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Author Hydrogen Economy     View Profile     Add to favourites     Ignore
Date posted 2017-01-16 03:36
Subject Share Buy Back & Prospects   View parent message
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Buy-back is purely administrative, RNS on 13th. indicated

"The Company intends to hold these shares in Treasury to satisfy awards made under employee performance share plans."

I have been considering a purchase here. The valuation depends a lot on the growth TATE can achieve in their new products. They have built this business from scratch to sales of 86m since 2012. The indicated target sales of 200m by 2020 looks a stretch but they seem confident, there appears to be good progress in the speciality products division.

I think they have made a smart move in shifting out of sugar and focusing on other products, particularly those in the health food area which looks set to continue to grow. T&L are leading suppliers into the energy bar and yoghurt drink markets and splenda is a leading brand in the huge low-cal drinks market. Fx will support earnings which are nearly all overseas, but significant debt in USD/Eur likely to balance that somewhat.

Forecast EPS from Digital Look (normally adjusted) for 2017-19 is 44.8 47.77 49.0
4 traders normally quote unadjusted numbers - 41.3 43.6 46

Either way well up on 2016 EPS of 34.5p, 34.7p or 34.8p depending whether you take it diluted, adjusted or straight.

Div is forecast to rise modestly from 28p in 16 to 29.5p in 2019, a solid 4%+ at current SP with decent potential for capital gain.

Clearly there is some execution risk, food markets, especially health foods can be fickle, but on balance I am inclined to take a modest position here, maybe upto 3%.

Appreciate any thoughts or comments.

H2











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