NPX - Good result

[winner69]

Clearasmud .. those raw material prices starting to hurt I think

In addition did you note that both Feltex and carters have been surprised how quickly the building downturn in Australia started to bite.

Also read some reports on how the likes of Wattyl (a resin user)have reported pretty slack demand for paint.

Margin pressure and declining demand not good combo while focusing on getting a new business merged into your own

That $32M touted as this years NPAT still looking shakey .... lets say about $28M ....say 37/38 cents per share and apply the 11 pe they were trading at and 407/418 is the answer

Wierd eh ... todays price 415.

But then hasn't the whole market going through a rerating ... to keep its relativity a pe of under 10 might be justified .... and NPX goes under 400.

[floyd]

well its out, profit downgrade, now looking at 33-34 mil with net surplus being 28mil...

wait for the dust to settle before looking at re-entering

[clearasmud]

might be good for a trade.
But this business should be considered high risk now.

was the co overambitious?
Will they be able to maintain margins in a recession?

[Paper Tiger]

You seem to have a precise call witht regard to the earnings? W69.

[nelehdine]

Well done W69 ... certainly made me think twice ( and buy HBY at 540 instead !! ) before jumping in at around $4.30 ... cheers !!

[winner69]

Those old time managers at NPX must be gutted in having to come up with a profit warning .. they are not experienced at doing them are they

Last time they had an embarassing moment was the Medihold fiasco a few years ago when they had to reduce the announced full year profit of $13M odd to $1.3M (that wasn't an acquisition that went wrong was it?)

Where NPX is scaring the market is that the latest profit guidance is somewhere away from the expectations they have recently laid.

Remember the 10% EPS increase they were touting about six months ago. No time frame when it was going to be delivered but the ongoing profit levels they were 'framing' in peoples minds was about 50 cents a share

Fridays guidance says this years earnings about 36.5 cents .... thats nearly 30% of the expectations they have 'framed' in peoples minds

And 388 is about 30% of the high (message there?) but there could be some more weakness on Tuesday as many punters went home esrly on Friday for the long weekend

Ooops ... the bad news late on friday before a long weekend trick ... surely not from Hirst and Hollands

[Lizard]

Hoping there are some similarities to the APS acquisition here - prior to acquisition, EPS must have been around 19cps (can't find exact figures). Dropped to around 12.5cps after acquisition (big effect from share dilution). Next year, back up to 21cps and then a big jump to 31cps as the acquisition bedded in...

Tried to do some kind of PEG analysis on Nuplex yesterday to figure out where the P/E should be. But being somewhat cyclical, it really depends on what timeframe you choose to analyse over. Probably should be around 16 at the bottom of the cycle and 7 at the top...probably ends up the other way around, making for a great buying opportunity in another year or so.

[winner69]

Good points Lizard and hard to get a real feel for what is a fair rating for them.

What gets me is that NPX earnings are pretty choppy - not much consistency in them as shown below.

YR NPAT EPS Growth

1998 1.1 2.2
1999 11.6 21.2
2000 16.7 29.2 37.7%
2001 13.1 22.9 -21.6%
2002 12.6 21.4 -6.6%
2003 20.7 34.1 59.3%
2004 28.4 45.9 34.6%
2005 28.0 36.5 -20.5%









(*** the big post announcement writedown not included. Actual reported NPAT in 2001 was $1.3M)

Taking 1999 as a good solid base year average EPS growth has been 13.8% but on a compounding basis EPS growth has been 9.5% pa over the last year. The impact of the recent share dilution is apparent when you note that NPAT growth (compounding) has been 15.8%. By the way there was no share dilution because of the APS acquisition but there has been some ongoing dilution from DRIPs

So with a 6 year EPS growth of 9.5% maybe NPXs PEG (on historical basis) is about 1


Like you the market was a bit slow to cath on to the added APS earnings. Only part of the Akzo stuff is in this year so 2006 will be the first full year with that included.

History might be repeating but if so this is prob some months ago ... won't the market be more interested in how deep the current 'weakness' is. I fear NPX are still taking a reasonable optimistic view of the situation and there could be further bad news in respect of next year

[SCOTTY]

Lizard/Winner
Even after acquisitions and profit drops, NPX have always managed to maintain/grow the dps. ie Adj dps;
1993 - 7.5
1994 - 8.5
1995 - 9.0
1996 - 10.0
1997 - 10.5
1998 - 10.5
1999 - 10.5
2000 - 15.0
2001 - 15.0
2002 - 17.0
2003 - 20.0
2004 - 24.5
2005 - 26.5
The $50m APS acquisition in mid 2002 was responsible for most of the 2003 revenue growth.
Cheers

Updated after 2005 FY result

Cheers

[Lizard]

9.7% compound growth in dividends?

Cool. My textbook Dividend Valuation Model, says that using Snoopy's favourite ROR of 12%, the value of NPX shares is therefore V=25cps/(12%-9.7%)=$10.88!!!

(Never thought much of those textbook models though).

Cheers,

[OldRider]

ACC seem to be keeping up their interest, see NZX announcement today.

[belgarion]

ACC are worth watching ... seem to get it right more than 50:50

[winner69]

Come on guys .... you told me you were all going to nuy today to get the price up

Did make some sort of rally in the afternoon but i am surprised that it held up so well

Maybe the big insto's overweight have to do their sums yet ...was a long weekend after all

[winner69]

quote:Originally posted by belgarion

ACC are worth watching ... seem to get it right more than 50:50


Buying before the downgrade

Latest lot of buying from a high of 534 to last week

Averaging down?

Quite a bit to catch up now

[foodee]

?? low will it go? Is it time?

disc: none

[winner69]

Said a month or so i wouldn't be buying my shares back at 550 shortly after the downgrade thht came with the half year

Then said it doesn't look like I'll be buying them back at 450 either ... before the proper downgrade

Wondering if I am tempted at 350 next week

Whatever i have saved over $2 a share and that is heaps

[Sharebroker]

quote:Originally posted by Lawso

After the big drop that followed NPX's cautious announcement I posted: "Watch the bounce back on Monday."
Well, it didn't hold that initial 19c recovery but the price has been rising steadily, as I was confident it would. 568 at the moment. Methinks some panicked and sold too quickly.

PS. Now 570



Time to fire your broker or stop reading ttheir research - especially when they are dping corporate deals and placements for the company.

[KJ]

Well done W69 on your analysis and calls over the last few mths-glad I took note and got out early on.Unfortunately one profit downgrade often follows another so I will not be rushing to get back in.

[winner69]

Bit of a recovery today sort of suggests that 360 odd is about as low as it will go.

Interesting that 2 major users of resins (probably NPX customers) told the world of their woes. Wattyl major downgrade and Orica's paint division reporting lower profits ... with demmand in Australia down.

Reflects a lot of these building related companies and obviously NPX is not insulated from this.

Whether the worst is over I don't know but i would think that the NPX statement that next year should not be affected too much is a bit optimistic.

I might just wait a few days to see what happens ... might just have been hopeful bargain hunting today .. a 'bargain' just because it is 40% cheaper than a few months isn't a bargain if fundamental market drivers push the price down further.

[Sharebroker]

quote:Originally posted by winner69

Bit of a recovery today sort of suggests that 360 odd is about as low as it will go.

Interesting that 2 major users of resins (probably NPX customers) told the world of their woes. Wattyl major downgrade and Orica's paint division reporting lower profits ... with demmand in Australia down.

Reflects a lot of these building related companies and obviously NPX is not insulated from this.

Whether the worst is over I don't know but i would think that the NPX statement that next year should not be affected too much is a bit optimistic.

I might just wait a few days to see what happens ... might just have been hopeful bargain hunting today .. a 'bargain' just because it is 40% cheaper than a few months isn't a bargain if fundamental market drivers push the price down further.




Yes - the Warehouse looked cheap at $6.00, $5.00, $4.00 ....and the sp bounced on each ocassion giving false hope.

[Paper Tiger]

quote:
Bit of a recovery today sort of suggests that 360 odd is about as low as it will go.

It does?
There is always tomorrow and I would treat it with caution.

[John]

quote:Originally posted by winner69


Wondering if I am tempted at 350 next week



So W69, were you tempted @ 350????

[winner69]

John

Didn't buy my shares back at 550 ... nor 450 .. and 350 is a temptation ... but not yet

Probably won't get a chance at 250 either

After those Wattyl and Orica results this week and making a few enquiries has to how demand for the stuff NPX specialise in is holding up you can only feel that there could be more bad news on the horizon

What really is putting me off making any hasty calls on this is that NPX say the current downturn is only short term and next year should be unaffected

That level of optimism frightens me when their customers seem to have a different view.

The chart says DON'T BUY ... the industry has a gloomy outlook ... so why take a risk yet

So 350 .... maybe on the way back up

[Shareloser]

what about 300?

[John]

Won't be long now if it continues to get to $3. To think I bought at 6.2 a while back but luckily (in hindsight)sold at 5.71 (down 1K in a day on that...) Oh well, if it gets much cheaper I'll have to start thinking about it again. I think I'll be waiting for 3 before jumping again.

[Shareloser]

I'm keeping an eye on NPX to buy at 300

[Lawso]

Finally . . . NPX showing signs of solid recovery. Up 12c yesterday, 10c so far today to 375. Two positives could be the fall in oil prices and Costello's budget which could leave homeowners/buyers with more money to spend.

