Brook Crompton, former known as Lindeteves-Jacoberg, registered its first losses in 2003 since listing in 1996. A wrong acquisition of business with debt, en-coupled with slowing European growth, sent Lindeteves-Jacoberg spiral downwards, from a yearly profit of S$20 over million to a yearly loss of more than S$30 million in 2006 to 2008. Its NTA has decreased from $14 to negative $3.20.
With continual support from ATB, largest shareholder, Lindeteves-Jacoberg was able to pull through.
Things took a further plunge when ATB went into liquidation. The new shareholder, Wolong continued to support Lindeteves-jacoberg, with a S$16 million loan, payable for 5 years till 2016.
We have to give the management credit for bringing Brook Crompton back on track after a decade of rebuilding. Brook has sold away its manufacturing facilities to offset its debt. Now Brook focus on its strong branding with the distribution of automotive parts.
In the last 5 years, Brook has achieved positive cash flow from operations, recovering its NTA to S$0.77 as of FY2016. Currently, cash position of S$8.68 million($0.25 cash per share ) with no long term debt.
At $0.61, as of FY2016, EPS $0.122 or 4.98x PE ratio, which is getting cheaper by the year.
This is a weird case. I attribute the poor performance in the past decade for this. Once a market darling, from a SGX component share to a penny stock over just 1 decade. Many investors feared and stayed out.
With a dividend of 2cts in FY2016, i believe the dividend will continue in the coming years. With the re-payment of S$16 million loan, the company is set to free up its finance obligation, and start to reward its shareholders.
Personally, i think Brook is a GEM in this market.
I will value it at least 10x PE ratio or $1.22 as my price target.
* disclaimer: i am invested in Brook.
With continual support from ATB, largest shareholder, Lindeteves-Jacoberg was able to pull through.
Things took a further plunge when ATB went into liquidation. The new shareholder, Wolong continued to support Lindeteves-jacoberg, with a S$16 million loan, payable for 5 years till 2016.
We have to give the management credit for bringing Brook Crompton back on track after a decade of rebuilding. Brook has sold away its manufacturing facilities to offset its debt. Now Brook focus on its strong branding with the distribution of automotive parts.
In the last 5 years, Brook has achieved positive cash flow from operations, recovering its NTA to S$0.77 as of FY2016. Currently, cash position of S$8.68 million($0.25 cash per share ) with no long term debt.
At $0.61, as of FY2016, EPS $0.122 or 4.98x PE ratio, which is getting cheaper by the year.
This is a weird case. I attribute the poor performance in the past decade for this. Once a market darling, from a SGX component share to a penny stock over just 1 decade. Many investors feared and stayed out.
With a dividend of 2cts in FY2016, i believe the dividend will continue in the coming years. With the re-payment of S$16 million loan, the company is set to free up its finance obligation, and start to reward its shareholders.
Personally, i think Brook is a GEM in this market.
I will value it at least 10x PE ratio or $1.22 as my price target.
* disclaimer: i am invested in Brook.
| FY2014 | FY2015 | FY2016 | |
|---|---|---|---|
| EPS (in dollars) | -$0.46 | $0.097 | $0.122 |
| PE ratio | NA | 6.28x | 4.98x |
| NTA | S0.625 | $0.72 | $0.77 |
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