Hardboy
16 Apr 2018
Re: Finals Still no finals. Still no announcement of when the finals will be. The Financial Calendar on the company website is blank (so why is it there?) I dropped an e mail to the company in the middle of last week asking when they will be released, and have not had the courtesy of an acknowledgement let alone a meaningful reply. I am far from impressed.
II Editor
16 Apr 2018
NEW ARTICLE: Buy, hold, sell: Why I'm still backing FeverTree "Ketan Patel, co-manager of the FUND:FR60:EdenTree UK Equity Growth fund alongside Philip Harris since 2016, says he tends "to avoid speculative growth or "blue-sky" companies". "We prefer growth firms driven by profitability, underpinned by ..."[link]
claude reins
03 Apr 2018
Re: Finals Easter - wth the 2 day holiday - is very early thus year. There are few statements this week. Probably next week the reporting will pick up again across the board, including Luceco I guess.
Hardboy
03 Apr 2018
Finals Does anyone know when they will be announced. According to Guardian Brokers it was to be today; but nothing at 7
0. According to the co. website nothing is happening this year. (Useless!) Last year it was 3rd April, so today would make sense.
Hardboy
27 Mar 2018
Re: Good news that Prudential have taken a s... I'm sitting on my hands till the Finals.
claude reins
27 Mar 2018
Good news that Prudential have taken a significant stake Over 5% now, so that is indicative oof institutional view of value going forward for LUCE. I put Weak Buy because of the Pru's actions, but I dont think that we can for certain say that is a strong buy until the FD gets well into the business and sorts things out. Still a growth opportunity, and then the SP could start to climb sustainably.
claude reins
07 Mar 2018
Been in touch... ...with the advisors.1. The 0800 posting of the Trading Update followed the rules - to give out the relevant information as soon as it was available. In this case they had worked through the night, presumably to find the right words!!!!!2.When wwere the prelims expected. The final date has not been determined, but it is anticipated that it would be a similar date to last year, ie early April.My view is that they have thrown the kitchen sink at this year's financials - as far as the new FD can be certain - and that they can turn round the business, more specifically the finances of the business. There are some encouraging words; some of the enterprises are doing well; they expect a tun round in H2 18, not a promise of H2 19!; they are profitable; they have grown. I would also like to remind myself, and others, that they have got a heavyweight FD in from day 1 - well I actually believe that the FD was on the way out at the same time the CFO guy left some months ago, and they have been looking for someone since for the FD job. He is well versed in international business; in the building and associated trades. I look forward to a better managed set of information with a clearer views of the future at the time of the prelims, though not a long time to go till then.In the meantime, I am a holder - yes, I would have liked to have got out at the much higher price a few months ago. I anticipate that the SP will make some sort of recovery after the slaughter yesterday.
Hardboy
06 Mar 2018
Re: Shock horror where's the sink plug Number biter will no doubt soon be back saying he predicted the second announcement, and full marks to him - he did.But I don't think it is as bad as it looks. "The profits are doing a good impression of water in a sink when you pulled the plug "Not entirely true. If we forget previous forecasts and see 2017's post tax profits will be around £11m on a turnover of £168.6m then we see an increase over 2016 of 13% in profit & 26% in sales. And the forecasts for 2018 predict sales rising by 5-10% & profits by between 9% & 32%. Many businesses would kill for that sort of growth. Some of the reason for reducing the 2017 profit figure is nothing to do with the success or failure of the business, but accounting practices, moving some costs from capitalised items (which would only be partially included in this years figures) to P&L items, such that the total costs are included in the figures. How much of the decrease is due to this we don't know. There were also some positive items in this morning's announcement, which are not reflected in the share price movement. "the Group is seeing continued strong growth among higher margin trade, projects and international customers.""most parts of the business continue to grow strongly ""on track to return margins to long term expectations during H2 2018""The business remains well placed to capitalise on its market leading position and EPIC Investments LLP, the Group's largest shareholder, is fully supportive."Doing a quick calculation, 2017's EPS looks like it will be around 7.6, which puts the valuation on a PE of around 6.5 for a company growing at a healthy rate. Numberbiter will no doubt remind us of his warnings over debt and stock; which are of course valid, and I will hold off any actions myself till the full set of results are out; but with Net debt at 36.9m and post tax profit at 11m, debt is high, but plenty of growth companies have higher debts; and profits are due to recover so, unless debt increases the ratio will be reducing. Plus the statement said UK retailers have been destocking, so maybe their replenishments will reduce LUCE's stocks a bit. No recommendations at this stage.And WHO releases trading updates at 80 a.m.? Get it out at 7!