Too bad for those who have been waiting to get back in at $3 or thereabouts. I first bought NPX in '02 @ 320 :) and the most recent top-up was in December @ 554 :(. Phaedrus won't be surprised to learn that I'm hanging in there.

[Lawso]

Look like closing @ 380 :)

[winner69]

quote:Originally posted by Lawso

Phaedrus won't be surprised to learn that I'm hanging in there.


.. but he'll think I am stupid at buying back my shares before an uptrend was confirmed

Cost me a bit more than 350 though but keeping a close eye on developments

[Lawso]

I'm sure you won't regret it, winner, whatever the charts say.

[Phaedrus]

Don't worry about what I think lads - trend-following doesn't suit everyone. It is relatively easy to design a profitable system - keeping to your system (whatever it may be) is the hard part.

http://home.ripway.com/2004-7/148483/NPX517002.gif

[winner69]

I'm preempting (in other words taking a punt) NPX breaking through that red steep down line, the W%r and the DMI all looking healthy next week .... or else out again and making a little profit

Short term view at the moment because what Phaedrus is pointing out that is the down trend ain't been broken yet ...

[Studson]

Buyers out number sellers, heaps:1 and $4 asking price being met on reasonable volume. Looking very healthy! :D. Pleased I got in early this week. [^]

[winner69]

That $4 hard to break through this time

may have made a mistake with the timing of this esp in view of the negatives that seem to buidling up around building material stocks and even the carry ons in Euroland might be inhibiting economic growth

Hope not

[winner69]

come on guys .. an hour left to get the price up for the week

Even the NZX50 is going to end the week up after that that big fall mid week

But NPX not even keeping up with the likes of other building stocks like FBU

Negative sentiment continues around NPX prospects - when the market is looking brighter that is not good

Maybe not a good buy a week or so ago after all

[winner69]

quote:Originally posted by Lawso

I'm sure you won't regret it, winner, whatever the charts say.


Starting too mate

Didn't get over that 400 barrier this time around and has drifted down to 380 since

Still made more so far than if I had put into FBU at the same time - the other down beaten building stock

But maybe NPX has had its little revival

[ananda77]

Gonna go for this one.

Rationale:

http://img.villagephotos.com/p/2004-12/905046/NuplexIndustries.gif

[Dough Boy]

Just topped up yesterday on some more NPX when they touched 375 and now content to wait my time and clip the div in the meantime. See all you value investors at the party in the not too distant future (3 to 5 years for me) when we cash out.

Don't you just love negative sediment for the bargins it offers as it eventually always washes away.

[Dazza]

whats the divi yield, and do they have a DRIP?

[SCOTTY]

quote:Originally posted by Dazza

whats the divi yield, and do they have a DRIP?

Hi Dazza
At $3.90, the gross yield is 9.615% (25c dps with full imputation credits)[:p]. Currently no DRIP.
Cheers

[Dazza]

scotty u sure they dun have a drip?
just read from some other thread, regarding drip companys... nuplex was one of them

just want to confirm with u other NPX holders

[Sky Tower]

I was doing some research at work recently regarding DRiPs and I dont believe that NPX has a DRiP. There are about twenty companies on the NZX that do.

http://www.sharetrader.co.nz/topic.asp?TOPIC_ID=21328&whichpage=1&SearchTerms=Dividend,Reinvestment

Cut and paste that into your browser line

[SCOTTY]

Hi Dazza
They did have a drip but discontinued it a couple of years ago.
Cheers

[warthog]

quote:Originally posted by SCOTTY

Hi Dazza
They did have a drip but discontinued it a couple of years ago.
Cheers


I might be behind the times, but it seems this may still be in operation:

http://www.nuplex.co.nz/nuplex/investor/dividendreinvestment.asp

warthog

[SCOTTY]

Re. DRIP.
From the 2004 Chairman's Report;
"The Dividend Reinvestment Plan was suspended for the interim dividend and remains on hold as the Group has no need for additional share capital at present".
Cheers

[warthog]

quote:Originally posted by SCOTTY

Re. DRIP.
From the 2004 Chairman's Report;
"The Dividend Reinvestment Plan was suspended for the interim dividend and remains on hold as the Group has no need for additional share capital at present".
Cheers


Well-spotted Scotty - I didn't get that far!

[KJ]

Looking better-now well through $4 barrier.

[Binklebonk]

sure is, not wanting to pour cold water on a good recovery story, how senstive is this stock to oil price rises in light of $59/barrel?

[Dough Boy]

quote:Originally posted by Binklebonk

sure is, not wanting to pour cold water on a good recovery story, how senstive is this stock to oil price rises in light of $59/barrel?


Have now had high oil prices for sometime and the longer it stays stable the better it is for the plastics / resin industry overall to eventually pass the cost on to the consumer. It is the initial sharp rise that affects companies that consume resourses, not necessarliy a long-term higher price that all participants have to pay.

Of more direct effect on NPX's value would be a drop in NZD.

[winner69]

Doughboy - puzzled as to why there is 15 pages of drival on such a company?????

[Dough Boy]

quote:Originally posted by winner69

Doughboy - puzzled as to why there is 15 pages of drival on such a company?????


Because it produces a profit and it is growing!!

[Longtack]

Touche - heh heh.:)

[winner69]

quote:Originally posted by Dough Boy


quote:Originally posted by winner69

Doughboy - puzzled as to why there is 15 pages of drival on such a company?????


Because it produces a profit and it is growing!!


Produces a profit ... YES

Growing ... well eps down about 20% this year ... NO

And share price down 30% from its high


But then it possibly deserves some drivel because I currently have a few

And that is not drivel on the FTX thread ... all good stuff

[Dough Boy]

quote:Originally posted by winner69


quote:Originally posted by Dough Boy


quote:Originally posted by winner69

Doughboy - puzzled as to why there is 15 pages of drival on such a company?????


Because it produces a profit and it is growing!!


Produces a profit ... YES

Growing ... well eps down about 20% this year ... NO
quote:(YES if you take a longer term view than 1 year)

And share price down 30% from its high


But then it possibly deserves some drivel because I currently have a few

And that is not drivel on the FTX thread ... all good stuff

[winner69]

Back to 450 and indicators still looking strong.

Remember the fundamentals haven't changed from when I said 450 was a bit expensive (after the last round of announcements) and maybe 350 was the time to buy ..... so need to keep a real close eye on the charts to ensure I don't give back the 20% profits so far on this trade .... but then again things could get irrational again and NPX goes to 625

[SCOTTY]

Hi Winner
Personally I think they still look cheap as I am still assuming good profits next year on the increased sales. NPX has little exposure to the NZ market and in total only about 10% of sales are related to the building industry.
NPX is now an international business but paying imputed NZ$ divi's[:p]. This alone should command a premium, especially if/when the $Kiwi drops.
I thuught they were great value @ $6 and will admit to buying a few @ $6.12[:I]. Happily I purchased good quantities later @ $3.80(28/4) $3.55(12/5)and finally $3.87(9/6). I would buy more at current prices but have blown the bank.
Cheers

[Offshore]

SCOTTY ....assuming good profits next year on the increased sales....

Won't there be significantly increased goodwill amortisation to allow for following the purchase?

Disc: New in @ 4.09 & still keen to learn more.

[SCOTTY]

quote:Originally posted by Offshore

SCOTTY ....assuming good profits next year on the increased sales....

Won't there be significantly increased goodwill amortisation to allow for following the purchase?

Disc: New in @ 4.09 & still keen to learn more.

Hi Offshore
The Co announcement to the NZX dated 22/04/05 does say that there will be additional depreciation & goodwill amortization due to the Akzo Nobel purchase. It also says that "the Directors and management are confident that the Group is strategically well placed to achieve superior results in the future."
As from next year there should be a significant increase in eps all going well.
Cheers

[winner69]

quote:Originally posted by winner69

Back to 450 and indicators still looking strong.

Remember the fundamentals haven't changed from when I said 450 was a bit expensive (after the last round of announcements) and maybe 350 was the time to buy ..... so need to keep a real close eye on the charts to ensure I don't give back the 20% profits so far on this trade .... but then again things could get irrational again and NPX goes to 625


Another month on and after heading in the right direction has fallen back to that 450 mark

Bad couple of days for NPX

Most likely concerns about the rising oil prices and the impact on NPX's input prices ... and whether they can actually pass all these on.

Didn't one of their last presentation hint they were having trouble in doing this, and oil is even higher now

[winner69]

Remembered annual result Friday next week.

Maybe todays action a precursor as to what is to come?

Said about $28M for this year back in April and probably come in around the $28.5M mark ... around 37 cents / share

So at 457 about 12 times earnings which for a solid chemical company is probably fair enough

I fear that unless there is something positive said next week about all the Akzo stuff working out well we could be in for some rough times because market conditions in NZ and Aust are all that great ... and are margins under pressure?

All will be revealed next week but I am not going to lose the 20% gains made receently on this ... watch those charts carefully

[winner69]

Last week started to look ominous so took my profits.

Looked even worse today didn't it with a bit of late selling pushing the price down to 440.

Full year on Friday will be interesting and as said before probably come in about where they said they would but what they say about the future will be really interesting.

Input prices must be getting higher and some customers told them to take a jump some months when they tried to put prices up again so expect margins to be under pressure.

Wonder how the integration of Akzo going?

