Zytronic Share Discussion Threads

[gleach23] 06/3/2022 12:18

Good to see the buyback resume in earnest on Friday. Unusual for them to RNS it same day but 85k bought back at an average of 149p.

[boonkoh] 04/3/2022 15:53

Looking at the trading pattern today, looks like the share buyback has recommenced with the new authority granted at the AGM.Good to have a buyer of last resort during these turbulent times! And a good time to do buybacks to boost shareholder returns and offer liquidity to forced sellers.

[elsa7878] 03/3/2022 11:28

Re Singer. They are not going to return to 2018 levels due to the reduction in financial revenues. Hence rev of 16/17 more realistic than 24.
Interestingly they win 50% of the contracts they quote for.....

[rimau1] 03/3/2022 11:13

Welcome Riv! Singer don’t even mention the £9m of cash and buy backs which really underpin any macro led downside here. I topped up this morning.

[rivaldo] 03/3/2022 10:31

I've bought some this morning for the first time since selling out aeons ago.

Good summary above by elsa78. Not bad for a mere £17m m/cap, and the buybacks should support the share price nicely.

Singer this morning reiterate their 250p target price - with "further potentially meaningful upside" from there - and Buy recommendation.

They summarise:

"Zytronic has issued a positive AGM update, confirming a continuation of the more positive trends reported at December’s prelims. Revenues for the first five months are c.25% ahead year-on-year and operating margins have been maintained at the improved levels of last year.

The order book is 45% ahead, providing visibility for the coming months. We make no changes to forecasts this morning and continue to see further recovery potential beyond the forecast period. We reiterate our 250p TP and Buy recommendation."

"Impact on earnings & valuation

The trends reported in today’s statement continue the key themes of December’s prelims and are supportive of our full year forecasts, to which we make no changes this morning. In terms of valuation, we set our TP based on a blend of the Group’s 10 year median average P/E (14.2x) and EV/EBITDA (7.7x) multiples, applied to a prudent, partial profit recovery scenario (£2.0m PBT). This results in our 250p TP and Buy recommendation. A full recovery to FY19 (£3.1m) or FY18 (£4.5m) PBT would clearly imply further potentially meaningful upside."

[elsa7878] 03/3/2022 10:00

2022:
Forecast:
Revenue £13.8 million.
Pre-tax profit > £1 million.
Net cash £9 million.
Property £6 million (not revalued since 2009).
Key is travel re-opening so they can meet clients and go to trade shows.
Then expect revenue targets of £16-17 million, pre-tax £1.5 to £2 million.
Long term fixed energy deal in place. Nice!

[richie32] 03/3/2022 09:57

Good stuff...and they are taking a few off the books every few days.

[bones] 03/3/2022 07:18

Short and sweet. Classic Zytronic!

“Hmm, what else can we say…..no, that’ll do, they will get the gist and I need to get off home.”

[tole] 03/3/2022 07:02

The first five months of this financial year have seen a continuing and significant improvement compared to the same period last year, principally driven by the Gaming sector. Revenues for the first five months are approximately 25% ahead year-on-year and we are maintaining operating margins at the improved levels of last year. The order book is 45% ahead of the same period last year, partly benefitting from some advance orders which improves visibility for the coming months and allows us to plan for any of the well-publicised electronic component supply issues.

[elsa7878] 02/3/2022 19:31

You will get one...I know you know!

[boonkoh] 02/3/2022 00:02

bones: that's why I invested last month. Gaming is roaring back in Las Vegas. Other parts of the world too (except Macau).Plus management made an active decision to activate the buybacks, having sat on the authority for 11+ months. This was a covert trading update, that things are going well enough. I look forward to a potential AGM statement.

[bones] 01/3/2022 18:34

Upbeat final results today from Everi Inc in USA. Part of their business is in supplying slot machines and gaming units for casinos, which should read across to Zytronic's gaming division for touchscreens. Las Vegas is chiefly where ZYT's screens end up, apparently little ends up in Macau.

Comment from Everi:

"Despite a year that began with substantial pandemic impacts, our Games business achieved record gaming machine unit sales and ended the year with a record-high gaming operations installed base. Our FinTech business generated significant year-over-year quarterly growth in same-store financial access transactions and funds processed that exceeded historical growth rates and our Loyalty and RegTech software solutions recorded double-digit revenue increases.

