FY2017 Profit Forecast: Iteration 1
Quote:
Originally Posted by
Snoopy
Fast forward to FY2016. Taking the base level profit of FY2015 (adjusted to $4.725m NPAT) how do I see things developing over the current year?
Amount |
Description |
Calculation |
$4.725m |
Baseline Profit FY2015 |
+$0.800m |
Interest saved from recapitalisation |
$1.132m x 0.72 |
+$0.194m |
Interest earned from surplus capital |
$9m x 0.03 x 0.72 |
+$0.226m |
HTS-110 elimination of losses |
$2.1m x 0.15 x 0.72 |
+$1.490m |
Meat industry Robotics (incremental) |
($15m-$1.201m) x 0.15 x 0.72 |
-$1.000m |
Appliance Production Lines |
Based of $13m sales, down yoy |
+$1.075m |
MAR sales annualisation adjustment (sales steady) |
$1.236m-$0.161m |
-$0.230m |
Adjust profit between FY2014 acquistion year & FY2015 peak |
|
$7.280m |
Forecast NPAT Total |
|
Other Assumptions:
1/ No change in the contribution of Rocklabs YOY.
2/ No benefit from decrease in exchange rate YOY. I am assuming that due to the weak mining and appliance line outlook some discounting will be required to acquire overseas work.
3/ No benefit from the new 'scale' that new capital was meant to bring. Benefits from scale should come. But I am not expecting any in the next twelve months.
In theory (assuming scheme of arrangement is approved by the court) there are now 74.8m shares on issue.
So NPAT eps for FY2016 will be: $7.28m/74.8m = 9.7cps
Last year the dividend was 8cps. So there is room to hold the dividend steady on the increased number of shares. Good for those pensioner shareholders (7.8% gross yield).
At $1.42, SCT trades on a perspective PE of $1.42/9.7 = 14.5
Given the hoped for growth potential with JBS as a partner, this sounds about right. However, the market will be watching to see some tangible benefit from the 'scalling up' of operations. That will take a couple of years to emerge, and one year for the market to price it in. Consequently I see little share price movement over the next 12 months.
Snoopy's recommendation: hold at $1.42, buy only on weakness.
Criticisim welcome :-)
Well that was a clanger of a recommendation wasn't it? 'Buy only on weakness', below $1.42, and the price has increased steadily to $2.18! Yet maybe not so bad as there was a period between December 2015 and mid March 2016 when SCT shares were available sub $1.40. I hope some of you out there got some. The 2016 result has not yet been released. But it is already history, and it is now time to turn our attention to FY2017.
|
Divisional Profit (NPAT) |
Explanation |
Superconductor Magnets |
$0m |
(Increased sales offset by costly new HQ) |
Meat Industry Robots |
$6.400m |
(20% NPAT margin on $32m sales, equiv 4 big installations) |
Appliance Production Lines |
$2.099m |
(Mirror of FY2013 segment result based on $16.3m turnover) |
Mining Services |
$2.981m |
(Adjusted from FY2014 segment result based on $17m turnover) |
Robotworx USA |
$0.817m |
(From FY2014 acquisition year) |
Interest From Cash Balance |
$0.630m |
(based on 3.5% taxed at 28%) |
less Head Office Costs |
($3.500m) |
(Unallocated FY2014 costs +30%) |
Total |
$9.427m |
(addition) |
With 74.788m shares on issue this gives a projected 'eps' of 12.6cps
At $2.18, SCT is on a projected PE ratio for FY2017 of 17.3.
That sounds reasonable, although there must be some execution risk and currency headwinds (we have really gone up against Australia) to overcome. So maybe the huge run up in share price made by Mr Market is justified? I guess time will tell!
SNOOPY
discl: holder
Snoopy sells down -again!
Quote:
Originally Posted by
Snoopy
Referring to my post 160, the actual profit for FY2012 of $5.5m was a little shy of my prediction of $7m. Nevertheless Mr Market didn't mind and the share price has been bid up to $2.60 today, a post dividend high.
There are now 40,983,443 shares on issue. So historical earnings per share is now 13.4c. At $2.60 this represents a PE of 19.4. This looks close to full value to me based on past results. So over the last week I have taken the opportunity to 'peel another layer off the onion'. Despite what I sold being barely an economical parcel to sell it has taken a week to get my order through. There are real pitfalls in holding a share where the liquidity is as low as this one! My back of the envelope calculation now shows that I have an average entry price of just 70c.
SCT has been a sensationally good investment for me, and I expect it will continue to be so into the future. In a years time there is every chance that $2.60 will not look so expensive. Yet I will sleep a little better at night now knowing that my portfolio has been brought more into balance.
I thought I had better come clean for all you 'Scot-tech-eers' out there. I confess I have been selling some SCT over the past couple of weeks. Got an average price of $2.10, which is 50% more than the same money I put into the rights issue shares just under a year ago. It looks like that if I had waited, I might have got a few cents more. But with the dividend yield diminishing, time to take some risk off the table and redeploy some of that capital elsewhere. Don't worry. I am still a 'Scot-tech-eer' at heart and intend to hold the balance of my shares (which is most of them). Average holding price is now 65c. So that is an improvement in comparison with my 2012 sell down four years ago. ' Buy into weakness' 'sell into strength' is my mottow with this thinly traded share!
SNOOPY