Roll on Friday

[winner69]

Announcement about as expected and most punters prob relieved to some extent there wasn't anything nasty coming out

Obviously difficult 2nd half and these conditions likely to continue for a while

That years over so we can look forward to the new year ... will that 10% increase in eps that Akzo was going to bring in happen this year? Will NPX carry on their merry way?

Most likely well and the market seems pretty keen on them today .... 500 soon and then 600 and then new all time highs at 625 .... and then blue sky

[Lizard]

Amazing. You can have a consistent growth history. You can increase dividends on an annual basis. You can have a history of successfully absorbing large acquisitions. You can have a forward P/E of 10 (based on consensus analyst forecast of $35m) and a current yield of 8.6%.... and still not be popular. Well, it can stay in my portfolio. :)

[rmbbrave]

Investors buy on modest Nuplex result


20.08.05


Investors liked Nuplex's annual result yesterday, pushing the resins company's share price up 11c to $4.56 on its $0.8 million rise in net profit to $29.2 million.

The modest result was despite a $279.5 million or 42 per cent leap in revenue to $937.3 million, thanks to a boost from its new Coatings Resins business in Holland.

Chairman Fred Holland said the result was in line with forecasts, "but reflects a disappointing second half arising from the softening of parts of its key Australian, Asian and European markets and a rapid rise in petrochemical raw material costs".

Nuplex is Australasia's largest producer of resins - synthetic compounds used in paints, printing inks, adhesives and fibreglass.

The company had a first half profit of $16.2 million and, in February, issued a profit warning, saying it was seeing signs of a softening in demand for coatings resins in New Zealand and Australia, which accounts for 40 per cent of sales.

Holland anticipated continuing flat business conditions in Australasia, with some recovery in Asia and market conditions in Europe and the US to continue for the mid-term.

A final dividend of 14.5c will be paid on October 14.

- Georgina Bond, NZPA

[winner69]

quote:Originally posted by Lizard

Amazing. You can have a consistent growth history. You can increase dividends on an annual basis. You can have a history of successfully absorbing large acquisitions. You can have a forward P/E of 10 (based on consensus analyst forecast of $35m) and a current yield of 8.6%.... and still not be popular. Well, it can stay in my portfolio. :)


That $35M is some way off when you consider they made $13M over the last 6 months (about the same as last year even though sales were up by $250M odd)

Their looking ahead statements hardly inspires confidence does it .... conditions flat NZ and Aust, some recovery in Aust and Europe much the same. Hardly riveting stuff to say things are going to better.

Margins seem a real problem as well ... like EBIT margins less than 5% over the last six months and recent comments from NPX don't suggest that cost increases are getting harder to recover.

Put all that together and next year could be $26M and that would be a disappointing result.

A positive view would be sales in excess of $1.3M, EBITDA of $140M with a bottom line of $65M odd.

In good times that is possible to one day the shareprice will be a lot higher (like $8-$9) than it is today but I fear that might be a year or three before the good times come again.

Remember the NPX promise of a 10% increase in eps from the akzo thing (like taking it to 50 cents plus this year) ... even next years consensus is 45 cents per share so some way delivering on promises ... and isn't that why the shareprice is struggling at the moment

But after all NPX is just an old fashioned chemicals company

[Lizard]

Always something to worry about...

It's not the first time this company has had a disappointing result since I've held it. Same thing happened after the last big acquisition. From memory, the next result made up for it. Agree shares are only as good as their next result (unless of course they are speccies - when they are only as good as their next PR job). But can't see Nuplex losing the plot - the world hasn't given up on resins and coatings yet!

Back on pg 13, Scotty posted the dividend growth - using this years actual dividend, the compound growth rate in dividends over 13 years is 10.2% p.a. With a current yield of 8.6%, it is hardly likely they can keep raising dividends at over 10% p.a. without also moving the shareprice. Therefore, over the longer term, I expect 10.2% p.a. growth in the share price and 8.6% yield to give me nearly 19% p.a. Which I'm happy with.

However, in the short term, I don't expect a big rush on these shares while sentiment is nervous. So price may well look soft for a while. Still, history suggests that taking advantage of any softness is a low risk strategy.

[SCOTTY]

quote:Originally posted by SCOTTY

Lizard/Winner
Even after acquisitions and profit drops, NPX have always managed to maintain/grow the dps. ie Adj dps;
1993 - 7.5
1994 - 8.5
1995 - 9.0
1996 - 10.0
1997 - 10.5
1998 - 10.5
1999 - 10.5
2000 - 15.0
2001 - 15.0
2002 - 17.0
2003 - 20.0
2004 - 24.5
2005 - 26.5
The $50m APS acquisition in mid 2002 was responsible for most of the 2003 revenue growth.
Cheers

Updated after 2005 FY result

Cheers

[vjp24]

There have been some pretty sharp falls in the NPX share price these last couple of days. Any ideas why????

[Lizard]

Could be concerns over resin supplies and pricing following hurricane Katrina...but I'm just guessing there.

http://www.plasticstechnology.com/us.html

[winner69]

Little to get excited about NPX at the moment

Input codtd rising and not able to pass all on, falling demand in Australia and NZ for resins and goodness knows what is going on in Europe.

Improving cyclical conditions some way off so wouldn't surprise to see the price drift down more ..... good buying sometime but not now.

[SCOTTY]

Lower SP means more shares for those taking the reinstated DRIP (like me) [:P].

Cheers and more beers.

[glennj]

A thought to ponder over is that it may be better not to take the DRIP?

The dividend is 14.5 cents per share but the discount is only 10 cents per share off the pre Record Date price.
The way the price has been behaving lately there is a fair chance that you could take the cash divi and buy more shares including brokerage come mid October than you will get thru the DRIP.

Of course I could be wrong but in this instance I'd opt for the cash.
Any other opinions on this?

[warthog]

quote:Originally posted by glennj

A thought to ponder over is that it may be better not to take the DRIP?

The dividend is 14.5 cents per share but the discount is only 10 cents per share off the pre Record Date price.
The way the price has been behaving lately there is a fair chance that you could take the cash divi and buy more shares including brokerage come mid October than you will get thru the DRIP.

Of course I could be wrong but in this instance I'd opt for the cash.
Any other opinions on this?


The price to be discounted is a weighted average of the trades on the first five of the eight trading (from memory) days before the record date.

So if you are a shareholder holding for the medium-long term, the lower the shareprice during this period the better.

[Tinker]

The previous DRIP I thought was more generous thus I was a member. Now a measly 10c off whilst I get to make no call on whether the price is reasonable so I'm out.

Just my thoughts

Cheers
Tinker

[winner69]

quote:Originally posted by Tinker

The previous DRIP I thought was more generous thus I was a member. Now a measly 10c off whilst I get to make no call on whether the price is reasonable so I'm out.

Just my thoughts

Cheers
Tinker


You guys getting more shares by the day in the DRP (and they have woken up to the fact you were getting a dud deal as well by increasing the discount)

You taking the cash or the bag glennj

[glennj]

Haven't been advised of an increased discount yet.
My intention was to take the cash & then take the chance
of doing better by buying in ex div.
IMO the proposed DRIP wasn't particularly attractive,

[glennj]

Letter turned up today (live in the sticks)
Yes they've woken up. The dud deal that they were offering can't have had many takers & they would have been shelling out more cash than they wanted to hence the change. (I find it hard to believe that the original DRIP arrangements were not intentional)
Anyway there has been a change & the new discount is potentially worth taking. Will opt for partial participation.

[winner69]

One year on since the Akzo Nobel acquisition announced and still the share price languishes.

The recent (rather large) decline is more than bad overall market sentiment I fear

Makes you wonder if they are holding of until next Fridays AGM before telling the world what is going on .... a falling shareprice which is now lower than it was 2 years ago won't be boosting the sentiment of shareholders.

They'll be looking for good news ... will they get it?

[rmbbrave]

quote:Originally posted by winner69

One year on since the Akzo Nobel acquisition announced and still the share price languishes.

The recent (rather large) decline is more than bad overall market sentiment I fear

Makes you wonder if they are holding of until next Fridays AGM before telling the world what is going on .... a falling shareprice which is now lower than it was 2 years ago won't be boosting the sentiment of shareholders.

They'll be looking for good news ... will they get it?


How's this for good news?

Nuplex takes on the world

28.10.05 3.40pm


Nuplex is on track to become a "genuine global supplier" of coating resin, shareholders were told at today's annual meeting in Auckland.

Chairman Fred Holland said the $208 million purchas e of Akzo Noble's Coatings Resin during the year meant Nuplex was no longer over-reliant on the Australasian market.

As well as operations in Europe and the Americas, the Coatings Resin acquisition boosted Nuplex's access to markets in Malaysia, Indonesia, Thailand and China.
"The acquisition brought world-class research and development into the group, removing our reliance on being able to license the technology of others," Mr Holland said.

Prices of raw materials for the resin business remained at higher than normal levels, but margins and demand for products were recovering.

As a result, Nuplex expects earnings per share (eps) to recover in the current financial year. In the June year the company's eps fell to 40.8c from 45.8c the previous year. Mr Holland said today he was confident eps would reach 48c this year.

Managing director John Hirst told shareholders the resins business, which represents 77 per cent of Nuplex's total sales, was key to the company's ongoing success.

"After a slow start to the new financial year, our international resins business has gathered momentum and is operating close to expectations," he said.

