Zytronic Share Discussion Threads

[capercaillie] 16/5/2017 07:32

Net cash pile growing

[george4064] 16/5/2017 07:24

Solid set of interims. :)

[rcturner2] 16/5/2017 07:21

Happy days.

[fizzypop] 16/5/2017 07:18

Interim Results for the six months ended 31 March 2017

Zytronic plc, a leading specialist manufacturer of touch sensors, announces its consolidated interim results for the six months ended 31 March 2017.

Overview

-- Group revenue of GBP11.3m (H1 2016: GBP9.9m)
-- Touch revenues increased to GBP10.0m (H1 2016: GBP8.3m)
-- Gross profit margin improved to 43.1% (H1 2016: 42.3%)
-- Profit before tax increased to GBP2.5m (H1 2016: GBP1.8m)
-- Basic earnings per share ("EPS") increased by 44% to 13.8p (H1 2016: 9.6p)
-- Interim dividend increased by 10% to 3.80p per share (2016: 3.45p)
-- Net cash increased by GBP0.9m to GBP12.5m (30 September 2016: GBP11.6m)

Commenting on the results, Chairman, Tudor Davies said:

"The second half of the year has started well and is in line with expectations and on this basis we expect to make further progress in creating value for shareholders."

[topvest] 15/5/2017 11:14

Yes, maybe some news on a special dividend as well.

[rcturner2] 15/5/2017 10:46

All time high reached now, heading into the interim results this week.

[rcturner2] 05/5/2017 15:40

nothing really

a few sells on a small stock

[denbos] 05/5/2017 12:22

What has happened today to make the price drop?

[qs99] 11/4/2017 11:29

and some more...

[qs99] 31/3/2017 12:14

OK now it is going for it

[qs99] 31/3/2017 11:43

yup and some more slowly and surely

[rcturner2] 30/3/2017 08:01

Pushing back up to the all time high.

[qs99] 29/3/2017 14:20

buyers out again today

[shauney2] 17/3/2017 09:28

Good explaination of the nature of the business and the lumpy orders from Richard Beddard.



Watch: Zytronic (ZYT)

Touch sensor manufacturer Zytronic's (ZYT) results can be unpredictable. The company's big weakness is that it relies on three major customers for 58% of its revenues.

If a big customer stocks up in one year, it orders less for the following year; and there's always the risk Zytronic will lose the business of a significant customer altogether.

Having stocked up on displays for its vending units in 2015, Coca-Cola ordered far fewer in 2016, sending vending into third place behind the gaming and banking industries in terms of revenues earned by Zytronic.

Although the company managed to lift profit marginally in the year to September 2016, in previous years when it has experienced de-stocking that hasn't always been the case.

In mitigation, Zytronic's sensors and screens are designed into its customers' products, so it tends to remain a supplier for the product lifespan. Zytronic's patented sensors sit beneath glass up to a centimeter thick, enabling the screens to withstand vandalism and harsh environments.

As well as vending machines, it supplies screens for slot machines and ATMs. One of the glitzier applications for the sensors showcased in its annual report is a digital roulette table housing an 84-inch screen.

Though profitability undulates, over the last decade Zytronic's return on capital has never fallen below 8%, and strong cash flows in recent years have allowed it to pay down debt.

The company's cash balance net of very modest borrowings stood at over £11 million at the year end. A share price of 390p values the enterprise at £40 million, about 15 times adjusted profit in 2016. For long-term investors, the shares could make a good investment.

[cockerhoop] 16/3/2017 16:56

Droid,

No recurring revenue as such (ie licence or service). The ZYT touchscreens are designed into customer products which can though be sold for several years so in that sense a customer continues to be supplied by ZYT for a number of years.

[droid] 16/3/2017 16:23

Am considering buying in here - can anyone please tell me if there is any element of recurring income here or is it all one-off sales.

[ganthorpe] 16/3/2017 14:42

Hi galeforce. You were asking about aim shares in a sipp ref inheritance tax. Sips I believe e can be passed on in toto without hit. Worth confirming with your sipp manager and nominating Beneficiary damn this predictive text without hit should be without I H T

[kalkanite] 15/3/2017 14:19

It's quite a substantial cash pile for its Mkt Cap. My personal preference would be to buy back shares or a special dividend unless the company has something else in mind. Zytronic is very cash generative with a very low price to FCF of 13.7

I'm not a fan of companies retaining cash as a comfort blanket which seems to be the case here, either get it to work for you or redistribute it via buy backs or dividends.

[bestace] 15/3/2017 14:05

I think it's difficult to read across from one company to another with these sorts of corporate transactions. ZYT have plenty of cash available and the cash pile has been growing year on year. I think it's possible the issue with the reserves had been preventing them from distributing more of that cash back to shareholders, but I'm not invested here just for any potential special dividends.

I do think they need to do something with that cash though, it's just a wasting asset otherwise. They haven't really been growing the top line so it doesn't seem like the cash is needed to fund expansion. If they're not interested in M&A then what else is there other than paying it back to shareholders?

[mattleplonk] 15/3/2017 13:55

The 'no immediate plan' was stated in the notice of AGM, so the fact it is being reiterated in the process announcement shouldnt I believe be seen as new or cause for concern.

[bones] 15/3/2017 12:40

bestace, the same situation arose in another investment I had, PEG, where they arranged the capital reduction in late 2015. Yesterday, with the 2016 final results, when I expected a maiden dividend (which they could have financed), not a peep was mentioned. One investor believes the directors are waiting to convert all their loans into shares first!

Anyway, the reduction is likely a long term plan. As you say, it is not "never".

[bestace] 15/3/2017 12:28

"no immediate plan" isn't the same thing as "no plan". Why would you spend all that time and money on getting the capital reduction through unless you were going to do something with the reserves? It's not as if trading is so poor they need the reserves to continue paying the existing dividends.

[bones] 15/3/2017 12:18

kalkanite, the RNS also says:

"furthermore there is no immediate plan to return capital to Shareholders, whether by way of any additional dividend, a share buy back or otherwise."

[kalkanite] 15/3/2017 12:11

Confirmation of capital reduction...



Special dividend on its way?