EKT broker note... predicts a dire outlook. doesnt mate good reading. Own house broker has downgraded Elektron.
can be downloaded from here :
Highlights :
Outlook and Valuation. The order book is currently 5.5m or 0.9m softer
than at this time last year. We have therefore trimmed our sales forecasts for FY10 and FY11 to reflect these deteriorating conditions. In light of this and recent macro economic events, we reduce our fair value estimate from 16p to 12p or 6.6x our FY10 EPS estimate of 1.83p.
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2008 EPS 2.77p2009 EPS 0.96p ............... -65% from 2008
2010 EPS 1.85p................ -33% from 20082011 EPS 2.27p................ -18% from 2008
So even looking out to 3 years on.... EPS will be LOWER than what it achieved this year.
============ page 2 :
we do note that the average PER for the group has decreased from
7.35x to 5.48x and we are therefore compelled to reduce our fair value estimate on this basis.we accept that electronic manufacturing and consumer electronic end markets are suffering under the current global economic crisis and finding sources of funding to acquire companies have and will continue to be a challenge over the near-term. Therefore, we expect management to focus on improving operations in both the UK and overseas and do not expect any significant acquisitions for the rest of this calendar year.
Given the current macro economic climate and the specific risk of Elektron delivering its business plan to acquire and relocate manufacturing operations to China and Tunisia, we reduce our fair value estimate to 12p (Old; 16p) or 6.6x our FY10 EPS estimate of
1.83p.