Mr Hirst said the international resins market continued to undergo significant change through mergers and the spinning off of resin divisions by global paint manufacturers.

"These will represent opportunities for us to build out international position from what is already a significant base."

Shares in Nuplex were up 13c or 3 per cent at $4.15 in morning trade, having ranged between $3.39 and $6.20 during the past 12 months.

- NZPA

[winner69]

Reading between the lines of the Chairmans speech at the AGM Nuplex will one day soon become an Aussie company .... domiciled over there etc (just like NUF etc)

Also as I have mentioned a few times before dividends to NZers will not have 100% imputation credits attached to them

At least everybody seemed pretty perky and satisfied about life and the way things were going .... boss man happy with forecast of 48 cents/share (with no amortisation charge this year which would have been 3 cents/share odd ).

On that basis you would expect the share price to be over 500 soon

[SCOTTY]

The NZX announced today that Australian Fund Manager, Paradice Cooper Investors now holds just over 5% of NPX.
I have just finished reading a most interesting book called "Masters of the Market" - "Secrets of Australia's Leading Sharemarket Investors" by Anthony Hughes, Geoff Wilson & Matthew Kidman. The publisher is John Wiley & Sons Australia Ltd. 13 Investors are covered.
A chapter titled "Finding the Little Gems" is devoted to David Paradice the founder of Paradice Cooper Investors and his investing style. He specialises in small to medium sized unfashionable under-researched companies and has consistantly produced spectacular results.

[winner69]

Scotty ... Paradice Cooper have done very well in the past and this is a vote of confidence in NPX

Where NPX are today is similar to where Nufarm were a few years ago.

After outgrowing NZ and shifting operations to Aust and undertaking global expansion the NUF shareprice has more than trebled ..... and seen in completely different light by investors now they are a Aust company with global connections

Maybe it is just that NZers cant see beyond NZ .... meaning the sooner NPX do pack a sad and become an Australian comnpany the better ... than they might start getting rewarded for what they really are

[Lawso]

I'm afraid you're right, winner. This loser sold out of NUF a few months after the shift to Oz. The price seemed to be going nowhere and I lost patience. Big mistake.

With NPX I will have to decide whether the loss of imputation credits later next year will be offset by the same kind of capital growth NUF has achieved.[??]

[SCOTTY]

Hi there Winner & Lawso
I do like imputation credits but what I like more is the creation of wealth & divi increases :D. With successfull international expansion this is what we can expect.
We are not loosing imputation credits totally as I think that NZ will probably still contribute about 20% of tax paid profit (on 13% of sales).
The more Aussie's own of NPX (they get full franking), the more NZ imputation credits for distribution for us here in NZ. Great [8D].
Cheers and more beers.

[Paper Tiger]

Interestingly (to me at least :)) I choose NPX over FBU as one of my picks for the stock picking contest this year. However when I came to put my money where my pick was I bought FBU. This was fortunate.
However then was then and now is, well.. now. And at the present time I think that NPX represents the better buy. With it's higher degree of exposure to overseas (not Oz/Nz) I reckon it has better growth prospects over the next two/three years.
The reduction of imputation credits is unfortunate and one can never foresee what the share price will actually do but...
the ONLY thing stopping this share being added to the portfolio is that it is currently in a downtrend. When that changes then this Tiger will be buying*

*maybe, well things change you know? But I have my eyes on this one and it looks good at the moment.

[Paper Tiger]

drat! :(


quote:
NPX
30/11/2005
ASSET

REL: 1621 HRS Nuplex Industries Limited

ASSET: NPX: Nuplex buys Polychem/Multichem

Nuplex Industries Limited (Nuplex) has signed an unconditional agreement to
acquire all the shares of PML Holdings Limited (PML), a group of chemical raw
material suppliers operating in Australia and New Zealand.

PML operates under the name of Polychem Marketing in New Zealand and
Multichem in Australia.

Nuplex has agreed to pay $44 million for the shares to be settled in cash on
30 November 2005 with an additional amount conditional upon achieving certain
earnings and growth targets over the next two and a half years. The current
owners and directors of PML will remain with the business.

Annual sales are close to $100 million and the acquisition will contribute
immediately to earnings per share.

Graeme Storey
Company Secretary
End CA:00124551 For:NPX Type:ASSET Time:2005-11-30:16:21:40

[SCOTTY]

NPX today announced the purchase of PML Holdings Ltd which trades as Polychem Marketing in NZ and Multichem in Australia.
Anyone know this business?

[OldRider]

Perhaps a look here (http://www.polychem.co.nz/) will help.

[SCOTTY]

quote:Originally posted by OldRider

Perhaps a look here (http://www.polychem.co.nz/) will help.

Thanks OldRider. Looks good. [:p].
Cheers and more beers.

[Lizard]

I see Citigroup has put a buy on them with target of $A5.20, (labelled high risk). Would be good if they could get a little more liquidity on the ASX

[Lawso]

quote:Perhaps a look here will help
Gee thanks, OR. All I get on my screen is

PRELOADING
00 seconds remaining
[?] [?]

[Halebop]

The link works for me Lawso.

[OldRider]

Lawso: I don't know enough about the internet to understand what is happening for you, link works OK for me and for SCOTTY apparently.

Just in case you haven't figured the URL, or others might have the same problem it's
{www.polychem.co.nz}

[Lizard]

And the sale of the environmental services business seems like a good deal for Nuplex too. That should de-risk the balance sheet again after yesterdays announcement.

Buy one business at 44% of turnover (plus earn-outs) and sell the other for 187% of turnover. Margins aside, that gives a favourable impression....

[Paper Tiger]

I decided to buy in yesterday.
However ASB Online Trading was down, and they did not answer the phone when I called (I guess they were getting a lot of calls). So I am still NPX-less and have a jar of 5c cent coins yet to be spent.

[Phaedrus]

http://home.ripway.com/2003-11/39768/NPX122001.gif

[KJ]

I bought a few yesterday-hope I have not jumped the gun!

[Lawso]

quote:Just in case you haven't figured the URL, or others might have the same problem it's
{www.polychem.co.nz}
Nope, not even "polychem" works for me, tho' everything else is working normally. Oh well, thanks anyway . . .

Phaedrus's chart graphically demonstrates the extent of NPX's fall - a huge over-reaction IMO. NPX has to be good buying for those with a medium/longterm perspective.

[SCOTTY]

"What a difference a day makes - just 24 hours.........." :D.

[Lizard]

Citigroup re-rated them up again today. Though for some reason, they still think they're high risk.... good old Aussie "not invented here" syndrome perhaps?

[rmbbrave]

Continuous disclosure

03.12.05
By Georgina Bond


Nuplex's buying and selling of businesses in rapid succession this week had a positive effect on its share price, pushing it up 20c to $4.45 yesterday.

The company - Australasia's largest producer of resins for paints, inks and adhesives - carried out two transactions within 24 hours.

It bought the chemicals and plastic raw material business of PML Holdings for $44 million, then sold its environmental services business to ASX-listed Transpacific Group Industries for $56 million.

Managing director John Hirst said the Australasian industrial waste operations, as well as the medical waste concern in New Zealand, were not core to future business.

The deals were not expected to impact on full-year earnings as they balanced each other out.

He said the change would see the company consolidate its operations around a tighter skill set, which would lead to greater efficiencies, growth of expertise and the delivery of better services and products.

The company's shares rose 56c over the week.

Not excatly true. SP started at 4.12 on Monday, closed at 4.45 on Friday

The company recorded an $800,000 rise in net profit to $29.2 million for the latest year, a modest result given a $279.5 million or 42 per cent leap in revenue to $937.3 million, thanks to a boost provided by its Coatings Resins business in Holland.

This year, the company has faced a softening in parts of its key Australian, Asian and European markets and a rapid rise in petrochemical raw material costs.

In its last outlook, in August, the company was anticipating continuing flat business conditions in Australasia, with some recovery in Asia.

Market conditions in Europe and the United States were expected to hold steady.

Nuplex shares have traded as high as $6.20 in February this year and as low as $3.39 in May.

It has also been announced that the company's shareholders will have to pay tax on their dividends next year.

[SCOTTY]

Hi rmbbrave
I think that the last sentence of this Georgina Bond article is a bit misleading as 20% of future profit is still to come from NZ so there will still be some imputation credits for NZ investors.
The more off-shore NPX ownership, the more NZ imputation credits available for Kiwi investors.
The future share price will probably be set by Aussie investors who get full franking and will be looking at Aussie type PE's which will be good for the NPX share price over time.
Cheers

[Dubdee]

The fact is that NPX is short of taxable income in NZ and long of taxable income in Australia. They are part of the trans tasman imputation regime. Every dividend will be imputed and franked to the same extent. This means with more NZ than Australian shareholders there will be a shortfall on NZ imputation; whereas NZers will also get Ozzie franking credits which they cant use as dont pay Oz income tax. The result is a waste of oz franking credits. Thats why most trans tasman companies don't elect to join the new tax regime.

[Lizard]

I think this result looks good. Normalising result and based on forecast of $100m EBITDA for FY, this equates to $38.5m NPAT for FY (includes $1m reduction in interest for second half). Including current abnormals, NPAT of approx $63m.

My valuation for NPX is $5.96. At current offer price of $5, my estimate of forward P/E is 10 and yield of 5.7% excluding imputation credits. (This half year looks to be pretty much fully imputed anyway).

