Zytronic Share Discussion Threads

[gleach23] 13/2/2022 17:56

Noteworthy trade reported late on Friday of 136,938 shares @ 130p timed at 8.31 that morning.

Distressed selling for sure but recent trade sizes suggest more than just PIs exposed to bombed out Covid stocks bailing?

[bones] 11/2/2022 16:52

The AGM is on 3rd March so I hope we get an update of current trading patterns. Hopefully, things are not too affected by external headwinds and the market can get back to recognising some enterprise value, which currently is little more than £6M, including land and buildings.

[trident5] 11/2/2022 11:30

Land will be what the properties are sitting on.

[boadicea] 11/2/2022 11:14

(Double entry deleted)

[boadicea] 11/2/2022 11:13

Annoying to think I could have had them even cheaper if looking an hour earlier. However, very happy with 139p. Perhaps late trades will reveal a dump shortly.
The dip doesn't seem to have triggered many stop-losses (unless they're big enough to be delayed).

[illiswilgig] 11/2/2022 11:11

Elsa - property assets. Well done. It's intrigued me before. You beat me to it I've just been looking at those. They paid off the last of the mortgages in 2017 according to companies house - against a bunch of land registry numbers all to the east of Whitely road.

Seems very conservative that they have kept them on the books at cost and depreciated both the freehold and long leasehold. Hard to believe that the market value is not higher now.

There is also 207k of land on the books at cost. Where is the land? I can see the 3 buildings - but no obvious land. The only thing I can think is that they bought out the freehold on the leasehold property at the same time? Unless the board has a pony-field across the way? No way to know short of asking them, I guess.

cheers

Illis

[illiswilgig] 11/2/2022 10:57

Yes indeed EC - good to hear that you think its cheap - and that you are on board.

In terms of technology, IP, products and markets, seems to me its a different company from the ATM screen maker of a few years ago.

cheers

Illis

[effortless cool] 11/2/2022 10:48

Thank you - glad to be back!

[bones] 11/2/2022 10:30

Welcome back to your thread, EC!

Sounds like a shrewd purchase at this level.

I’d be amazed if Zytronic is not a sitting duck for its assets with IP and business thrown in for free.

[pugugly] 11/2/2022 10:06

Offer now below the buyback tender price -
Could stop losses now being triggered for those who bought back in.
Also could the chip shortage be having a significant impact?

[elsa7878] 11/2/2022 09:55

The property assets were bought in 2006 and 2009 and had a combined value of £5.7 million and haven't been revalued since. (Indeed in keeping with accounting rules they have been depreciated).
Unless they bought 3 duds (2 freehold and 1 999 year leasehold) they should have increased in value.
So now sitting below cash and property assets (£16 million) and scheduled to make £1 million this year (though I can't find any hard figures - are there any?).

[effortless cool] 11/2/2022 09:44

This does look cheap now. I have bought back in for 37k shares.

[bones] 11/2/2022 09:18

So, at the current 132.50, market cap is £15M and the company had £9M+ in cash at its 30/9/21 year end along with a net asset value of its freehold and leasehold properties of £4M. There’s barely anything ascribed to the company’s actual operating business.

The market must assume that inflation, supply chain, geopolitics etc will wreck the plans!

As gleach23 has said, there must be a distressed seller.

[gleach23] 09/2/2022 17:20

Late reported trade of 39,693 shares @ 132p timed at 15.01

Fingers crossed that was our seller clearing.

[gleach23] 08/2/2022 18:12

Thanks bones - suspect you're right there. Babies and bathwater, as you recently commented.

[bones] 08/2/2022 16:38

There's likely a solid supply of distressed sellers in the retail market right now, selling stuff to cover their calamities on the higher rated stuff that's dropped 50%-80% in the last 6 months. There are a lot of them!

[gleach23] 08/2/2022 14:23

Surprisingly one can currently buy up to 16.5k @ 149 online and only sell up to 3.75k @ 145.1

I took some more @ 149 but will keep powder dry on a further top up in case it hits support @ 140

Seller still appears to hold sway for the moment.

[gleach23] 07/2/2022 23:07

The selling seems moderately persistent - wouldn't be surprised to see 155 on the Offer again tomorrow.

[mr5k] 07/2/2022 21:41

5k seems the optimal offered side.

[bones] 07/2/2022 17:00

Well played, Mr(4x)5k!

[mr5k] 07/2/2022 16:52

Just picked up 20k shares at the offered. And then the MMs moved the price and I backed off. At 3.2 times EV/Ebitda, it's difficult to see how one can suffer a permanent impairment of capital.
mr5k

[elsa7878] 06/2/2022 23:15

Over 75p of the present market cap is cash. So if eps forecasts are say 10p then the present forward rate is more like 7.5x.

[illiswilgig] 06/2/2022 21:49

Good points all - thank you.

I agree that the current share price is most frustrating. And quite uncomfortabe. Makes me question my thinking.

The 7.4p eps forecast for the current year looks too low to me and does not help interest in buying the shares. It's not been raised since before the FY results in December so it looks out of date to me. But then ZYT is not alone in falling backwards - a lot of small caps are in the same boat right now.

Management tends to be cautious almost to a fault especially in respect of shareholder communications. Though I commend the straightforward accounts and especially the accompanying presentations.

A couple of points that I've noted. The full year eps is understated by a small amount because of the weighted average of shares used by the accounts. Should be more like 3.6p rather than 3p,

Which makes the current year forecast look like 2x last year. Except that the eps in H2 was more like 5.2p adjusting for the loss in H1 and using the actual number of share in issue instead of the weighted number of shares.

Fully year eps based upon 2x H2 would be more like 10.4p

But that makes no allowance for the increase in sales so far this year. At this point I'll cut management a bit of slack - as it's been impossible to predict the impact of the pandemic and rolling lockdowns upon trade and recovery. Another variant could easily knock things back a bit. Even so - if things continue as they are I expect them to do better than 10.4p

Maybe I've got something wrong here in my thinking? That would not be the first time. But in my view current share price is more like 12x - 14x likely current year earnings. And as you say with the cashpile going on over half the current market cap - looks cheap to me.

Accordingly I've been rummaging around in my back pocket and down the back of the sofa for a few spare quid and bought some more.

Is it too much to hope for some positive words at the AGM given that H1 will be all but done and dusted? The silver lining with the lack of liquidity is that it won't take a lot of demand for the shares to rising again,

cheers all,

[sturmey] 06/2/2022 20:55

Cerrito

In answer to your question, I have attended 2 AGMs in recent years (pre-covid). Both were followed by informative and helpful factory tours. The company is certainly not averse to engaging with private investors. I have a decent-sized holding (£six figures). First bought in 2013 but most of my holding bought in 2020 at under 100p.