You have an above average holding for a private investor and the Company might take some notice of you. LPA is not one of my larger holdings but I did invest some of my various family's funds into LPA, again on a modest basis. I only really keep them out of a sense of frustration that they should be capable of a much, much better performance and I live in hope that someone will rejuvenate the management, since I believe they have good technical skills. Anyway, old age has caught up with me and will rest for now and see what transpires over the next few months.
Although there is growth in the rail sector, I for one, do not know to what extent LPA will benefit over, say, the next five years and whether any such growth enables there to be longer term security such as lifetime care contracts aka Rolls Royce.
As mentioned in an earlier post, I have written to the CEO about my concerns but no sign of any action and although SP seems better value by the day, this is not nesessarily so without our having a growth strategy.
What to do. Sell out/buy more/ write again to Chairmen/CEO ( who are, in effect, the Board/ put motions to next AGM
Having held for such a long time, I am loathe to sell and believe it would be helpful if other shareholders could write to the Company expressing their concerns, especially over a growth plan and management succession. I will do so again later on and may try putting motions to the next AGM but that is a year away.
The badly worded update made no reference to the increasing growth rate of the UK Railways
The slide in the SP to 160p has indeed left LPA now in a position where a bid of 240p would represent a 50% premium to the SP today and would probably get the nod of approval from the BOD
Not good enough BOD ..... a RNS is needed to explain the bad wording that has done harm to the share price and put the company in a vulnerable position
Number of UK train journeys has doubled since 1997, report finds
Rail Delivery Group says about 1.6bn passenger rail journeys were made in last 12 months, up from 800m in late 1990s
Also this Railways growth is set to continue for the next 10 years and more
''Network Rail aims to cut delays and add services in £47bn five-year plan
The network operator is targeting an increase in rail services by 1,000 a day by 2021 in its "ambitious but realistic plan".
''Thameslink trains will in future use the technology, developed by Siemens and operating on Network Rails new digital signalling system, to run between London St Pancras and London Blackfriars at a rate of a train every two to three minutes a frequency never before achieved on Britains railways.
Automation will make this core north-south connection across the capital the new heart of the regions railway network. It will serve 80 more stations than today on 12 separate routes, helping create capacity for up to 60,000 more people in each peak and speeding journeys for hundreds of thousands of passengers.''
Thameslink Programme launches UKs first self-drive mainline train
Digital signals planned to ease commuter squeeze with more trains running per hour
I agree it was once again a badly worded statement.
We have no guidance as to this year and no sight of a revised broker note.
Caution is the word they use too much.
Why can we not maintain the new higher levels?
I think a five year plan would be good and maybe freshen up the board.
I certainly will not be selling under current fair value of 250p
We are wide open to a bid in my opinion
This such a frustrating company. It seems to have the technical capabilities to become a good growth stock but appears to have no focused plan on how to get there.
The AGM statement was a rambling, and confusing, series of observations. Why, when, at last, a good trading year without property sales profits, appears on the cards, we are told this is exceptional and might not be sustainable. Why not and does that mean we are going backwards again. At the same time as saying the new level might not be sustainable, it says that the company has established a new level. What new level is that.
What will happen when the railway boom, if that is what it is, comes to an end. I really think that a new younger and better balanced management is needed or the company absorbed by a bigger group that can better harness its skills.
I am in my usual state of thinking of selling but normally take succour from Tiger's optimism which we have not seen of late. I will try another letter to the Chairman and feel like tabling some resolutions for the next AGM or saying good bye.
Yes, Tiger, the AGM is a week on Wednesday. After the preliminary results announcement, I wrote to Mr Pollock along the lines of my earlier post here, asking what the management succession plans were, the need for a technical director and at least one female on the Board. Additionally, we needed to see a vision as to how the company could grow from its very small company base. I received a reply thanking me for the letter and saying that the Board were going to consider it at their meeting that day. I am hoping that the AGM, which I am unable to attend, will address some or all of these matters.
Reading the results and their enthusiastic reception by Tiger and others, with forecasts on imminent rises in the SP, I thought I was back one year ago, when results and reception were more or less the same. I have written to Mr Pollock the CEO along the following lines.
I read the report with a mixture of pleasure and frustration.
The best news was was the higher level of the current order book, the worst news was that sales only increased by 4.9% at a time when global trading conditions have rarely been better. Results were against weak comparatives, there being no bad debt write offs which, in themselves were a worry with two Chartered Accountants on the Board.