[Footsie]

Looks cheap, why does my broker have it on a hold then

[warthog]

quote:Originally posted by Footsie

Looks cheap, why does my broker have it on a hold then


Good question - what do they say about why they have it on a old?

What's your broker's advice record like? ;)

[Lawso]

quote: NPX - Good Result
blimmin' great result IYAM. Pity about the loss of imp credits after the next payout but any further decline in NZ$ will be good for us.
So the s p falls 3c.[V]

[KJ]

I guess result roughly in line with expectations-However last year
First Half $16.2m-this yr $15.7m excluding sale of Enviromental Services.Maybe the SP will fall back?

[warthog]

quote:Originally posted by KJ

I guess result roughly in line with expectations-However last year
First Half $16.2m-this yr $15.7m excluding sale of Enviromental Services.Maybe the SP will fall back?


Maybe it will.

Then again it could rise.

Or bumble along at about the same level.

I think that pretty much covers it ;)

[winner69]

Talking to the loyal converted but how can it be a very good result when revenues are up $259M and 'normalised' PROFIT was DOWN

From the numbers -

*** Nuplex business as it was a year ago showing no growth .... flat sales and EBITDA

*** Coatings Resins (the acquired business)accounted for most of the revenue increase with sales of $257M

*** Coatings Resins NOT contributing to the bottom line ... made a small loss.

So similar market conditions to prevail for the second half year as well .... full year EBITDA of $100M they say .... gives EPS of about 42/43 cents

So at 500 NPX is still at 12 times earnings which seems rather a lot for something at the top (or is it the bottom) of the cycle

Don't hold NPX at the moment ... and given the current situation not tempted to have another dabble unless the chart says so (watch closely because sentiment rules)

Is this a case of waiting for the acquisition to be bedded down? How long will it take for the CR part to start generating profits ... I am still waiting for the much touted 10% increase in EPS (after issuing new shares) they said was on the cards.

Good old solid chemicals company ...

[SCOTTY]

Hi Winner

Your comments are I think good and interesting.

Personally, I think that the FY EBITDA estimate of close to $100 million (at say 10% of sales) is the key compared to: $81.5mil (9%of sales) - 2005 & $74.2 mil (11% of sales) - 2004. It could even be better if petrochemical prices and the $NZ weaken.

Disc. NPX is my only NZX holding currently.

Cheers

[KJ]

Scotty-don't you think that sales for current yr will be around
$1200m-hence EBITDA close to 8%.

[SCOTTY]

quote:Originally posted by KJ

Scotty-don't you think that sales for current yr will be around
$1200m-hence EBITDA close to 8%.


Hi KJ

You could be right for this year KJ. However, the management will certainly be looking at getting back to their historical averages of 11-12% and this is what will drive earnings over time. Going back to 1999 the EBITDA as a % of sales is:

1999 - 12.3%
2000 - 13.8
2001 - 11.7
2002 - 12.6
2003 - 10.3
2004 - 11.3
2005 - 8.8

The EBITDA at say 11% on sales of say $1,200m would have to be quite exciting [8D] wouldn't you say? Add on sales growth, a PE re-rating as the Aussies enjoy the full franking benefits and then tell me what the business is really worth [:p].

Cheers

[KJ]

Agree Scotty-NPX is a very good coy and will recover in the next
year or two.
I am out at the moment but will look to get back in at some point.

[BRICKS]

quote:Originally posted by SCOTTY

Your comments are I think good and interesting.

Disc. NPX is my only NZX holding currently.

Cheers


SCOTTY your have dumped SMITH CITY why.. [8D]

[SCOTTY]

quote:Originally posted by BRICKS


quote:Originally posted by SCOTTY

Your comments are I think good and interesting.

Disc. NPX is my only NZX holding currently.

Cheers


SCOTTY your have dumped SMITH CITY why.. [8D]


Hi Bricks

I did very well out of SCY and believe it is a good business.

I think NPX will outperform SCY over the next few years - retailing is very tough and competative now and will suffer with the higher interest/mortgage rates. I was also keen to get funds off shore while the $NZ was so high. With 85% of its business off shore now, topping up on NPX seems like an easy way of doing so. I have had a holding in NPX for a few years and trust the management.

Having said that, I think that Smiths City is an excellent, well run company (and probably well undervalued) and I may well buy back in at some stage.

Cheers

[Dough Boy]

quote:Originally posted by winner69

Talking to the loyal converted but how can it be a very good result when revenues are up $259M and 'normalised' PROFIT was DOWN

From the numbers -

*** Nuplex business as it was a year ago showing no growth .... flat sales and EBITDA

*** Coatings Resins (the acquired business)accounted for most of the revenue increase with sales of $257M

*** Coatings Resins NOT contributing to the bottom line ... made a small loss.

So similar market conditions to prevail for the second half year as well .... full year EBITDA of $100M they say .... gives EPS of about 42/43 cents

So at 500 NPX is still at 12 times earnings which seems rather a lot for something at the top (or is it the bottom) of the cycle

Don't hold NPX at the moment ... and given the current situation not tempted to have another dabble unless the chart says so (watch closely because sentiment rules)

Is this a case of waiting for the acquisition to be bedded down? How long will it take for the CR part to start generating profits ... I am still waiting for the much touted 10% increase in EPS (after issuing new shares) they said was on the cards.

Good old solid chemicals company ...



Actually your comment about the sales being up but the margins still being under pressure actually gives me comfort in NPX. Eventually NPX will again raise it's margins when the industry stabilizes in terms of costs and pricing in the meantime NPX has been growing it sales whilst pruning it non-performing assets.

Taking a longer-term view with a normalized profit margin and further conservative growth in sales makes the current SP very cheap.

Increasing sales are good so long as the profit margin is substainable. However a growing profit margin is often a short-term positive but is often likely to be a long-term negative, eventually.

[SCOTTY]

On Fridays close @ $5.45, NPX capitalizes @ $423mil. Trade Me sells for $700mil. Hard to believe that a substancial business like NPX is worth $277 less than Trade Me [:I].

Great going Sam.

[SCOTTY]

Another good rise to $6.20. Go ex 14c divi at todays close.

Looking very strong.

Cheers

[SCOTTY]

quote:Originally posted by SCOTTY

Another good rise to $6.20. Go ex 14c divi at todays close.

Looking very strong.

Cheers


Sorry - $6.24 [8D].

[warthog]

quote:Originally posted by SCOTTY


quote:Originally posted by SCOTTY

Another good rise to $6.20. Go ex 14c divi at todays close.

Looking very strong.

Cheers


Sorry - $6.24 [8D].


Anybody have an idea why there is so much interest in NPX of late, apart from the forex situation?

disc: NPX

[SCOTTY]

Hi Warthog

NPX went ex a 14c fully imputated divi on Friday.

In theory on Monday they should drop the 14c to $6.12 (14c off Fridays close of $6.26). With a gross divi of 42.75 for the rolling 12 months , this is a divi yield of 6.98% (@ $6.12) still a low price for an International share which has good growth prospects and is still to benefit from our lower exchange rate.

In my opinion NPX is getting its long overdue re-rating [8D].

Cheers

[warthog]

quote:Originally posted by SCOTTY

Hi Warthog

NPX went ex a 14c fully imputated divi on Friday.

In theory on Monday they should drop the 14c to $6.12 (14c off Fridays close of $6.26). With a gross divi of 42.75 for the rolling 12 months , this is a divi yield of 6.98% (@ $6.12) still a low price for an International share which has good growth prospects and is still to benefit from our lower exchange rate.

In my opinion NPX is getting its long overdue re-rating [8D].


Thanks Scotty for the perspectives ... I agree about the re-rating, but unsure why investors would stock up just before an equity goes xd - maybe tax reasons.

[Lawso]

The market gives NPX another big tick today. Last week it put on 42c. Today it trades ex a 14c div and loses only 4c [^]

[Lawso]

Apologies for all these trivial posts. I'm carried away with my new ADVANCED status and now wannabe a GURU. But I'm really a [:o)]

[Lizard]

Hey Lawso, I'm really enjoying watching you making heaps on NPX, WAM, PFI and your other sound holdings. Well done (and congrats on the new, advanced status)!

[SCOTTY]

This is very exciting:

Yesterday, 2,003,853 NPX shares traded for $13,180,166. Mostly @ $6.60.

There are still 65,676 shares wanted @ $6.60 with sellers very thin on the ground. (10K for sale @ $6.62 & 29K @ $6,65).

Cheers and lots of beers [8D].

[rmbbrave]

$20m revamp for Nuplex

Tuesday July 4, 2006
By Georgina Bond


Nuplex will spend $20 million restructuring its overseas businesses to improve efficiency and make more environmentally friendly resins.

The changes will be made in the Netherlands, Australia and Britain, and are prompted by new technology and trends towards environmentally friendly resins - synthetic mixtures used in paints, printing inks, adhesives and fibreglass.

Managing director John Hirst said yesterday that the company had to prepare for this trend, particularly in Europe.

"We expect the market for conventional solvent-based coating resins will shrink a little and the new market will be in more environmentally acceptable material such as water-based coatings."

The restructuring costs would be more than offset by the $24.4 million made from the sale of Nuplex's environmental services group last year.

This would give a significant increase in working capital and help position the company for growth, Nuplex said.

