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TITAN EUROPE (TSW) – delay with the results doesn’t exactly instill confidence
Posted 06/05/09
With shares in Cape (AIM:CIU), the AIM quoted industrial support services group having had a great run of late I thought it was worth visiting another debt laden friend, Titan Europe (AIM:TSW), the manufacturer of steel wheels and undercarriages for the off-highway vehicles industry.
Much like Cape, Titan Europe is a substantial, essentially ‘old economy’, business which has seen its share price decimated over the past 18 months. The group generated revenue of £386m for the previous financial year ending 31st December 2007 and previously offered a tasty dividend of 6.50p per share unfortunately the final dividend for 2008 has been cut entirely!
In it’s last trading update on 20th February 2009 the group announced that it anticipated announcing preliminary results for the year ended 31st December 2008 by the end of April 2009. The end of April has now passed and the results have unfortunately still not appeared – could this be the sign of some serious financing problems?
The trading statement also said that they anticipate full year 2008 pre-tax pre-exceptional profits to be in-line with market expectations (eps approx 16.2p – hard to believe?) with total revenues expected to be around £450m.
They have also already alluded to their prospects for the financial year ending 31 December 2009 commenting on the limited forward visibility for 2009.
We commented back in March 2009 when the shares were standing at 14.25p how they warranted further attention and since then they have risen to the lofty heights of 26p. Not a bad rise but still someway short of their historical high of c251p which was reached back in January 2007 when Titan was actually a lot smaller, though more profitable, business than it is now.
The position of new 29.9% shareholder Mefro Wheels, a family-owned German automotive and wheels group, remains very interesting.
I note that one chartist has commented how bearish the price chart has started look, however, I’m not quite sure how realistic it is to try and assess price trends in a business with 2 material shareholders each holding more than 20% of the share capital and with irregular trading activity – but what do I know about charts!
Executive management had been material buyers of shares, the last of which were acquired at 15p per share back in December 2008.
To get a better sense of conditions in the off highway market it’s worth having a look at GKN, which has a division supplying into this market, or indeed NYSE listed Titan International, the manufacturer of tyres for the off highway market which announced its results at the end of April in which the Chief Exec commented that ‘Large farm tires and wheels were selling well in the first quarter of 2009, along with Titan’s new super giant mining tires,’ – a positive read across to Titan Europe?
Who knows!
This entry was posted 2 years, 9 months ago and was filed under Titan Europe.