Peermade
06 Mar 2018
Shock horror where's the sink plug The profits are doing a good impression of water in a sink when you pulled the plug by accident. Why didn't I short this at 110p.
numberbiter
22 Feb 2018
Re: CFO change Hardboy, if I were you I would be very worried by the level of stock. I agree that 'stock days' should be measured taking future growth into account. Based on what we know so far a reasonable estimate would be the company could achieve growth of 25%. So, if you multiply the latest costs of sales x 2 (because they are half year), then by 1.25 and then apply the formula, you still come out at 135 days, which is far too high for this business. The market knows which is why the price continues to drip down.
Hardboy
22 Feb 2018
Re: CFO change You're right TX - there can be all sorts of reasons. Maybe manufacturing practicalities are such that it is better to run large batches, so they make more at a time than the immediate demand; and I've already mentioned the shipping factor - you need to fill containers to make shipping the most economical, and it could be there are certain ship runs which offer better deals. And of course they are supplying a sector which is growing quickly; and one of the worst sins in business is to have a customer wanting something and you can't supply it. Maybe Local Councils are big customers, and they know every council places orders at the same time of year. Large stock, in itself, of high growth products does not overly worry me.Reserving judgement till the next update.
TX2
21 Feb 2018
Re: CFO change This is quite a complex business;it is manufacturing goods in China about half of which it supplies to its own wholesale division mainly in UK for ultimate sale.It also assembles products in UK in part from its own manufactured products.In theory the company should be demand driven & make only products that it can sell;but one wonders with the large level of stock that seems to have been built up if it is manufacturing leading with large amounts of stock being sold to its own extended wholesale supply chain which ultimately it cannot sell.The manufacturing division will have booked a profit on the sale of the unsellable/slow moving stock.So for a time things will not look too bad;until the overstock catches up with you.The business & its products clearly have merit as it has a good share of the market in its various fields but it is possible there has been a lack of discipline in its manufacturing & stocking policy.
numberbiter
21 Feb 2018
Re: CFO change Claude, a constant drip down in price is usually an indicator that a big fall is round the corner. When the new FD has worked out how much stock to write off, then that will be when it happens. Besides, the market is clearly not good; Dialight shares have been in the doldrums recently.This company is in a mess; the new FD has a job on his hands. I hope he is successful in saving the company but it is going to take some time and there will be much pain along the way.
claude reins
20 Feb 2018
Re: CFO change You may well be right about the latest goodbye as an indicator of things being worse than we might have thought. I have another scenario which is that the intention when the discrepancy was found was that a new financial team was needed, which included David Main. To say goodbye to both CFO and Financial Controller at the same time would have been even more unsettling. It was agreed that he would stay on for a while until an appropriate successor could be found and it appears that has happened because he starts straight away (which is quite unusual. More normally they go through a process of finding a successor, temporarily appointed and then confirmed as a member of the Board). So I am hoping that my scenario is correct.I do agree with you about the dividend. Perhaps it is personal preference and in institutional circles it seems that the dividend has a more important part to play than for me where I am looking for growth in value by an increasing SP.In the meantime, we will wait and see. Certainly, I think that a Board shake up is needed in due course to give more ongoing expert support to the CEO. The current NEDs may well have been appropriate for coming to the market. They are less likely to be of great value going forward. In addition, at worst they have been complacent about how the business was being managed, at worst they wouldnt have appreciated the source and nature of the problem because long-distance production and valuation issues seem to be outside their CVs.
numberbiter
20 Feb 2018
Re: CFO change If the CFO has gone as well as the Financial Controller, you can take it that things are worse than previously reported. You can bring in as many non-execs as you like and appoint a super charged CFO, but it won't achieve what you all expect.The facts are that the company is highly indebted and has far too much stock. This is NOT the time you go for growth as this increases working capital and puts debt even higher. The only sensible strategy in this case is to concentrate on shifting existing stock and getting debt down. There should be no further dividends until the finances are back in control. If they don't do this the company is doomed.