LPA has excellent staff, products and technical knowledge but remains a very small company and seemingly very vunerable to any adverse occueance.
Both Mr Pollock and Mr Rusch are in their seventies but we know nothing of any succession plan. I would like to see a plan for profits to grow 25% year on year for five years, for a technical director to be appointed to the Board and a highly qualified female, preferably an engineer with a marketing background, also appointed to the Board.
The Company operates or has agents in 22 countries and is active in very large industry groupings but this is not reflected in the size or apparent ambition of the Group. Already we are reading of potential capacity constraints both in terms of people and premisies, which is surprising.
I would hope that the group's vision for the future can be communicated to shareholders.
There were few other points, but the above is of the essence.
In my view, there is unlikely to be a better time than now to grow the company in order that it can prosper and not be so vunerable to the next adverse circumstance that will no doubt come along one day.
Without more dynamism, LPA will struggle to exceed 200p by much i.e only back to where it was and Tiger's 300p forecast last year, only something for us all to dream about.
Tiger - There is a good chance that in a couple of months' time many
a small private investor will say: ' Wish I bought when I could when
the price went below 170p'.
LPA certainly does look seriously undervalued. I am well invested.
CTiger - Probably a bit lazy. What was the old target in the broker note?
Generally wise not to take to much notice of broker notes, they are just too
often out of kilter / each way.
Anyway let us have the old/unchanged target please?
Agree. Mm look to be buying stock ahead of a push up
Its a lazy note today. The company is having a superb first half but no its not reflected.
Anyway sitting very tight with my stake
In my view the shares ought to be trading at around 210p, which I
base on EPS 15p miltiplied by PE-ratio 14. Higher is possible, but
meantime I think it reasonable to look to 210p for the short term.
Your grasp and summing up (here and elsewhere) is outstanding.
Systems (MM's?) just now do not allow buying, just selling. Feels
like MM's are building stock for a good gain later.
Give it a day or two and the share price will be well up on current
level of 170p.
Our order book and prospects in our home and export markets are very positive indicators. The current financial year has started well. We look forward to our medium and longer term future with great confidence."
"Sales output in the first quarter is significantly ahead of the same period last year confirming the continuing growth potential of the business."
With the Results this good, and as I said last week, 190p+plus now
looks firmly on the cards, probably see that within next couple of weeks.
EPS for current financial year are almost certainly going to be close to
15p or over. Put that to a very reasonable PE-ratio of 14, and we are
looking at a prospective share price of 210p.
The excp gain all but went with EXC costs but that's good for the future.
I was slightly under with my forecast but reading the results the first half has been much better than last year.
EPS over 14p now should be over 16p in this year as we are well (4 months) into it.
Anything under 200p is a steal I remain a buyer trying to pick up before WI Ireland put out a new target today.
Probably 220p plus but we know company always exceeds targets.
Dividend increase of 10% is a nice touch but the capital growth is where we can make money.
Strong asset base I expect a record first half that will push the price even further.
I particularly liked the following comment on the outlook,
"Last year finished full bore and this has continued into the current financial year. We expect business to settle down to a higher level than that previously achieved"
-- Sales up 4.9% at GBP22.482m (2016: GBP21.422m)
-- Operating profit before exceptional items up 23.6% at GBP1.895m (2016: GBP1.533m)
-- Exceptional and non-underlying items GBP73,000 (2016: GBP14,000)
-- Profit before tax up 26.3% at GBP1.914m (2016: GBP1.516m)
-- Basic earnings per share up 17.1% at 14.40p (2016: 12.30p)
-- Final dividend increased 10% to 1.65p (2016:1.50p), total for the year 2.70p (2016: 2.50p)
-- Gearing 25.7% (2016: 29.2%)
-- Order entry GBP26.1m (2016: GBP20.7m) up 26%
-- Order book GBP21.6m (2016: GBP18.0m) up 20%
-- LPA Lighting Systems successfully relocated to new facility during the year
I expect Results to be out early next week.
As for EPS, I think we can look for somewhere between 13p and 14p.
Should also the outlook for 2018 be robust, then, almost inevitably, the
share price could easily head for 190p-plus. Fingers crossed.
Important message from the Financial Conduct Authority:
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse.
This could lead to an unlimited fine and up to seven years in prison.
If you have any information, concerns or queries about market abuse, click here.
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.