The trend towards environmentally friendly resins required a new direction for its Coatings Resins company in Bergen op Zoom, Holland.

Staff would be lost in areas associated with the old technology, but Hirst would not say while discussions were being held with unions how many of the more than 750 employees would be affected.

"But overall, there will be a reasonably significant reduction in head count on that site, as there needs to be to face the requirements of the future market in Europe," he said.

Liquid resins operations at Nuplex's loss-making British plant in Silvertown would be closed and transferred to Holland where there was more capacity.

This would result in more job losses. But other UK operations, such as powder resin production would remain.

In Australia, a specialty products group in Seven Hills, supplying the food and beverage industries, would be moved to other Nuplex facilities, sold or closed during the next few months.

The company has forecast a full-year trading profit of nearly $100 million, compared with last year's $81.5 million profit.

Shares in Nuplex closed yesterday down 4c at $6.30. They have traded at between $3.93 and $6.70 in the past year.

Nuplex started in Auckland in 1956 as Floor Tiles and Parquet, and is now Australasia's largest producer of resins.

Buying Coatings Resins from chemicals giant Akzo Nobel opened to much larger markets beyond Australasia.

Plans to restructure and reduce staff in Holland and raise profit margins had been previously proposed, although details of the costs and savings had not been given.

Core resins operations account for about 80 per cent of Nuplex's business.

Other parts of the business include specialty products such as dyes, chemicals, rubber and plastic goods, and building products such as resin floorings.

Plans

* Bergen op Zoom, Holland: Job cuts, new management structure and reallocation of resources to meet new markets.

* Silvertown, UK: Job losses as liquid coating resins business moves to Holland. Powder resin production will stay, and additional investment is planned.

* Seven Hills, Australia: Specialty products group will be moved to other Nuplex sites, sold or closed in the next few months.

[Lizard]

I took yesterdays announcement to be somewhat ominous - the kind of thing that can be a prelude to terms like "difficult trading conditions" in the financial results...

But trading behaviour seems interesting in recent weeks as buyer(s) keep turning up at $6:30, no matter what the volume of sells.

[Lawso]

NPX closes today @ 640.

Phaedrus: Is this a significant breakout above the 630 ceiling you noted in a recent chart (which I now can't locate)?

[Phaedrus]

It was on the 'NPX Chart' thread Lawso. I will post an update there for you because that thread also shows earlier NPX charts. A series of posted charts like that keeps it all together and makes it easy for people to see that no "hindsight" was used in their preparation.

[winner69]

Revenues up 40% but operating profit only up 15% and with all the new shares issued eps up 6% ..... WHERES THAT 10% INCREASE IN EPS THE AKZO THING WAS GOING TO DELIVER?

Ebitda margins about 8% still pretty thin and the commentary in the preso not too bright (reading between the lines) ... might have to listen in at 2.30 to hear what they say ... hope some tough questions are asked

Normalised eps at 49 cents ... so market got it about right at the mo with shareprice $6.30

suppose lawso, scotty et all think it is a pretty good result .... views

I can't see much excitment in the shareprice for a while but will keep on the watchlist

[wack]

ANNOUNCEMENT


FLLYR: NPX: Results Announcement to the Market 09:36am
NPX
25/08/2006
FLLYR

REL: 0936 HRS Nuplex Industries Limited

FLLYR: NPX: Results Announcement to the Market

Nuplex Industries Limited
Results announcement to the market

Reporting period: 12 months to 30 June 2006
Previous reporting period: 12 months to 30 June 2005

Amount (000s) % change
Revenue from ordinary activities $1,300,923 up 40.1%
Profit from ordinary activities after tax attributable to security holder
$38,014 up 14.6%
Net profit attributable to security holders$61,973 up 87.3%

Final dividend
Amount per security Imputed amount per security
19.5 cents per share 4.0 cents per share

Record date: 6 October, 2006
Dividend payment date: 20 October, 2006

Comments
Unusual (gains)/losses after tax for the current year comprise:

NZD '000
Change in valuation of employee provisions 22,763
Restructuring provisions (21,619)
Gain on sale of environmental businesses 24,722
Goodwill impairment (1,116)
Others (1,855)
Exchange gains 3,657

Total unusual gains/(losses) after tax $26,552

CHAIRMAN'S STATEMENT 2006

The directors of Nuplex Industries Ltd advise that the operating profit for
the year ended 30 June 2006 is $38 million 15% ahead of last year.

Reported profit is $62 million which includes an unusual profit of $26.5m. Of
this, $24.7m was realised from the sale of the Environmental Services group
in November 2005. It also includes the reversal of earlier provisions taken
following the acquisition of the resins business from Akzo Nobel in January
2005, and new provisions associated with planned restructuring of that
business. Costs associated with the portfolio realignment of Asia Pacific
Specialities acquired in July 2002 are also included. The restructure of
these businesses was announced in June 2006 and will be progressively
implemented during the 2006/07 year.

Sales increased by 40% to $1,301m ($929m) while underlying earnings at the
EBITDA level increased by 27% to $103m ($82m). Growth principally came from a
full year's contribution from the new resins business. The disposal of the
Environmental Services business and acquisition of the Polychem/Multichem
businesses increased revenue but were neutral to EBITDA contribution.

The result was achieved despite a flat performance from traditional
Australian and New Zealand markets. Asia provided high growth with China
delivering its maiden profit and both the Americas and Europe benefited from
stronger demand and market success, endorsing the strategy of regional
diversification. Certain businesses remain underperforming with unrealised
losses leading to an abnormally high tax rate. It is anticipated that there
will be future tax benefits from current turnaround programmes with these
operations.

Escalating crude oil prices and capacity shortages in refining and
petrochemical manufacturing continued to drive up raw material costs
throughout the year and increased investment in working capital. These costs
were generally recovered but some time lag in a competitive environment
frustrated efforts to fully return margins to historical levels. High utility
and transportation costs also combined to make it a testing environment for
the global resins business which represents 83% of group profit.

With the acquisition of Polychem and Multichem, the Australasian based
speciality products business now represents 13% of continuing operations and
is well positioned for future growth. Construction Products, which has its
major business in New Zealand represents the balance of group profit.

DIVIDEND

The directors have declared a final dividend of 19.5 cents per share (cps)
with an imputation credit of 4.0 cps. This brings the total gross dividend
paid for the year to 44

[Lawso]

quote:suppose lawso, scotty et al think it is a pretty good result
Not too bad IMO, considering -
1) "a flat performance from traditional Australia and NZ markets" and
2) ever-rising raw material costs.

FH notes that "Asia provided high growth" and "should continue to grow".
China delivered a maiden profit and there was stronger demand and market success in the Americas and Europe. A pretty good effort in all the circs.
"Steady earnings growth" is forecast for '06-'07.
Think what a weak story it would have been locally if they had not pursued an active programme of international expansion through acquisition and growth.

[Lawso]

The market likes it too. Price has gone from 630 on Thursday to 651 today - I make that +3.3%. P/E is still under 10 and the yield is fine. Still good buying IMO.

[Lizard]

quote:Originally posted by Lawso

The market likes it too. Price has gone from 630 on Thursday to 651 today - I make that +3.3%. P/E is still under 10 and the yield is fine. Still good buying IMO.


But normalised P/E is a more reasonable 13.4 at $6.51 (based on operating profit of $38m). Still a good business, and yes, the market liked the result. The growing dividend stream is nice.

[winner69]

quote:Originally posted by Lawso

The market likes it too. Price has gone from 630 on Thursday to 651 today - I make that +3.3%. P/E is still under 10 and the yield is fine. Still good buying IMO.


The market having second thoughts. Price has gone from 651 the other day to 629 today - I make that -3.4%. P/E just got smaller and the yield is better. Even better buying IMO ... I can hear Lawso saying

[rmbbrave]

Resin man sticking to his principles

Saturday October 14, 2006
By Owen Hembry


In an Auckland suburb, down a street of industrial units much like any other, John Hirst sits in a tidy, functional office. It's a modest setting for the man running New Zealand's latest billion-dollar business - resins manufacturer Nuplex Industries.

Hirst's office at the firm's Penrose factory has a decent desk, a small meeting table, a splash of green from a pot plant and a painting of a pohutukawa to gaze at on rainy Auckland days - everything necessary, nothing gaudy.

You could be forgiven for expecting more for the brains behind a global business with sales for the last financial year of $1.3 billion - more than some better-known big hitters such as Fisher & Paykel Appliances.

Hirst, however, doesn't waste money on "flossing things up".

"There's no money made by investment in offices," he says.

Money first gets spent on upgrading manufacturing technology, laboratory equipment, improving efficiency and education.

One company - later acquired by Nuplex - which Hirst prefers not to name, spent millions on flash offices.

The result was a pecking order based on what sort of desk an employee had and the colour of the leather adorning their office chairs.

"And yet they spent nothing on the factory with the result that we beat the hell out of them, even though we were smaller than they were."

The resins that have made Nuplex a top-10 global company in its field are all around us - in curtains, newspaper inks, paints, underground pipes, surf boards and in tissues, to stop them falling to bits after use.

The company's composite resins can even be used in the manufacture of bridges. You could say they've been strong enough for Nuplex to bridge the world.

It's been a busy eight years since the acquisition of Australian Chemical Holdings in 1998, which tripled Nuplex's turnover to about $300 million.

