Laird; Update; Strategy presentation; Good stuff!

1st Mar '13 by johnrosier

6 comments 7615 reads

Laird (247p and 3.8% of JIC portfolio); The Company announced a solid set of Results for the year ended 31st December 2012. Pre-tax profits were marginally ahead of consensus up 17% at 60.7m, and earnings per share came in up 18% at 19.1p (consensus 18.8p). Results were driven by an improvement in operating margins from 11.9% in 2011 to 13.1%. Cash generation was strong. The full year dividend was increased to 10p, up 25% on 2011's 8p and in line with the Company's stated aim of delivering dividend payments at a compound annual growth rate averaging 24% from 2010 to 2013.

David Lockwood, Chief executive is confident about the Company's prospects although warns that it will be second half weighted as a result of the timing of its customers' product launches. The first quarter will see revenues flattish year-on-year as the Company continues to see the impact of its withdrawal from lower margin business. He is confident that the Company will make good progress in 2013.

Conclusion: On consensus forecasts the shares are valued at 11.4x 2013 earnings for 13% earnings growth and yield 4% rising to 4.8% in 2013. Shares look good value to me. Happy Holder!

www.JohnsInvestmentChronicle.com

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johnrosier

3rd May '13

Laird(216.25p and 4% of JIC); A comprehensive trading statement from laird this morning covering the period from 1st January to 3rd May. Revenue is down about 6% year-on-year on an organic basis and it states that revenue with its largest customer was 17% lower. Operating margins are also lower. The Company says it expects to return to year on year growth in the second half as it benefits from its own and its customers' new product launches. Most importantly it says that its expectations for the full year remain unchanged although it acknowledges that this partly due to the translation benefits of a stronger $US.

Conclusion; The tone of the statement was similar to that accompanying the 2012 full year results at the start of March, although on balance trading so far this year has probably been a little weaker than the Company was anticipating. The shares have pretty much moved sideways since last July trading in a 200p to 250p range. I feel that although the Company is confident that growth will pick up in the second half, the market will want to see evidence of this before the shares can make real progress. In the short term there could be some weakness but I would hope that the 200p level would again provide support, where it is on a prospective yield of 6%. The question I ask myself is "might there be better opportunities elsewhere?"

23rd Oct '13

23rd October 2013

Laird (225p and 3.4% of JIC) The Q3 trading statement issued this morning shows that business picked up during the quarter as management had expected. Revenue was up 4% on a like-for-like basis compared to Q3 2012 and for the 9 months was down 3%, reflecting the poor first half. Growth was driven by a strong performance in the Performance Materials Division which benefited from new product launches by its customers in the gaming console and smartphone market. Margins have also improved as a result of operational gearing but also a better product mix. Wireless Systems Division turnover was down 5% year-on-year but the Company says that it has recently stared to see an increase in the number of bookings from industrial customers

Conclusion; although management says that 2013 results are likely to be in line with expectations it is a relief to see that the expected Q3 pick up did actually materialise and that the tone of the outlook statement is optimistic. On consensus earnings forecasts the shares are valued at 12.5x 2014 earnings, falling to 10.8x 2014 for 15% earnings growth. An added attraction is a prospective yield of 5.3%. The shares continue to look good value to me. Happy Holder.

9th Jan '14

Laird (293p and 3.8% of JIC Portfolio) has issued its year end trading statement this morning in which it says that, as anticipated, the second half of 2103 was much stronger with Performance Materials in particular, showing improved demand from smartphone and consumer markets. It says that it is confident of meeting its expectations for the year and reaffirms its recommendation to pay a total dividend of 12p. It also announces that the Telematics business has bought out its existing “Manufacturing Representation” agreement which will allow it a “more direct approach to market”. Anyway, that will result in an exceptional charge of £5m in the 2013 results contributing to a total charge of between £8 -10m. In a separate announcement it says that it is expanding its Asian presence by opening a manufacturing facility in Vietnam; it will manufacture products for the global smartphone and portable electronic market with production starting in the second quarter of 2014. It will cost between $10.0 and $12.0m with $7m being expensed in 2014 and $3.0-5.0m in 2015.

Conclusion; it’s good to see the improvement in the second half and the overall impression of the two announcements is one of optimism about its prospects. It is good to see it investing in future growth through both expanding its operations in the fast growing Asian markets and by buying out the “manufacturing representation” agreement which it says will add £1m to operating profits in 2014 and more thereafter. The share price has had a strong start to 2014 and is now on a 2013 yield of 4.1% and on current forecasts a 2014 PE ratio of 14.1x for 15% growth. As I said on Tuesday in my New Year review, I think the valuation is starting to look pretty much up with events and I would think twice about buying a new holding today but for the time being would ride the momentum in the shares. My view remains the same today. Happy Holder!

Laird (315p and 3.0% of JIC Portfolio) the shares have moved up by 11% today which I find a little mystifying. In the short term it now looks over bought, (see RSI in bottom chart at close to 80). I have therefore given the position a “hair cut”, reducing it to 3.0% and booked some profits. (See transactions)

29th Jan '14

Laird (313p and 2.9% of JIC Portfolio) I spent over an hour this morning listening to a recording on the company’s website of a “strategic update” presentation given by the Chief Executive and other senior management, yesterday morning. I think the key points were; since David Lockwood became chief executive, in August 2012, he has driven a cultural change that has seen greater collaboration between the various businesses within Laird and between Laird and its customers. It is striving to be a “trusted partner” with its customers, based on “innovation, reliable fulfilment and speed”. It believes it has a massive opportunity with its existing customers, who comprise “some of the biggest and most famous companies in the world”, and through the explosive growth in the proliferation of electronics and connectivity in the home, cars, workplace and healthcare to name a few. The future is all about thinner, smaller, lighter, more flexible and connected products and Laird has a part to play by providing its OEM (original equipment customers) with solutions. Launches of new products are becoming bigger and more frequent which plays in to Laird’s hands; customers are prepared to pay for innovation and fast delivery. Part of its strategy of getting closer to its customers has been to expand geographically, with it currently scaling up a factory in Hanoi, supplying a major regional smartphone manufacturer, opening a design centre in Seoul and increasing manufacturing capacity in Shenzhen.

Conclusion: an excellent presentation which opened my eyes to the massive opportunity that Laird has and to the quality of the top management, especially David Lockwood, who is driving change to ensure it captures as much of this growth as it can. The “Internet of Things” is currently receiving a lot of attention in the press, partly because there are more and more tangible examples of it already happening, but because we are only just at the start. It is often difficult to find stocks with which to play a theme, that are not already on huge “blue sky” valuations; Laird might just be the answer. Laird’s trading statement on 9th January was positive and I suspect full year results, when announced on February 28th will be another optimistic affair. Yesterday’s presentation sparked a 5% rally in the stock so that on current consensus forecasts the shares are valued at 15.6x December 2014 earnings for 15% growth and 13.4x December 2015 for 20% growth. In addition it is on a forecast December 2014 dividend yield of 4.0%. I reduced my holding to 3.0% at 315p following the trading statement; perhaps I was a little hasty. Very Happy Holder!

rhomboid1

2nd Mar '16

http://www.laird-plc.com/reports-and-presentations/rp-2016

The latest results look to show good progress, now might be a good re entry point if you're no longer holding? profits and divi up , hefty exceptional costs to close 10 sites and redraw the footprint to improve capacity , margin and reduce costs.

David Lockwood gives interesting presentations and today's was particularly informative, it also seemed to go down well as the shares rose a chunk which is nice as this is my largest holding .

Laird; Update; Strategy presentation; Good stuff!

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Johnrosier

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