Yes Grey, I've had these share for three years now as a "value purchase". I buy mainly for dividends so regardless of the ups and downs , we shareholders are currently getting a 4.9% dividend.
I'm a " forever" holder so I don't keep tabs on the capital value. Of course, if there's no dividend at all (heaven forbid) I'd have to sell.
So who knows, I may be here in 10 years time. (I have shares in my portfolio from 24 years ago!!).
I understand the frustration Doug, but nowadays companies do not have to put out quarterly updates at all, so I am thankful for anything they give us; and they would have had to say if anything significant had changed.
"dial in" ? Nah - can't be bothered. If in 2018 a global company can't put a sound file on their awfully designed website then it's a pretty poor show. Also no numbers whatsoever in the trading statement. Things like this tend to really put me (and I'm sure others) off a company. Compare this with CPG who also had a trading update today with plenty of numbers. I think TATE need to get their act together a bit.
Sorry Doug, I haven't looked for it, but I would hope it would appear on the company website err too long.
Your analysis is good, but depending on time scales can be interpreted in different ways: positively or negatively. Over the last 3 years sales and profits have advanced quite nicely; and indications are this will continue for this year. Dividends were held but have increased a bit this year, so the promise of a progressive dividend is implied. Also it's a yield of over 4.5% at current levels, and comfortably covered by profits. At the interims they showed debt & pension deficit had reduced nicely, so everything appears to be moving in the right direction. And with a historic PE of around 11, this looks excellent value.
Of course as Essential points out, with such an international spread foreign exchange rates can have a significant effect on results, but if everything is going in the right direction, these tend to even themselves out more or less over time.
Has anyone got a transcript of the conference call this morning? Or a link to the presenation? Tried looking but can't find it - maybe will offer some more insights?
Falling to 612p as I type. I too thought the results were good (if not great) and I expect the mkt reaction is because expectations were higher and were hoping for more positive future guidance than "in line". In addition the words "profit growth moderation" sounds like a thinly disguised get out clause for any future profit warning. Any look at SP over 3 to 5 years shows Tate haven't really progressed much and has been consistently below FTSE. Also, very minimal dividend increase in 5 years.
Yes, very disappointing so far as to how the market has reacted. Seems like a solid update so would have thought this would be reason to at least hold, unless investors sense better opportunities elsewhere.
Fairly uninformative, but "The Group saw volume momentum in its Speciality Food Ingredients and Bulk Ingredients divisions and remains on track to deliver progress in adjusted profit before tax in constant currency for the year ending 31 March 2018, in line with guidance." I think is positive, but the market obviously disagrees.
Although the UK is a relatively small part of their business, T&L are one of the companies which stands to gain from Brexit. Shortly after the referendum I heard of the Directors on the radio, explaining the way Euro subsidies & taxes weigh heavily in favour of Euro sugar beat producers, and against cane producers.
I thought the results good too and couldn't see anything to worry except that perhaps future share price growth will come about through Sterling weakness more than anything else. Obviously the business is running efficiently on all cylinders. I bought £10000 worth last week as a hedge against a poor result for the Tories. Only a small part of Tate's revenues come from the UK.
"Is LSE:TATE:Tate & Lyle's turnaround intact? Weak commodity prices and supply chain issues triggered a fall in Tate & Lyle shares from 883p in 2013 to 502p in the summer of 2015. Then came a strong recovery to 810p, only for the shares to plunge ..."
It is the FX impact that concerns me at the moment, not as straight forward as weak sterling equals better earnings due to overseas bias. The Mexican Peso in particular, which a lot of the sales to the US drinks manufacturers are in, is at an all time low. The visibility of this effect in the accounts is poor - except for the company stating that hedges to some degree and MXN is 2nd most important currency after USD.
I would also view NAFTA break up as a risk, as could slap on a tariff on those exports into the US. This won't happen overnight when Trump comes in, but he has already put some direct pressure on US car manufactures looking to build their new plants south of the border and had go at BMW recently to the same effect.
Some of the value metrics are attractive but not without political risk. The FT did a couple of good articles on the above during ~Q3 last year which could google if want further info.
All sensible comments of yours, m8. I used to hold TATE for several years and my image of it is as a serial disappointer over the long haul. Things may be different now but I'm disinclined to take a long position in it mesen. Good luck if you feel otherwise; you could well be right.
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%.
Commencement of Share Purchase Programme
The Company announces that it will today commence a share purchase programme over 2,000,000 of its ordinary shares of 25 pence each in the capital of the Company (the ?Share Purchase Programme?).
Any purchase of ordinary shares done in relation to this announcement will be carried out on the London Stock Exchange and executed in accordance with the Listing Rules and the Company's general authority to make market purchases of its ordinary shares. The Company intends to hold these shares in Treasury to satisfy awards made under employee performance share plans.
The maximum pecuniary amount allocated to the Share Purchase Programme is ?15 million and the maximum number of ordinary shares that will be purchased under the Share Purchase Programme is 2,000,000. The Share Purchase Programme will commence on 13 January 2017 and will end no later than the expiry of the authority obtained at the Company?s last AGM on 21 July 2016. This authority expires at the latest on 30 September 2017, or, if earlier, the date of the Company?s 2017 Annual General Meeting.
This should give a boost to the SP as the EPS rises.
"We'll always want sugar even if Beke Off goes to channel 4.'
I really don t know what this has got to do with Tate&Lyle as they don't refine (produce) any sugar. Their refining plant in the UK and the brand name of 'Tate&Lyle sugars' has long since been sold to an American company who also bought the Tate&Lyle brand.
Tate&Lyle currently have two divisions - bulk and speciality. Bulk are sugar based, but have fewer calories than refined sugar. They are currently primarily used in drinks such as Cola. Speciality products are materials that tasle like sugar, but only have 10% of the calory value of sugar. By 2020, the company has the objective of being 70% Speciality and 30% Bulk.
So the company is divesting itself of sugar as fast as it can; sugar lovers should look elsewhere.
I agree that nobody has told Tate&Lyle's marketing department what the strategy is, but this is just one reason why the shares are being held back.
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