That purchase gave the company a significant position in Australia and was followed by rapid growth and more acquisitions. But by 2005 the market had matured, restricting further expansion.

A side effect of consolidation in Australasia was the concentration of research and development within Nuplex and an accompanying risk of technological stagnation.

Hirst's answer was to buy the Netherlands-based Coating Resins business from international chemical company Akzo Nobel in 2005 for about €110 million ($210 million).

Coating Resins gave Nuplex access to new ideas and research departments, key European and US markets and expansion across Asia.

The move boosted revenue by 85 per cent to more than $1.3 billion.

"I chased it and chased it and fought a few other people off and we got there in the end," he says.

It took Hirst 18 months to land his prize catch and the billion-dollar tag that came with it was no accident.

"We did have market capitalisation targets and turnover targets and certainly a billion dollars just seemed so far off at the time when we established it [as a target]."

Hirst is only the third person to be managing director of Nuplex since Bill Campbell formed the company, then called Floor Tiles & Parquet, in 1952.

The manufacturing of resins began in about 1960 to supply the flooring business, which was having difficulty importing materials.

"So eventually the tail wagged the dog," Hirst says.

Nuplex is dual-listed on the NZX and ASX but is still an Auckland-based Kiwi manufacturer, with 88 per cent of shareholders being New Zealanders.

But there are two factors that could see it move overseas: If it was not possible to raise sufficient capital in the home market; or if listing elsewhere achieved a higher earnings multiple, giving investors better value.

"In the first instance we really haven't had any difficulty raising equity and in the second instance I'm unconvinced that moving the registry elsewhere would increase the multiple," Hirst says.

Fundamental to ongoing success is continuing the philosophy of previous managing direct

[Mothman]

I am interested in purchasing shares in this company and have done a little bit of research, these are my findings.

Things I like:
* Dividends growing year on year
* Globally diversified company
* Good Organic Growth
* Sound Management

Things I don't like:
* Net Debt/Net Debt + Equity = approx 47% (quite high in my opinion)
* 20% Decrease in cashflow from operations (2005 to 2006)
This could be explained by the recent aquisitions and quite high debt loading

Reasons to buy the share now:
* Company will benefit from falling NZD
* Oil price drop should help raw materials costs
* M&A activity here and Australia could provide a lift

The share register is quite fragmented and NPX could find itself the subject of a takeover offer. With all the debt it has already I don't think the private equity players would be interested, but possibly a Fletcher Building or Aussie building company could be.

Your thoughts on the above would be much appreciated...

[Lizard]

Weak result from NPX this time, but perhaps forgivable due to exchange rates? Highlight was the 11.6% increase in revenue - a good result given impact of higher exchange rates.

EBITDA just made it into their forecast range at $104m (last update said it might come in under the $103m bottom of the forecast range). Taken before one-offs, NPAT was 6% ahead on prior year at $40.3m. Puts them on an underlying P/E of 13 at current share price of $6.60.

Cash flow from operations was below the level required to cover dividend payments. Weak cashflow was said to be partly due to an increase in working capital at year end. Somewhat positive when its caused by growth, but in this case, a big reduction in payables by the look of it?

Dividend was up at 36cps for the year, giving yield of 5.5%. Sends a positive signal, but is an increase wiser than paying down debt?

Outlook statement was buoyant, with significant growth expected. Seems there will be elimination of $8m of losses. Counting on flat conditions in US and Australasia, but continued growth in Europe and Asia.

If their outlook is confirmed in results, then NPX looks okay, as 20%+ increase in NPAT is likely off a relatively low P/E. Unless a "flat" USA and Australasia becomes "slow".

[Deev8]

If their outlook is confirmed in results, then NPX looks okay, as 20%+ increase in NPAT is likely off a relatively low P/E. Unless a "flat" USA and Australasia becomes "slow".I agree that the company's prospects look reasonably good.

However I was slightly concerned by the statement that "EBITDA was negatively impacted by two large bad debts". So far I haven't found any further details about that.

[winner69]

I agree that the company's prospects look reasonably good.

However I was slightly concerned by the statement that "EBITDA was negatively impacted by two large bad debts". So far I haven't found any further details about that.


They had mentioned that in earlier announcements

Some $2M out of Europe .... and $0.8M out of Australasia

In the back of my mind I have a feeling they got caught up with Feltex somehow .... might be wrong though

[winner69]

Weak result from NPX this time, but perhaps forgivable due to exchange rates?

Lizard, Nuplex used the words "Currency - fundamentally neutral" in their presentation

"Positioned for growth" they proudly proclaim but in the context of a solid old fashioned chemical manufacturing outfit like Nuplex growth means about 5% with 10% a good year.

Nothing wrong with this - Nuplex will always trade on a PE of 12-13 unless market sentiment really turns ..... so a long term investment in Nuplex will no doubt continue to give a TSR over time of about 10% pa .... as it has for the last 10 years.

Maybe a few more acquistions needed .... but that generally needs a capital raising ..... still waiting for the promised 10% plus increase in EPS that the Akzo acquistion was going to bring in year 1

[Lizard]

Yes, I can't get excited about NPX at these levels - every now and then they have stood out as a value opportunity, but not particularly here.

A family member has some capital notes rolling over at 9.3%. Was trying to make up my mind if they would be better off electing for shares.

[winner69]

Yes, I can't get excited about NPX at these levels - every now and then they have stood out as a value opportunity, but not particularly here.

A family member has some capital notes rolling over at 9.3%. Was trying to make up my mind if they would be better off electing for shares.

I have always been amazed why people take up these capital notes in large solid companies like NPX and FBU

Generally the dividend yield is not that differnt (in some cases higher) than the capital notes and all one seems to be doing is depriving oneselve of the cpaital gains that generally accrue over the long term.

Risk/security they say ..... but at the end of the day while the Capital Notes would be ahead of the shares in the worst case the capital notes are pretty well down in the pecking order anyway.

One nigger in the woodpile with NPX is that only a small part of the dividend now has imputation credits (last year only 6 cents out of 36 cents I think) ..... but still a gross yield over 6% -

A joke at work still buys me the odd beer to say thanks for talking him into FBU shares at $4 odd instead of taking up some capital notes.

Raises the question though ..... do people invest in an company (ie then choose how) or do they invest in yield shown on a piece of paper. I'd suggest that it is a yield on a piece of paper people are after .... never mind .... counsel well anyway Lizard

[Lizard]

Good reasons in this case. The entity holding the notes has distinct beneficiaries for income and capital gain. In addition, the notes were issued in 2002 - going from memory, that wasn't a great year for sharemarkets generally and yields on bank deposits were below 6% - probably heading below 5%.

Lots of older people requiring income have memories of their own elderly parents losing the lot on shares 20 years ago. As you point out, the notes aren't usually much safer - but the maths is a bit more straightforward.

[Te Whetu]

Been a nice couple of months for NPX shareholders.

With the USD weakness the cost of raw materials are down, however overall other exchange rates (in particular AUD) have showed good strength compared with the NZD which has meant higher revenues.

Sounds like they're finishing up with the current restructuring, which hopefully means some of their past acquisitions can start showing a positive impact.

One downer is the price of raw materials in USD is high, still they keep saying they're passing most of the costs on... Hope they're right.

[Deev8]

With the USD weakness the cost of raw materials are down ... the price of raw materials in USD is highThe message on raw materials costs got slightly confused - high or low?

[Te Whetu]

I sorry that you didn't understand, the raw material costs are still high in USD but the weakness in the USD means overall lower raw material costs.

The downer is the USD cost of raw materials and that if this was to also improve their would be an added benefit to shareholders.

Cheers,
Te Whetu

[zac]

A good rundown on Nuplex from Sanfords. Much of the article reads like a PR handout but the info is generally relevant.

A NEW ZEALAND CONGLOMERATE NOW STRADDLING THE GLOBE

Sydney - Thursday - October 11: (RWE Aust Business News)
************************************************** ******

OVERVIEW
********

New Zealand has few sizable companies but one that has stood out for more than half a century has been Nuplex Industries Ltd (ASX:NPX). Based in a country where imports were the norm, the company started from scratch in producing its own products, then straddled the Tasman to Australia and onto to the world scene. Nuplex Industries is not a glamour stock in the sense of its activities. It's not in the rag trade, casinos, food or financials but has a very important niche in the building and construction industry through the supply of resins, construction materials and special waste services to industry and government sectors. The business is largely complementary to the resins business and has four segments. It is a distributor of functional raw materials. These include products for high compliance life science markets together with materials for the plastics and chemicals industries. It acts as agent for some of the world's leading raw material suppliers, offering manufacturers access to the world's latest technology and best materials. It is also a key provider of specialty construction materials.
Nuplex Industries reported a net profit of $NZ40.3 million for the year to June 30, showing a rise of 6.1 per cent on the previous period. It was achieved on revenue which increased by 11.6 per cent to $NZ1.4 billion. But cash flows were down for the period, partially due to a
temporary increase in working capital in the latter part of the year. As a consequence the debt to debt plus equity ratio has increased from 51 per cent to 53 per cent at year end. Higher revenues and raw material costs, increased stockholding of raw materials in response to shortages and the impact of acquisitions all contributed. Some $10 million cash returned to the business shortly after closure. Directors declared a final dividend of 20.5c per share with an imputation credit of 2c per share. This brings the total dividend paid for the year to 36c per share and represents an increase of 7.5 per cent over the prior year. An Australian franking credit will be attached at the maximum rate. Overseas resident shareholders will also receive a supplementary dividend of 0.7169c per share. The dividend is payable on October 19. Shareholders are offered the opportunity to participate in the dividend reinvestment plan (DRP). The full year dividend will distribute $28.7 million, representing 71 per cent of operating profit.

