Skellerup (SKL) Fundamentals

1H10 looks a bit more upbeat then previous announcements.
- Net debt reduced to $34m from over $100m a year ago.
- Resumption of dividends.
- Profit upgrade from $7.1m to $8.5m.
- Operating cashflow up.

The company forecasts FY net profit to 30 June 2010 of $8.5m ($9.5 if you exclude the one-off currency expense/loss).

EPS = $8.5/188.4m shares = 4.5c
PE = 52c/4.5c = 11.5x

I notice in the presentation that the company is forecasting net profit for the y/e 30 June 2011 of approx $14m.

EPS = $14m/188.4m shares = 7.4c
PE = 52c/7.4c = 7.0x

Yes, I agree that this result is likely to mark the turning point for SKL. I would say it is likely there will be another profit upgrade prior to FY results - perhaps to above last year. Dividend is probably weighted to this half though to use imputation.

Yes I agree the half year result was very positive. I think this company is on the up. It has markets all over the world and as these pick up so will their profits.
At the annual meeting last year they spent a good part of the meeting outlining some of the produces they have developed and the projected growth from these produces over the next few years as they win market share.

Looks like they may have there act together. Well i hope so!

Always good to keep an eye out for the quarterly newsletter.
Don Stewart is always the key read - sounding positive that trading has been above expectation, January sales kicked off well and reiterating the forecast of a return to "normal profit levels" for 2011.

The profile on Tumedei also forecasts a 30% increase in sales budget for next year.

Though a vote of appreciation from the owner of a pair of gumboots that were purchased in 1968 (and only just began leaking) may suggest that repeat purchases are less common than investors might like :eek2:

Trading halt pending material announcement... based on the last few days trading, I'd say a "positive" ann, perhaps a takeover offer? (Personally, I think a takeover offer for SKL at this point would be a short term positive, but long term, a sad negative.)

...okay, trading halt to announce resignation of MD. The fact that a trading halt was called to announce this would surely have to raise a few eyebrows? If they are on the cusp of a turnaround, it hardly seems the time to leave - hanging in for another year or so would surely look better on the CV.

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Originally Posted by Lizard

.. hanging in for another year or so would surely look better on the CV.

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Being employed since 1979 and MD since 1992. A 31 year employment, and 18 years as MD, another 2 years would not make that much difference to his CV would it?

Perhaps you are right - where else do you go after that? Was just meaning in terms of proving the strategy - if his efforts since listing in restructuring to a technical polymer coy have achieved anything, the fruit has to show in the next 12-24 months. So it's unusual to leave before getting to enjoy the fruits - unless they're turning sour.

I guess from an MD perspective if the strategy is in place and the right people are still there to execute, and the board is well aware of this, replacing the MD with another is project management orientated will achieve the turnaround as expected.

On the trading halt issue, TEL did one yesterday as well over a forecast? I think listed issuers may have all just baulked at the Nuplex incident on Monday and are playing extra cautious.

Having a trading halt because a dude is leaving just makes the guy look like a total figjam.

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Originally Posted by Lizard

29-09-2009
I currently have a 12 month price target of 70cps.

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Something that actually hit one of my price targets... and with a few months to spare. :t_up: (Closed at 71cps. )

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Originally Posted by Lizard

Something that actually hit one of my price targets... and with a few months to spare. :t_up: (Closed at 71cps. )

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Any idea why the share price spiked mid afternoon anyone?

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Originally Posted by Lizard 18 Feb 2010

I would say it is likely there will be another profit upgrade prior to FY results - perhaps to above last year.

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Done. Forecast upgraded to $10-$11m NPAT (after abnormals).

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Originally Posted by Lizard

Done. Forecast upgraded to $10-$11m NPAT (after abnormals).

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Well done Lizard.

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Originally Posted by Lizard

Done. Forecast upgraded to $10-$11m NPAT (after abnormals).

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You truly are a Guru. Give this man an extra star.