Listed on AIM July 2005 raising 2 million for aquisitions, debt payments and general working capital. Waterline Ltd is a one-stop kitchen shop for retailers and builders.

Long history as a profitable business since 1985 and charts suggest we've hit the bottom.

www.waterline.co.uk
www.danielstewart.co.uk for the prospectus

Major Shareholders

Michael Lawrence 56.6%
Frank Tiller 24.3%
Rathbone Investments 9.1%
New Star Asset 3.3%

Leaves less than 1 million shares in free float. Tightly held.

Sales growth is maturing and margins are holding steady at around 23%. Company has enough spare cash to start a dividend policy which i expect to be announced with their maiden results.

BUT perhaps most importantly there were some very large director buys on March 20.

Apparently Luke Heron of watshot.com reiterated the "buy" rating yesterday.

Expecting 7.3p EPS at results, which then becomes historic.

Expecting current year EPS to be over 12p.

Therefore, by his estimation, WTL is on a current year (as its already under way from April 1st) PER of just over times 5.

Post from AFN :


doubleorquits - 7 Jun'07 - 12:33 - 379 of 379

It is actually a good article because it highlights how cheap these are even after the downgrades and integration costs. A nice read - especially as they see significant upside in SP which concurs with my view. Put them on a PE of 10 even and 1 is easily possible.


Shares of this kitchen specialist might have floated at 84p in July 2005 but they have yet to take the market by storm. However house broker Daniel Stewart has a price target of 110p some 70% above the current share price of 64.5p.
Since it was floated the group has enjoyed strong sales growth.

Following the groups last trading update, Daniel Stewart forecast that
2006-07 turnover would be 85.1 million compared with 74.8 million in the
previous year.

Although sales growth was strong the groups acquisition of Coolectric,
the exclusive UK importer of Liebhorr premium domestic and commercial
refrigeration, has involved substantial integration costs which hit last
years profits. These issues are, however, of a one-off nature which should
not impinge dramatically on the groups 2007-08 profits.

The acquisition of BDD, a Scottish kitchen distributor, has been very
successful. Apart from eliminating a competitor and increasing the
groups exposure to the Scottish market, it strengthened its relationship
with Franke, the worlds largest sink manufacturer. The acquisition also
increased the groups expertise in the contract sector- BDD was mainly
a contract operation while Waterline concentrated historically on the
retail market. Although Waterline would not be immune to any
deterioration in the housing market most of its business is in
refurbishment. It has experience of previous cycles and believes that it
would be able to use any downturn in the market to acquire smaller
competitors. Meanwhile its emphasis on quality and service should
ensure that its market share grows as customers continue to desert less
reliable operators. Daniel Stewart is forecasting 2006-07 earnings of 7.3p
rising to 10.3p. These forecasts provide the scope for significant upside
in the share price.

My post from AFN :




PapalPower - 12 Jun'07 - 08:32 - 384 of 384

I have found the http://www.watshot.com article which was posted elsehwere, here it is, from a week or so back :

Waterline* (WTL)
Waterline continues to be a frustration for me, but its presence in the WatsHot portfolio remains welcome. Whatever way I look at this company, the shares still appear cheap to me. Trading will be difficult in the near term, but this is a solid company with good management that will respond to the way its market moves in the right way. The company only recently reiterated that pre-tax profits for the year to 31st March 2007 would come in at around 1.8 million. After one-off costs this should lead to earnings of 7.3p per share, funding a total dividend payout of 3p. For the current year, profits should be back on the up tick, though whether they hit my projected 3.1 million is largely out of the company's hands. The market will dictate growth in the current year. Still, it remains my contention that earnings will hit 12.5p per share this year.
At 66.5p, the shares trade on a historical (but as yet not reported) multiple of just 9.1, falling to 5.3 for this year. I think this is very attractive indeed. At 66.5p, barring any disasters, I expect the shares to run higher in the run up to results being reported. "Buy".

News should be just around the corner, lets see what it brings.........

Quite a grim set of results :

http://www.investegate.co.uk/Article.aspx?id=200707050924557090Z

RNS Number:7090Z
Waterline Group plc
05 July 2007




Waterline Group plc

("Waterline" or "the Group")

Results to 31 March 2007

Financial and corporate highlights for the year ended 31 March 2007

_______________________________________________________________


The Board of Waterline Group Plc ("Waterline" or the "Group") one of the larger
suppliers to the fitted kitchen industry in the UK, announces its results for
the twelve month period to 31 March 2007, where it reports turnover, profit
before tax, basic EPS and net assets per share.



Financial Highlights


* Turnover up to #83.7m
* Profit before tax #1.7m (excluding one off costs #0.8m)
* Basic EPS down 56 per cent to 2.54p
* Net assets per share down by 0.5 per cent to 56.0p
* Net debt reduced from #4.2m to #4.1m
* No proposed dividend payment for the year
* Current trading remains challenging



Corporate Highlights


*Successful integration of Coolectric now completed
*Acquisition of Brian Donaldson Distribution on 1 October 2007
*Substantial investment in logistics operation
*Completion of the re-structuring of the Operating Board
*"Blue Book 14" the industry reference book to be launched in July 2007