rid of unsupportive shareholders who see better opportunities elsewhere. As said by others, the hope for those that stick around is that the operating leverage of a return to form will be a springboard for the far fewer shares in issue.

BUT, the management still needs to shape up or ship out, I feel.

[bookbroker] 02/2/2021 09:22

The large holders who have been here for some time could have sold two years ago when the price started its precipitous fall, or declining revenues, however you look at it. They didn’t and I don’t see why they would sell now, most are nominee accounts, so they will advise holders as they see fit. Paul Scott, aka Paulypilot talks some guff, he is not the Sage of Omaha by any means. It is tempting to tender a few, the company will be a good deal smaller post the transaction, but its valuation will recover likely quicker when an/if an upturn appears. Either that, or it will tempt interest for its listing, along with its business, touchscreens will be around for some time unless voice recognition and AI makes it completely obsolete.

[illiswilgig] 02/2/2021 09:16

Sorry bones - I posted before seeing your post,

cheers

[illiswilgig] 02/2/2021 09:15

I agree and disagree with PS on this.

I agree that the downturn from end of life products (financial) has been in place for years - but the upturn from gaming, vending and new applications has clearly been seriously affected by COVID. But its far from a situation of just waiting for delayed orders to come in - and there is a lot of hard work to be done to ensure that the orders return once the economies reopen.

I agree that the tender offer represents a liquidity event for large shareholders - and suspect it was been strongly promoted by them in preference to a special divi.

cheers

[bones] 02/2/2021 09:09

That’s too general to say end-of-life products since the forced closure of casinos worldwide, for one, could not be considered a matter of obsolescence. The loss of gaming markets was one of the bigger drivers of the revenue drop.

They have plenty of new products and IP but I fear a lack of entrepreneurial energy from the board of directors who are long in the tooth but not so long in the shares!

Paul Scott is right about it being a liquidity event. As I said already, a godsend for the large holders who want an exit (ie, stale).

[gleach23] 02/2/2021 08:55

Given the general consensus here, interesting that Paul Scott has a different view in his Stockopedia write up yesterday, ending with -

"The real reason this company has done badly, is not covid. It's end of life products. It needs to win new business. Since I can't possibly predict if/when new orders would be won, then I've got to say I'm neutral on this share, and personally would be inclined to tender at least the 43% basic entitlement, if I held any (which I don't). For larger holders, the tender offer is a liquidity event which may never repeat, hence I imagine institutions would be likely to tender all their holdings, thus leading to over-tendering, and scale backs on the excess."

[dozey3] 02/2/2021 08:25

Very useful discussion here. Like many I’m not even tempted at 145p to slice my holding. It is clear that the strike price is out of line with value. Every share they hoover up renders remaining shares more valuable, so sit back and enjoy - like the directors.

[bones] 02/2/2021 07:21

Trident5, no, “long term” is not necessarily stale, but “stale” will necessarily feature longer termers who are fed up with the performance and no longer see the benefits of holding! There is a difference. I think you would know if you were “stale” and I reckon there could be a few. Holding a stock that goes nowhere or down while everyone else seems to be having a ball is a sure fire recipe for staleness!

[trident5] 01/2/2021 22:39

"Hopefully the tender offer will have the benefit of jettisoning the stale and uninspired holders".

Bones - does "stale" mean long term holders?

[velocytongo] 01/2/2021 22:24

I'm pretty sure there's nothing malign here. Returning such a large amount cash and directors not selling (demonstrate confidence in the business), boosting EPS when profitability returns. It's all pretty straightforward. Colefax have been doing this for years.

As others have said, it will be interesting how many shareholders sell. The shareholder base is v retail/private client heavy. HL, ii, Private Stakeholders and Cannacord are fiduciaries, leaving Close and AXA as the only institutions. I suspect that the directors want to clear out as many as possible from HL and ii.

Hargreaves Lansdown PLC 1,799,103 11.21
Interactive Investor Trading 1,395,856 8.70
Close Brothers Group 1,277,349 7.96
AXA SA 1,215,000 7.57
Private Stakeholders (UK) 722,538 4.50
Canaccord Genuity Group Inc 712,716 4.44

[bones] 01/2/2021 22:17

They won’t get an MBO on the cheap. I hope the shareholders fight any cheapskate manoeuvres! As it is, the directors not selling in the tender offer will not make a lot of difference given their puny skin in the game. Still, I respect their judgement in not selling at 145p. Hopefully the tender offer will have the benefit of jettisoning the stale and uninspired holders.

[my retirement fund] 01/2/2021 22:08

Use the companies own money to make MBO easier. Crafty!

[bookbroker] 01/2/2021 19:47

Imagine management would like to buy the company on the cheap post the offer, hence not taking up their entitlement, get it for a song!

[the squire at oakley hall] 01/2/2021 17:11

Board voting in favour, BUT not taking part!!
If they are keeping them, I think I should to


"Accordingly, the Board recommends that Shareholders vote in favour of the Resolution, as they intend to do in respect of their own holdings of Ordinary Shares representing, in aggregate, approximately 1.5 per cent. of the issued share capital of the Company.
The Directors shall not however be participating in the Tender Offer."

[gdjs100] 01/2/2021 16:18

Velocy - an open offer is when shareholders are given the chance to buy shares. Here we are being given the chance to sell them.

[boadicea] 01/2/2021 15:58

Further to my 1080 - Assuming the tender gets taken up in full (which is doubtful) then take out the remaining cash and it leaves the enterprise value at about £10.6m which is only 83% of the 2020 revenue. (These figures are only a rough estimate.)

It seems that some here misunderstand what the company is doing. It would like to reduce its cah pile and is OFFERING to buy back £10m value of shares for cancellation (i.e. they will not remain available to be resold or offered as paper in a takeover.) This is not quite the same thing as TRYING and it will not take long to settle - there will be a closing date for the offer. It will only get the shares if enough are tendered.

What happens if there is a shortfall in the tender may be decided afterwards. Perhaps nothing , or an on-market purchase authorisation, or a write down of capital and a capital return, or a special dividend. There's more than one way of skinning a cat.

[velocytongo] 01/2/2021 15:45

jw, that's why it's being done as a tender and not an open offer. that way brokers will notify all the registered owners. this is by far the fairest way and everyone gets a opportunity to participate (or not)

crys, that's exactly what happens

[football] 01/2/2021 14:11

Look at TRMR doing the same thing? share price 85p to £5plus now