SHARE PRICE MOVEMENTS
*********************
Shares of Nuplex closed steady at $6.30 yesterday. Rolling high for the year is $6.69 and low $5.67. Dividend is 28.41c to yield 4.51 per cent. Earnings per share is 29.93c and p/e ratio 21.05. The company has 79.9 million shares with a market cap of $503.3 million Chairman Fred Holland has outlined the company's prospects. He said earnings are anticipated to show significant growth during the 2007/08 year. The elimination of $8 million of losses in the current year; benefits from a full year of the Huntsman Composites acquisition, the exit of Specialty Products from the Seven Hills site and refocus of its business portfolio, sales from new capacities in the UK and The Netherlands that will be commissioned late in the first half of the new financial year and the general benefits of restructuring will all contribute substantially to this. Demand from US and Australasian markets is likely to be flat but Asia should continue to grow and Europe is expected to hold the recovery that has been evident in the past year. With around 90 per cent of sales in currencies other than the New Zealand dollar, the current weakness should increase returns from international operations. Raw material costs are expected to remain high for the foreseeable future requiring continuing focus on margins and working capital. Both the Seven Hills and Avondale sites are undergoing
remediation and are destined for sale within the new financial year, Mr Holland revealed.
In the annual report released at the end of September, the chairman said new directors Rob Aitken and David Jackson have contributed strongly to the Board. Mr Aitken, whose appointment was confirmed at the last AGM, is showing the benefits to the company of his international business management experience and knowledge of Australian public company practice, and has further contributed through his role on the Remuneration Committee. Mr Jackson was appointed to the Board at the last AGM. His long career in the accountancy profession and knowledge of New Zealand public company practice can be seen clearly in his work both with the Board and as a member of the Audit Committee, Mr Holland said. Earlier in June the company advised its customers, employees and suppliers of the immediate closure of its manufacturing operations in Brazil. Annual losses in the order of $3 million will be eliminated as a result of this action. Closure costs will result in an abnormal charge of $1 million, additional to the $2.5 million plant and equipment write-down taken at the half year.
But South America remains a strategic target market for the company and a strong presence will be maintained there. Future market requirements will be serviced from existing regional Nuplex manufacturing operations through its Sao Paulo-based sales and distribution office. In other major growth and restructuring projects, key capacity building programs in Europe will be completed in line with forecast, and will contribute significantly to next year's performance. The Seven Hills Australia site will close by June 30, a little later than had been originally planned, but the view of benefits from this closure in future years remains positive and unchanged. The delayed closure has resulted in higher operating costs than anticipated in the current period which will affect this year's result. The European business has suffered a bad debt in the order of $2 million which will have a one-off effect on this year's result. As a result of this, the delayed closure of Seven Hills, and the effect of a strong New Zealand dollar, EBITDA for the current year is expected to be at the bottom, or marginally below the $103-$110 million range previously forecast. None of these situations will affect future performance. With the current restructuring program completed and capacity
growth projects in line with forecast, the company remains confident of a substantial lift in profit in the 2007/08 year, in line with previous announcements.

BACKGROUND
**********

Nuplex Industries Ltd is a listed New Zealand-based company with business operations in Australia, New Zealand and Vietnam. It listed on the Australian Stock Exchange on November 25, 1999. Nuplex began in Auckland in 1952 as a flooring distributor. The company quickly diversified into self-levelling flooring manufacturing during the 1950s. Problems with an import licence for a key resin resulted in the commencement of producing resins in New Zealand. Initially the product was used for the company's own use, before supplying to industry. During the next 20 years Nuplex grew by broadening its range of polymers and resins by licensing technology from leading producers in USA and Europe. Growth was also achieved through developing new markets for niche products in Australia, Asia and the Pacific Islands. During this period the flooring business expanded into a broader
range of specialty construction products including decorative and hygienic flooring technologies and exterior cladding systems. Since the early 1990s, Nuplex has combined organic growth and strategic acquisitions to move to a position of market leadership in Australia and New Zealand. The strategy was to rationalise industries that had become fragmented during the era of tariff protection up to the 1980s. The consolidation of domestic volumes provided economies of scale that ensured manufacturing in the Australasian plants could remain competitive. Today, Nuplex develops, owns and uses world-class resin technologies and processes. It has nearly 2,000 employees operating in 15 countries, and manufacturing plants in New Zealand, Australia, Europe, Asia and North and South America. The company manufactures and markets resins, polymers and construction materials and offers services for the treatment of special wastes.
Nuplex says the strength of the company lies in the dedication, skill and knowledge of its employees in identifying and meeting the needs of its customers through the application of world-class technology, enhanced by local development and innovation.

[Deev8]

I sorry that you didn't understand, the raw material costs are still high in USD but the weakness in the USD means overall lower raw material costs.Thanks for the clarification. :)

[winner69]

This little bit in the Herald this morning ....... wondering what implications of 'raising cash'
means for shareholders?

Nuplex ambitious
6:30AM Thursday October 25, 2007

Chemicals group Nuplex Industries said yesterday that it expected significant earnings growth over the next two years as it looks to raise cash to fund an ambitious expansion plan over the next four years.

Managing director John Hirst said the company was aiming to double in size through building new manufacturing plants, primarily in the developing economies of China and India, and acquisition as the global market consolidates.

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[whatsup]

Cash issue in favour of s/holders!??

[blackcap]

Thats interesting. Wonder when they will announce anything to market. I have held some for a while, generally happy with my investment. This could really change things for NPX. THen again could it only be one of those newspaper stories with no substance?

[Lawso]

NPX agm is next Friday, 2/11. We should get more info then.

[Lawso]

NPX has been an OK performer for me. I first bought in 5/02 @ 320cps. The price has been pretty flat the last year or so, for reasons that have been well set out above. But the erosion of NZ imputation credits has made the stock less attractive for Kiwis from a yield point of view. It's fully franked in Oz but my latest dividend statement shows an imputation credit that I calculate at only 8.8% of the 20.5c gross divvy. The previous payment, in April, showed an imputation credit of just over 20%. This time the RWT is $272 on a gross of $1130.

[beacon]

Lawso, the continued lack of Imputation credits is beginning to ire me too.

[macduffy]

Lawso, the continued lack of Imputation credits is beginning to ire me too.

I guess its just a fact of life as NPX does more of its business and makes more of its profits, offshore. Try and think of it as " internationally diversifying" our portfolios!

Disc: Hold NPX

[Lawso]

If the lack of imp. credits were offset by a decent growth rate I'd be less critical. Let's see what they have to say at Friday's agm.

[Lawso]

This little bit in the Herald this morning ....... wondering what implications of 'raising cash'
means for shareholders?

Nuplex ambitious
6:30AM Thursday October 25, 2007

Chemicals group Nuplex Industries said yesterday that it expected significant earnings growth over the next two years as it looks to raise cash to fund an ambitious expansion plan over the next four years.

Managing director John Hirst said the company was aiming to double in size through building new manufacturing plants, primarily in the developing economies of China and India, and acquisition as the global market consolidates.

Chairman Fred Holland was asked about this at the meeting on Friday. He said the Herald report was a bit misleading as the board so far had no firm plans to raise cash via an issue. Asked whether, if an issue were made, small shareholders would have a chance to participate or would the offer by confined to institutions. Holland said that whatever did eventuate the board would aim to act in the best interests of all shareholders.

So make what you can out of that.

[zigzag]

Lawso - I read that piece in the Herald also. It seemed like fairly significant news at the time, but I couldn't find out anything further. Now it would appear to be another example of confused reporting from the Herald. Thanks for the clarification.

[winner69]

Been hammered the last few weeks with a lot of other s and down to 620 today

Forecast eps this year range from 54 cents to 63 cents ..... my est is 58 (just happens to be in the middle) which means NPX is getting reasonably 'cheap' again

Maybe punters worried about a global softening in demand .. esp in Europe ... is causing the negative sentiment ... or just the mood of the market.

All the acquisitions over the last year have nearly tripled the size of the company but they seem unable to deliver on the eps increases they say these acquisitions will bring ..... like revenues are more than 3 times what they were in 2002 but eps history is pretty disappointing

Expansion into India etc makes sense but then again they prob will come cap in hand to shareholders to raise the cash and the subsequent significant increase in the number of shares just appears to dilute earnings.

Is a pretty good company and i often get tempted at times like this - if it delivers as evrybody expects then 620 is only 10 times earnings .... with the liklehood of a good year in 09 ...... but that nagging doubt about them delivering always remains ..... which prob means I'll wait until is 'cheaper' still .... but watching those charts in the meantime

[macduffy]

Agree with all of that, winner. But not worth trying to pick the bottom when the market's in this mood.:(
I'll be looking to buy too when things settle down.

Disc: Holding NPX.

[Dubdee]

NPX's Imputation credit postion can be fixed and a number of investment banks have suggested how to do it. De gear NZ and regear Oz. This was last proposed in relation to their recent roll over of capital notes but they did nothing.

I am betting the company listing will be relocated to Oz as thats where most of the senior management resides anyway.