Another slice of UK technology sold off at a low sterling discount.
OXIG been rising of late, this announcement seems to have given it another nudge upwards. Not sure how far it will go, its been a couple of years of continual slide since the peak of about 1800p.
I'm in with a pool price of 720p maybe take a slice of profit soon but will hold rest for now.
This announcement includes inside information
Release date: 7.30am on 26 April 2017
Oxford Instruments plc
Sale of Industrial Analysis business to Hitachi High-Technologies
Oxford Instruments plc, a leading provider of high technology solutions, information and services for industry and research, today announces that it has agreed to sell its Industrial Analysis business to Hitachi High-Technologies Corporation ('HHT') for a consideration of £80 million on a cash and debt free basis. HHT will acquire the companies, assets and liabilities that comprise the Industrial Analysis business.
The Industrial Analysis business is a leading global provider of handheld and bench-top instruments using X-ray Fluorescence (XRF), Laser Induced Breakdown Spectroscopy (LIBS) and Optical Emission Spectroscopy (OES) technologies for analysing materials in a broad range of industrial applications. Headquartered in Oxford, UK, the Industrial Analysis business has research and development and assembly operations in Finland, Germany and China and sales and support operations in a number of countries around the world.
The transaction is subject to regulatory approval in Austria, confirmation of receipt by the relevant regulator of the share transfer filing in China, and completion of a pre-sale reorganisation to carve out the relevant businesses. Assuming satisfaction of these conditions, the transaction is expected to close in the second quarter of the 2017/18 fiscal year. Proceeds will be used to reduce existing borrowings. The current Industrial Analysis management team will transfer with the business.
In the financial year ended 31 March 2016, the Industrial Analysis business had revenue of £49.5 million, adjusted operating profit1 of £3.3 million and normalised business level adjusted EBITDA2 of £8.2 million. The gross assets at 30 September 2016 were £35.6 million.
Ian Barkshire, Chief Executive of Oxford Instruments, said:
"The sale of the Industrial Analysis business follows the continued strategic review of our portfolio and is a key element in the ongoing transformation of Oxford Instruments. I am confident that our Industrial Analysis business can look forward to a bright future as part of Hitachi High-Technologies. We look forward to working with HHT's management team to deliver a smooth transition of ownership.
"This transaction creates a more focused NanoTechnology Tools and Service business with some improvement to operating margin and will bring net debt to EBITDA leverage after completion to below one times on a pro-forma basis for the year ended 31 March 2017".
Toshiyuki Ikeda, Senior Vice President of Hitachi High-Technologies Corporation, said:
"We intend to contribute to society by strengthening the product range, providing safe and secure solutions for the environmental, food safety and security sectors. We look forward to a smooth integration of the business and welcome the employees of Industrial Analysis to HHT".
1 Note: adjusted operating profit excludes amortisation of acquired intangibles of £4.0 million and a non-recurring credit of £0.1 million, and is after a charge of £0.8 million for central costs.
2 Note: normalised business level adjusted EBITDA comprises operating profit before depreciation and amortisation, and excludes non-recurring items. There are further adjustments to remove Oxford Instruments' central costs and to normalise for other one-off items.
"Oxford Instruments, a leading provider of high technology tools and systems for industry and research, delivered good performance in FY 2016. The company's revenue fell owing to structural changes within the superconducting wire market and completion of a service contract. Oxford Instrument's profit levels surged, driven by improved performance nanotechnology tools and service sectors. The company continued active portfolio management with timely
acquisitions and joint venture agreements. Oxford Instrument's focus on cost- saving programmes and operational enhancements boosted operating cash flow. The company has a strong order book of £140.4m, 12.1% higher than the previous year. Oxford Instruments started FY 2017 on a positive note with revenue in line with last year and profits marginally higher."
" £5....next level.<<<naughty chaps..didnt give me a ..BANG ON!! "
I missed it. Too busy burying my head in the sand with this one. Ordinarily I would have been tempted to buy another tranche but the yield is almost not worth writing about so a better home for my cash is needed. 'Tis an ongoing quandary for this income seeker...
I have bought a small position this morning as I sense (hope) that we may be nearing the bottom. The fall from the top has been dramatic and who is to say it wont go further (yes £5 may well be possible) but if we are to believe that there is long term potential for the company's products then any further serious decline would almost certainly see it taken out IMO.
The market cap to turnover ration is now not far above 1 which in a high tech area is low, that gives me some confidence and if the chart were to show some improvement then I would be inclined to add.
I also think this is a good longterm entry price. Have watched for a long time. Bought some for the first time at 165p. Taking the risk of further fall tomorrow on likely adverse press comment but after that I think it shd recover.
A peace deal in Ukraine, sanctions lifted, Russian bear everyone's friend again....OXIG sales to Russia for this year and next recently abandoned by OXIG could be back on. Maybe not all but enough to bounce this rascal upwards hard?
I see you've posted on a couple of bb's at least that the markets in general are due for a reverse. In your opinion is this imminent? Obviously the FTSE is only a 130 odd points its peak. Is that your reason? What else is the cause, interested in your views as aware many countries still in turmoil and economic slowdown from Brazil to China! No one is immune.
Might pop a few bob in mining ventures in Venezuela as that seems safe!
Thank you. I don't have your skill or understanding, but I thought this looked as though it had farther to go. I had some dealings with Andor, who they bought out a while back, and there could be some nasty surprises to come from that quarter. Thanks again. My powder remains dry!
it did bounce earlier..made a few £..but spread was wide..this is pivot area so should bounce..but I dont like these types that have done very well..look at XAAR..etc...could plummet all the way to bottom pivot....hope u not in..better opps elsewhere..markets havnt began tanking yet..
Looks like Blackrock have been busy in the market - taking a 5% stake in Oxford. You maybe right that there will be some downward pressure but i prefer to take a stake and watch it over a number of years. Any short term gains are a nice bonus and I'm comfortable with dips in the price as long as the business is investing in the future. I hold all those you note - Avanti for many years when invested at £1.63 taking my original stake out when they launched Hylas 2 and the shares hit £7.50 which was well over valued at the time but I still hold the view they are a long term hold.
Kevin Boyd, Financial Director, bought 13 shares in the company on the 10th November 2014 at a price of 1144.00p. Good heavens! That's nearly £150. Whatever else you can say about it, it seems to show poor financial acumen. If he'd waited till today he could have saved himself £8
I liken Oxford Instruments to Abcam which is another British high tech company with a worldwide footprint. Abcam specialises in making antibodies and has shown fantastic growth since launch in 2005. The share price of ABC has risen from around 48p to 402p currently due to astonishing growth in sales and profitability and dividends. Jim Slater reckoned that PEG mattered more than PE ratio. In other words the rate of PE growth. PE ratio for Abcam is only 24 and yet ABC is still showing substantial year on year growth. On this basis ABC is a better buy than OXIG where the current PE is still a fairly high 31.
Unfortunately it is undeniable the rate of growth in OXIG profitability has tailed off recently so should not justify such a high PE ratio. This may explain the slump in the share price. The Andor acquisition should restore growth eventually but developing new instruments takes time (and money). For a PE of 24 the OXIG share price would need to drop from 985 to 762. Ouch.
I am still invested in OXIG which I am sure has a bright future but in the short term the price could slip lower until the expected increase in sales actually materialises.
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