This company is very asset rich (industrial property),the recent and medium term charts are now excellent and trading could not get any worse than last year in that they are moving a lot of production to low cost Eastern Europe and moving away from their total dependence on tabacco machinery.

IC's Simon T. today - A share ready to smoke

Investors are playing a waiting game at specialist engineer Molins

(MLIN: 165p) and I am happy to bid my time too.

To recap, around 60 per cent of sales come from the tobacco industry, where Molins specialises in improving the effectiveness of existing customer plant, monitoring and testing product quality and conducting the analysis of cigarette smoke. This is the high-end part of the business, accounting for a quarter of revenues, and a likely source of some exciting news if, as expected, Molins' tobacco testing business, Arista Laboratories, receives a boost in demand for its services resulting from tighter US regulations that are expected to be implemented by the Food & Drug Administration (FDA).

The US regulator has already heard representations from cigarette manufacturers in advance of issuing guidance on testing requirements with a view to tightening up the testing regime for harmful compounds found in tobacco smoke. The new regulations were scheduled to be published in April, but have been delayed and the latest indication from the FDA is that guidance will be published in December. This largely explains why Molins' shares have been trading sideways since February, having enjoyed a bumper performance in the previous 12 months after I included them in my 2012 Bargain Share Portfolio.

True, the timescale and nature of the FDA testing regime is uncertain, but what is not in doubt is that Molins is well-placed to capitalise on the opportunities, especially as Arista has a significant logistical and marketing advantage to attract new business for its onshore US testing services. The unit is fully operational from its new laboratory facility in Richmond, Virginia, where it services all the tobacco industry's tobacco and smoke testing requirements, and from where non-tobacco testing will be carried out as the business extends its activities into other end markets.

Analyst Michael O'Brien at broking house Canaccord Genuity believes that several major tobacco manufacturers, which currently do the testing of these compounds in-house, will have to outsource much of it in future if the FDA dramatically expands the number of harmful compounds on its consultation list. In my view, any forthcoming FDA-related newsflow will be a key share price driver for Molins if, as expected, the regulator does extend the list of harmful compounds that tobacco companies need to test. It would also prompt analysts to upgrade their earnings estimates for future years.


Lowly valued

But even without upside from a change in US legislation, Molins is performing well enough if last week's half-year results are anything to go on. In fact, the company grew sales by 20 per cent to £47.8m and almost doubled underlying pre-tax profits from £0.8m to £1.5m. For the full year, Canaccord forecasts that Molins will raise operating profits by 10 per cent to £5.5m, mainly reflecting the heavy second-half bias to the reported numbers. Guidance from the company's management is that the business is trading in line with these forecasts.

True, a higher tax charge means underlying EPS is likely to flat at 22p, but this is unlikely to hold back the dividend, which is expected to rise to 5.7p a share, having been raised from 5.3p to 5.5p last year. On that basis, the shares trade on a miserly 7.5 times forward earnings and yield around 3.3 per cent. That is a pretty attractive rating, which becomes even more compelling once you consider that Molins had net funds of £5.6m, worth 28p a share, at the end of June. Strip this cash out from the share price and the multiple drops to a bargain basement six times earnings. For good measure, the shares trade on a hefty 25 per cent discount to net asset value of 211p.


Positive technical set up

The technical set-up is certainly supportive of another leg up in the company's share price and a rally back to the August 2007 bull market high around 220p. The 14-day relative strength index (RSI) is neutral after a modest pull-back from the mid-July high of 177p, and the price is not overextended, trading just above the 200-day moving average around 159p. Interestingly, the long-term trend line has acted as support for the share price for the past couple of years and each time it has been tested has been the precursor to a major rally. There is little to expect any difference this time around.

Needless to say, I remain a buyer of Molins' shares on a bargain basement six times this year's earnings estimates net of cash. My target price remains 220p - equating to 8.7 times earnings estimates net of cash - which I feel could be achieved by the year-end assuming of course the FDA releases its guidance by then. Offering 33 per cent potential upside to my target price, I continue to rate Molins' shares a value buy on a bid-offer spread of 163p to 165p.

Starting to stir.

Interim Management Statement

RNS


RNS Number : 2544R

Molins PLC

24 October 2013







24 October 2013



MOLINS PLC

INTERIM MANAGEMENT STATEMENT



Molins PLC, the international engineering and services company, today announces its interim management statement covering the period from 1 July 2013 to 23 October 2013. The Company's Half-Year results to 30 June 2013 were announced on 29 August 2013.

Order intake and sales in the period were broadly as expected and in the year to date remain ahead of last year. Performance in the period was also broadly in line with expectations.

Each of the three divisions has an order book that supports the anticipated level of sales in the fourth quarter and the board's expectation of Group performance for the year as a whole remains unchanged.

There has been no significant change in the financial position of the Group since 30 June 2013.

Sure looks that way..

Thanks mitzy. IC Simon has a 220p target price.

Simon T in IC today has a target price of 220p.

Final Results

RNS


RNS Number : 9311A

Molins PLC

26 February 2014








26 February 2014 FOR IMMEDIATE RELEASE





Molins PLC

Preliminary Announcement for the twelve months ended 31 December 2013



Molins PLC, the international specialist technology and services group, announces its results for the twelve months ended 31 December 2013.







Group Highlights

· Sales increase of 13% to £105.2m (2012: £93.0m)

· Underlying profit before tax increase of 10% to £5.4m (2012: £4.9m)

· Underlying earnings per share increase of 10% to 23.9p (2012: 21.8p)

· Net funds of £5.2m

· Maintained full year ordinary dividend of 5.5p per share



Commenting on the performance and outlook Dick Hunter, Chief Executive, said:

"I am pleased to report a strong performance for the Group over the year, with sales growth achieved across all three of our divisions, leading to an increase in profits. Our ability to provide products and services that meet the specific needs of our customers, across a range of markets, has helped to consolidate Molins' established position.

"We remain mindful of the uncertain economic and regulatory environment, but are confident the Group will continue to demonstrate progress on its various growth initiatives, and through acquisition."



Divisional Highlights

Scientific Services

· Increase in sales of 15% with strong growth at Cerulean

· Cerulean delivered its strongest annual performance and maintained its market leading position

· Sales at Arista Laboratories lower than the prior year, as a regulatory regime for the testing of tobacco products in the USA has yet to be confirmed



Packaging Machinery

· Increase in sales of 14%, with increased demand in Europe

· Development of sales and service organisation in Asia to support customers' growth plans

· Molins Technologies (ITCM) delivered robust sales growth and improved profitability



Tobacco Machinery

· Increase in sales of 11%, leading to improved profitability

· Benefited from meeting the challenging service and delivery requirements of customers

· Ongoing investment in new and enhanced products

Edison - Recent share price weakness stemming from the delayed introduction of a
new regulatory regime for tobacco products in the US has been reversed
following strong 2013 results. The shares look undervalued on the
performance of the group’s engineering businesses alone; the mediumterm
potential from Scientific Services adds significantly to the potential.

LISTEN: Dick Hunter, Chief Executive of Molins, discusses the preliminary results for the international specialist technology and services group

Click here to listen

Seems they've just finished their AGM and need to tell us 20 times ( 20-RNS -DYOR), so someone at head office must still have their finger on the Button. Oh deary, and the sp has dropped recently from about 80p to more recently =abt. 60p.
I guess fewer ciggys are needed - and the machines to make 'em.