My main source of information is their own reports.
They are quite coy about their competitive advantage but they do own patents covering their technology and they do spend money on R & D. Large touch screens is a particular emphasis and you can see that SP per screen for the large size is high and they are concentrating on increasing this part of their business.
I'm more into this business for its growing divi than expecting a large increase in the share price.
I think they concentrate on high margins.
Sales of their older products where they have less competitive advantage are in decline.
If you look at the sales revenue over time it is static. However profits, EPS, cash levels and divis are moving slowly upwards.
Still here since the IPO at £1.10 and its the time in the market not timing the market for me, happy to hold and let them tick along.Touch screen tech 10 years back was in its early days, and ZYT maybe will get a big boost !!!
With the large increase in the divi I calculate the yield based on the current share price is around 3.8%, it's well covered by earnings and cash flow, plus there is lots of cash in the balance sheet.
The Company seems to be gradually exiting less profitable markets and growing in the ones where their technology enables them to make greater margins. This results in good margin growth accompanied by subdued sales revenue growth.
The report indicates that sales levels are around the level of last year so no great shakes for an upward moving share price at the moment. Having said that they seems to be doing a lot of work on their marketing organisation which might suggest that their product sales may benefit from better exposure in the medium/longer term.
A hold for me.
Changed my mind, having re read the Trading Statement. Results due soon.
With increased overall revenue there should be some growth in margin. Also looking for a better cash position. Bought a few this am.
Tks pie eater,
I,ve given it some thought.
P/E ratio still quite high so will wait to see if there is a lower entry point.
Market seems a bit dicey (some price drops in stocks with high valuations) so will hold off for now. Still holding about 8 percent of my share portfolios zyt.
At 520p and a yield around 3%, this MAY be an interesting time to re-enter if you believe in the fundamentals of the company.
As previously stated this is still one of my major long term holdings and so am reluctant to add to it purely because of that reason. It can be quite a volatile share so perhaps may be a good time for a "trading situation" at the minute..
" Ahh! The perils of only meeting expectations when you are expected to exceed them. "
Couldn't have put it better myself....
Strange but if this had been one of a number of FTSE 100 /250 companies who under promise and over deliver the price would soar on publication of results. With this being much smaller it almost seems to be a case of take the money and run.
Will be interesting to see what happens immediately after the full results are published.
Think it was fair value and very strong hold c 590 - 600p so only weak buy at the minute, especially as due to it's growth is my largest single share holding (let alone on AIM)
As usual the Trading Statement is short in detail but to the point.
Results were very healthy at the interim stage. Margins and profits have seen growth in prior years despite only small increases in revenues. So a growth in revenue in 2017 (as the Trading Statement states) may herald strong growth in full year EPS figures.
I'm also wondering if there might be a one off special dividend associated with the release of previously reserved cash resources as announced earlier in the year.
"The veteran US fund manager Richard Driehaus, once said that he wasn't at all interested in buying shares that were out of favour in the hope they'd eventually bounce back. Instead, he preferred the idea of buying growth shares on an upward trend ..."
Anyone know why it did?
I'd be pleased for any good news in the tech sector at present
However decreases now mean better increases in the nearer future, so I tell myself after lashing out once again - this and IQE
yes I think they have good long term prospects.....can be a bit volatile though.
Not totally sure about the ATM side of things as ZYT are moving to bigger multi-touch applications like gambling and gaming machines. Can't really see multi-touch being a winner when someone wants to get £50 out of ATM or pay a bill etc......and think other providers will fill the space of the more "mundane" touchscreen applications as even they won't require the high tech screens ZYT make, just the software behind it.
Casino's, possibly large betting shops, even large tourist info offices such as in London, Paris etc or at major railway stations might all be in their sights.....possibly airport info centres???
Any way you cut it, am happy to buy on dips and hold for the long term (BPR etc) given a yield historically around 3%+
"Profits have gone through the roof at touchscreen sensors firm LSE:ZYT:Zytronic over the past six months. But there's a belief in the City it could do even better, and even with the shares up as much as 6% at a record high Tuesday, the valuation ..."
Having read the small print, it would be my understanding that following the "Capital Reduction" announced today, Zytronics has authority (but as yet no plan) to distribute an extra nearly £9 million to shareholders if the Board so wishes. If true this amounts to around 60p per share.
Anyone else read the small print and come to the same or a different conclusion?
Got the impression they were not hedging currency as much or as far forward.....may have been (incorrectly) influenced by recent fall in £ during this last year (surely now would be a good time to lock in weaker £ for exchange rates for sales abroad?)
Also think switch to higher margin units a good ploy, especially as these are the more sought after items.....and EPS hit 26.6p, which I know some were concerned might be missed at the half way stage.
The general tone of the report makes me think this was (to a certain extent) a consolidation year ready for another push following capital expenditure on new kit/space.
Happy to hold, and top up on weakness, as I believe a good AIM company with access to many skilled engineers / technicians in the NE and products that are wanted and technology that can be adapted to different applications.
Maybe the stock market does not like Companies that increase their profit margins at the expense of growing sales revenues and volumes, so profit is merely maintained or grows slowly.
ZYT seems to have made some clever moves to reduce it's taxation. This has to be a one off situation. Cash generation is strong and the divi is significantly increased but unless profit grow more quickly divi increases going forward will become more modest.
I'm not sure what to make of the large non cash item which has adjusted the profits downward. Does this mean the Company has hedged forward, fixing selling prices in sterling next year at exchange rates which are not as advantageous as those currently in effect?
Using SharePad to look for good yield shares this appeared as one of 13 from LSE listed.
Criteria were yield of 3.5% or more but less than 8%, forecast >4%.
Total return > 5% over last 12 months
Dividend cover >=1.3 X
ROE > 10%
Looking at summary of fundamentals it looks solid. Good progressive dividends.
Business seems to me like a bit of niche market which could be a good thing. Market conditions could be difficult at the moment but SP has fallen 27% since high at the end of last year.
My assessment is a strong buy though I would like to see SP trend go positive for a while.
AIM share with Market cap of £49.3M.
If you look at zyt historical eps you will see that H1 eps is always significantly below second half figure. My assumption is that they are probably understated. So I would not worry too much about that. The business they are losing is low margin. Not sure if this is a deliberate ploy or they have competition taking this from them.
Big question at what rate they can expand their higher margin big screen business where I assume there is much less competition. They certainly seem to be promoting their large screen business.
My problem with ZYT's current valuation is nervousness about them meeting expectations this year.
ZYT made 9.6p EPS in this H1, so that leaves them having to make 16.3p EPS in H2 just to meet the 25.9p EPS forecast.
They made 16p EPS in last year's H2, so it's certainly possible.
But this year's H1 was characterised by a big decline in the traditional business sales of glass displays and filter products. So ZYT had to run fast just to stand still. Since touch product sales only increased 5% over last year this meant group profits improved overall given the higher touch margins, but not enough to make a big difference.
The outlook suggest a continuation in H2, with traditional business again slipping and being outweighed by touch.
This year's forecast/expectations have perhaps been overinflated by last year's exceptional H2.
It's a long time until the next trading update in October, so I'll probably stay out until confirmation at that point that H2 has - or hasn't - been able to achieve a similar improvement in H2 to last year.
For me, the results do not suggest any fundamental change in the quality of the business so I will continue to hold for the long term and am willing to accept the ups and downs along the way. I sometimes think I must be in a tiny minority of investors with this philosophy which I guess should be encouraging.
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