Zytronic Share Discussion Threads

[adamb1978] 20/5/2016 17:53

Decided to sell in the last couple days. There's a lot to like about ZYT: cash balance, track record, yield, etc, however the interims weren't great and the commentary was pretty bear-ish in tone and had little which might lead you to believe that the co might grow the top line over the next 18-24 months.

My biggest concern is that EPS growth this year will be, at best, low single digit and therefore at the end of the year, Mr Market might look at that growth and decide that a PE of 16x or just under 14x excl cash isn't warranted.

I therefore think that there's more downside than upside over the next 6-12 months and expect to have the opportunity to re-purchase at 320p within the next year

All the best to holders

[topvest] 18/5/2016 12:49

Happy to hold given they are on a P/E of 12-13 excluding the cash. Not bad at all for a growth business. It's profits and gross margins that matter and they are both growing nicely.

[bared_bones] 18/5/2016 11:55

I've taken money off the table at moment. The growth is considerable on the one side of the business where the competitive advantage is (and trend) but want to make sure the tipping point is reached first. Period of stabilisation and feel price will drift accordingly but will be keenly looking at updates in 2016.

[rcturner2] 18/5/2016 11:27

I'm a long term holder and this is my best performing share.

I am perfectly happy holding here, I don't see the interim results as altering my investment case.

However if revenue did not increase by say the next interims I would be more worried.

[cockerhoop] 18/5/2016 11:09

RCT,

If you take away the cash of 65p per share the PE is 12.5, for a company with operating profit margin of > 20% in an interesting niche - I don't think that is excessively expensive.

[az4hr] 18/5/2016 10:35

It's probs gonna go down all the way to 350p double digit growth is not enough for some ppl good luck taking ure money out of here nd finding something better

[rcturner2] 18/5/2016 09:38

PE of 15 is about right here.

It is very hard to maintain double digit top and bottom line growth every year.

If we get a pause occasionally, that does not worry me.

[cockerhoop] 17/5/2016 15:35

Fair enough melody9999, but remember ZYT usually H2 weighted and inline with market expectations.

Just comparing 1st halfs

2015 H1 EPS up 13%, 2016 H2 EPS up 10%.

[glaws2] 17/5/2016 15:02

CEO interview with Paul Scott on his website

www.qualitysmallcaps.co.uk/ceo-or-fd-interviews/zytronic-zyt-ceo-interview-17-may-2016/

and the presentation is on ZYT wesite here

www.zytronicplc.com/wp-content/uploads/sites/5/2016/05/2016_May_Interims_FINAL.pdf

[cockerhoop] 17/5/2016 13:04

What underperformance?

[melody9999] 17/5/2016 12:47

Same for me Owenski. Disappointing interims and nothing to get excited about going forward. I'm out too and actually a bit surprised the share price has held up given that any underperformance can get harsh treatment - especially at this time of year. Worth re-visiting around 300p if the opportunity presents perhaps.

[igoe104] 17/5/2016 12:45

The company is up over 8% profit from Q1 last year.

9.5 million in the Bank.

And are selling products in the fast growing gaming market.

Divi rising another 10%.

Hardly a disaster like some are making ?

That P/E will drop when Forecasts are revised.

[owenski] 17/5/2016 10:58

Been a good run for me, am out for now.

[illiswilgig] 17/5/2016 10:31

The decline in 'traditional products' masks the growth in new products.

Forecast on digital look is for just 2% growth in profit this year whereas last year saw 26% and the average growth in profits over the last 5 years is around 15%.

H1 has given 10% growth in profits from increase in new product sales at higher margin but masked by drop in 'traditional products'. Outlook statement for H2 tends to imply more of the same in H2 with a special mention for gaming curved tables in the chairmans statement - which gives a steer as to where the growth is coming from.

But the forecast figures on Digital Look show only 2% profit growth for the current year. Though as usual I am somewhat confused by DL as it seems to show posttax earnings for the historic data and ?pretax? for the current year?


To hit 2% for the year they only need 15.3p in H2 and that's a drop in H2 over last year?

With 10% under the belt in H1 and an understated but confident outlook statement I don't see a drop in H2 profit as likely? So expect them to outperform the 2% shown on digital look ?


The 16 or 17 P/E (on todays price) looks expensive for a smallcap growing at 2% a year - but looks reasonable for a smallcap sitting on a growing pile of cash and growing at 10% a year, 15% averaged over the last 5 years?

Happy to hold at the moment,

cheers

[fizzypop] 17/5/2016 09:27

Net cash of £9.5m is 15.8% of market cap at £60.18m.
About time a special divi was considered me thinks.

[salpara111] 17/5/2016 09:22

Owned this one over a year ago and made a decent profit.
I struggle now with the valuation.
Clearly the results were solid but the fact that they were not able to grow the top line at all is concerning for such a relatively small company.
The shift to higher margin products is good but that has nearly run its course so any further growth has to come from the top line.
Current valuation still prices that top line revenue growth.
I would not be panicking if I were a holder but equally I would be uneasy that they are not able to grow the business.

[az4hr] 17/5/2016 08:36

Were those intercoms realli worth a 6.5% hit

[rivaldo] 17/5/2016 08:19

Hi Glaws2. I mostly use online, with traditional occasionally, and this morning I was able to sell online. Not sure how long that would have lasted given ZYT's illiquidity!

[shanklin] 17/5/2016 08:17

Nice one rivaldo

I only have a few but was not quick enough off the mark.

[glaws2] 17/5/2016 08:11

Rivaldo - agreed - but I tried to sell on the bell and couldn't get filled. Do you use an online broker or a traditional one ?

[rivaldo] 17/5/2016 08:08

I sold quite a few on the bell at 417p etc.

A very good company, but the interim figures don't really justify the rating at 420p or so. And ZYT is quite illiquid, so I could see the share price dropping a fair bit given reasonable but rather unexciting numbers.

[shauney2] 17/5/2016 08:07

Very good.
Revenue down a touch but EPS up with touch revenue increasing margins.
Cash well up £9.5 million,well over 50p per share.Dividend up also.

[impvesta] 17/5/2016 07:58

Interims out today:



Look solid if unspectacular at first glance

[fizzypop] 16/5/2016 09:19

Up 4% today in anticipation of good results tomorrow. Management usually under-promise and over-deliver. A good long term hold with strongly increasing divis each year.