Australian (ASX) Stock Market Forum

MCE - Matrix Composites & Engineering

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MCE is really having trouble pushing threw this $6 mark. Lets hope it has a good financial report like FGE came out with today will push the share price up.
 
Risk Chaser said:
operating cashflow still remains a problem and NPAT missed expectations. :banghead:
Will beinteresting to see how it opens..
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OCF is what jumped straight out at me. $33m profit and $1.5m OCF. There was a pretty big jump in WC too. Income tax paid also was a bit more realistic than last year.
 
McLovin said:
OCF is what jumped straight out at me. $33m profit and $1.5m OCF. There was a pretty big jump in WC too.
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This was known at the HY report. Its improved significantly since then, but I agree - an issue none the less.
 
Still well undervalued at current levels by my calculations but as stated here, looks like they've missed forecasts and the market has reacted accordingly.

Sounds like MCE are dealing with the same headwinds as a lot of Australian companies in foreign exchange terms, greater competition in the sector and the continual expansion of employee wages due to a skills shortage. None of which are really in their control, however at least their order book is reasonable and they still signal growth in the sector which will continue as companies look for new oil and gas offshore.

On the basis of this announcement though if markets do get a brief rebound at some stage and MCE manages to meet its valuation (which for me is around the $8.10 mark) then it could be a good selling opportunity and still a great profit from these levels.

In short I think they are well undervalued, but growth may be more subdued in coming years then it has been previously.
 
kermit345 said:
Still well undervalued at current levels by my calculations but as stated here, looks like they've missed forecasts and the market has reacted accordingly.

Sounds like MCE are dealing with the same headwinds as a lot of Australian companies in foreign exchange terms, greater competition in the sector and the continual expansion of employee wages due to a skills shortage. None of which are really in their control, however at least their order book is reasonable and they still signal growth in the sector which will continue as companies look for new oil and gas offshore.

On the basis of this announcement though if markets do get a brief rebound at some stage and MCE manages to meet its valuation (which for me is around the $8.10 mark) then it could be a good selling opportunity and still a great profit from these levels.

In short I think they are well undervalued, but growth may be more subdued in coming years then it has been previously.
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Yeah, report still reads quite well apart from profit coming in a little low and cash flow struggling, but I think the cashflow will be stronger in coming periods. They have done alot this year remember. The next 2 years could reap the benefits...time will tell..but for now definitely worth holding IMO...
 
What makes this more interesting is that MCE was tipped as one of the few that would surprise to the upside this reporting season.

I'll continue to hold for reasons mentioned above as I believe a lot of companies aren't fairly valued at the moment due to the widespread economic situations. Being 24 years old means i don't have to stress about selling these anytime soon and hopefully they can move back towards their highs in the medium term.
 
Looks like MCE has copped a bit of a battering this morning down under 5 dollars.

I bought at 4 and 5 dollars last year.

Looks like I should have sold when it hit 9 but I didn't want to pay the large capital gains tax.

I still think the long term prospects are good as the price of oil is only going up in the long term.
 
kermit345 said:
What makes this more interesting is that MCE was tipped as one of the few that would surprise to the upside this reporting season.

I'll continue to hold for reasons mentioned above as I believe a lot of companies aren't fairly valued at the moment due to the widespread economic situations. Being 24 years old means i don't have to stress about selling these anytime soon and hopefully they can move back towards their highs in the medium term.
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Bottom line, MCE is still a great business..if your confident in future cash flow streams - then just sit back and watch the dividends rise...
 
It's had a great Roger rally since he mentioned it on sky news. Has a bit of support around the $5 area. Will be interesting to see what happens tomorrow morning. When most people will have seen the news.
 
I'm still working my way through the report, but I find it interesting that MCE is forecasting just a 20% growth in revenues next financial year. That seems on the low side for me.
 
McCoy Pauley said:
I'm still working my way through the report, but I find it interesting that MCE is forecasting just a 20% growth in revenues next financial year. That seems on the low side for me.
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MCE is a great business but it is in a very niche market.

DRBM accounts for 84% of their revenue and is constrained by the overall industry size. They already have 1/3 of the industry and they are 1 of 3 players. They will need an extrodinary effort to grow at above industry rates at the demise of their competitors.

The other segments are only small and so they can't grow those fast enough to sustain historical growth rate.

The 2nd half numbers were terrible compared to the first half.

Revenue: HY $92.4m, FY $183.7m. H2 = $91.3m (-1.2% Half-on-half)
NPAT: HY $19.25m, FY $33.6m. H2 = $14.35m (-25%)

May be they saw the good first half numbers and took the opportunity to brought forward some expenses. EPS (~44c) is basically flat compared to last year thanks to the well timed capital raising. If they do grow revenue by 20% I think current price is probably around fair level, with PE ~11.5.
 
skc said:
DRBM accounts for 84% of their revenue and is constrained by the overall industry size. They already have 1/3 of the industry and they are 1 of 3 players. They will need an extrodinary effort to grow at above industry rates at the demise of their competitors.
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I agree with you, but on the upside the size of the market and lack of participants has shielded them from the margin pressure some of the other mining services companies have experienced. Assuming they can grow revenue at 20% and maintain their margins I have a value of ~$6.50-$7.00 for FY12.
 
skc said:
The 2nd half numbers were terrible compared to the first half.

Revenue: HY $92.4m, FY $183.7m. H2 = $91.3m (-1.2% Half-on-half)
NPAT: HY $19.25m, FY $33.6m. H2 = $14.35m (-25%)

May be they saw the good first half numbers and took the opportunity to brought forward some expenses. EPS (~44c) is basically flat compared to last year thanks to the well timed capital raising. If they do grow revenue by 20% I think current price is probably around fair level, with PE ~11.5.
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Didn't expect another 10% fall on top of yesterday's rout even though the market is rough as anything today.

Market is pricing in some pretty terrible outlook. PE of this year now 9.6. If forward PE is 12, the market things EPS is only 35c. Considering their H2 profits was only 19c, may be that's not at all unfair.

Tried a swing trade today and only managed to net 6c lol.

P.S. Down -12% now :eek:
 
Oil rig industry is cyclical, doesn't take much effort, can even be done just by reading MCEs report, to see where we are in the cycle. Patient investing will pay off with this one...
Additionally. the P&L statement included some expenses (~$5mil) from the new plant...so it could have been a better result without that included..
 

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