"Our operating momentum has been driven primarily by the strength of our high-margin Games and FinTech recurring revenue operations. Momentum in our Games business is evidenced by the achievement of the 11th consecutive quarter-end increase in our installed base of gaming operations units, inclusive of higher-earning premium units that helped drive a year-over-year increase in daily win per unit. Record quarterly slot machine sales of 1,910 units, a 62% sequential increase over the strong 2021 third quarter unit sales and a 42% year-over-year improvement over the 2019 fourth quarter, reflect continued growth in our ship share of replacement units. With annual industry replacement sales expected to increase in 2022, the investments we have made to expand and extend our Games portfolio have positioned Everi to achieve consistent progress towards our longer-term target of a 15% ship share for units sold."

[asagi] 27/2/2022 14:03

That mysterious outfit, Woodland Investment Management Ltd, having bought 460k or 4% for around 170p less than a year ago has sold 145k of them. Certainly at a loss and possibly back to the company.

certainly plays into management's strategy of the buyback. Maybe there was some understanding/expectation that they were sellers? Great for shareholders as it likely reduces the cost of the buyback.

Asagi (long ZYT)

[bones] 25/2/2022 16:59

That mysterious outfit, Woodland Investment Management Ltd, having bought 460k or 4% for around 170p less than a year ago has sold 145k of them. Certainly at a loss and possibly back to the company.

Seemed a weird buyer in the first place given their business is actually woodlands!

Does no one let their investments run these days?

[cerrito] 23/2/2022 14:46

Yes 67.5k shares bought back yesterday impressive and it would take a month plus at that rate for them to do the 1.7m shares.

[gleach23] 23/2/2022 14:20

Spread quite tight too now @ 1.4911 - 1.519 for decent quantity.

Hopefully a precursor to some upwards movement...

[boonkoh] 23/2/2022 13:59

I see there's a struggle to find sellers today, at a +/-5% price for the buyback. Bodes well for the next leg up in price.

[boonkoh] 22/2/2022 11:25

Looks like lots of shares mopped up today in buyback. Keeping the price steady despite the steep falls elsewhere.

[gleach23] 22/2/2022 10:56

Judging from the trades this morning, hopefully they've ramped up the buyback today. They weren't going to get very far at yesterday's rate of 5k/day.

[dozey3] 21/2/2022 18:08

Agreed, considerably undervalued, and buybacks could make sense, but it does mean an already very small company becomes even mor illiquid. Lack of international trade shows during Covid have greatly reduced sales opportunities, and one can’t help wondering if that area could be reinforced to great advantage. Buy-backs smack of negativity in my book, but then wdik.
Doze - long-term holder.

[c1d] 21/2/2022 13:29

IMO the cash being allocated to the share buyback would not be required to fund even a substantial expansion of the business. The historic data shows ZYT has been highly cash generative even during growth phases and, given the size of the existing cash pile, I see the buyback as a return of truly surplus cash, and not pointing to future stagnation or decline.

[bones] 21/2/2022 12:48

I had a discussion with management after the finals in December and one of the questions I raised was about the listing. The broad answer was that it adds a significant air of respectability and solidity in the minds of customers and prospects.

On the question of company ambitions, which were severely hampered by the Covid crisis, they said there is a new cycle of products coming out of R&D and that it is always beneficial to display these at trade shows. Growth usually follows in a multi-year cycle (as it did from a few years ago before the cashless society trend hit the financial sector of Zytronic's output).

The overriding feeling I had was that, once trade shows are back in flow (and a couple of big ones were recently postponed until the Spring months), there could be an uptrend in business for a good while.

Clearly, currently, the company is still feeling its way out of the Covid-induced plunge in business activity but, as the last reports indicated, the recovery is underway.

For my money, the market has yet to give any credit for that so I do not blame the company for using a bit of surplus cash to buy into its own cheap assets and add scarcity value to its shares!

At some point, this company could become a tasty morsel for a bigger outfit. (My opinion, not the company's!)

[mr5k] 21/2/2022 11:44

that's very constructive, she-ra. thanks for putting me straight, too. Especially from someone unaware of the issues around micro cap.

[she-ra] 21/2/2022 09:01

Its all terrible Mr5k. Its going to zero. Thank you for putting us all straight.

[mr5k] 21/2/2022 08:58

there is a question worth asking here and that is, what is the purpose of a listing? An exit for a private co (na here), a vehicle to incentivise management (na here. management shareholdings are low), a currency for acquisition/development (na here. management are not keen to expand outside its niche).

the only reason i can think of is that it helps with marketing and sales people can point to financial strength when bidding for multi year contracts and that is worth something. Against that should be weighed the cost and distraction of a listing.

she-ra, if you think there is exponential growth, then management should be holding onto the cash to invest in the business: more marketing staff (in particular for the interiors market); funding capex (new machinery); and working capital.

mr5k