EKT is having the turn around most companies would like to have at the beginning of the economic recovery.

The change of management and subsequent restructuring has brought the desire effect on the company fortunes, by eliminating loss making business and careful control on cost, they had managed an operating profit on all the three divisions at the Interim stage.

The good news has not finished there, as new products were introduced and were well received and the next stage will be for expansion on the Far East markets on selected niche areas of component distribution.

A 14% reduction on borrowing at a time of restructuring is very significant to the aims of the company for the future.

At 7.125p the shares have plenty of upside from now on, not only from the recovery on profits, but also from the most likely return of dividends at the final and that will be the icing on the cake for the share price.
Update
27th Oct 03 Elektron Employee Benefit Trust buys 300th shares at 6.40p
29th Oct 03 Director Richard Bulgin buys 25K at 7.25p latest

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too right barry, this stock is king of all dogs. I believe the directors are entering it for crufts.. as its a favourite to win. You are wise to sell your holding..... a warning is a very strong possibility.

i sold 50k today. market makers dont want stock. had to accept 0.25p less than what was offered on the screen. Looks like I'm well and truely shafted holding over 2 million of these doggy biscuits !! Still will off load as many as I can.. even though I think the share is ready for a fall very soon.

are you barry bridge ? you'll have massive problems selling such a big amount. If the market makers find out you are consitently dumping stock they will hammer the share to oblivion. Market makers really dont want any stock, max limit today was 10,000. Good luck, you'll need it with such an illiquid share.

sold another 30k today. once more got 0.25p less.

Bought 50,000 at 13.75 the other day and another 30,000 today.

Bargain of the century.

Great tip from Red Hot Penny shares...

READ THIS
The Japanese, you will recall, were very good at borrowing the inventions of others and manufacturing quality products in very high volumes. And down in the unglamorous setting of East Molesey, I discovered a great little British company that is doing very much the same thing.

How do the following innovations sound to you? An iron that turns itself off if it has not been moved from the horizontal position for 20 seconds. A washing machine that recognises the contents of the wash and automatically sets the correct programme. A cooker hood that switches itself on when it smells fumes...

These are just some of the products that are coming our way. And they are made possible by the prevalence and affordability of the type of electronic and electromechanical components that I watched being churned out in huge numbers at the south west London factory of Arcoelectric.

Unknown in the Square Mile... just the way I like it

Along with Bulgin Components, another business that can trace its history back to the 1930s, Arcoelectric is now owned by Elektron, and run by its executive chairman, Adrian Girling. Girling, 54, could, I am sure, be in charge of a much larger company. He is an Oxford graduate, a Chartered Engineer and a Fellow of the Institute of Electrical Engineers. He is also a highly experienced businessman, having worked all over the world for the likes of ITT, Marconi and Spirent. He is an enthusiast for the manufacturing industry - but is frustrated, too. "Last year was hard work," he reported in May's results statement, "but great fun."

But he complained: "There are companies who do not have the channels to market enjoyed by Bulgin and Arcoelectric, who lose money, yet are valued at multiples of sales because they claim to have a unique technological business proposition."

That is not a sentence that would win prizes in a literary competition, but it does reveal one thing. Elektron does not employ a PR advisor to smarten up the prose. Which is one reason why it is virtually unknown in the City.

But the City's loss is our gain. Because this is a great story that I will take up at the start of 2003, when Girling's reputation as a fixer of problem businesses saw him dropped into a crisis...

When the going gets tough, this cost-savvy executive chairman gets going

One of Elektron's main subsidiaries was facing liquidation, and this threatened to bring down the whole group. Some swift cost-cutting and the sale or closure of three businesses saved the day, and at the end of the year Girling spotted an opportunity to repeat the trick and give the group some real scale. He bought Arcoelectric from the receiver, in exchange for 352,000 and the assumption of 1,515,000 of lease finance debt.

A property sale and leaseback, which left Andrew Perloff's Panther Securities with 15% of Elektron's equity, and a separate fund raising, put Elektron on a sound footing, and the accounts reveal that Arcoelectric contributed net assets of 2.6m and made sales of 15m last year.

So that was a smart deal and helped Elektron to achieve total sales last year of 22.5m. Elektron produces a very wide range of switches, connectors, battery and fuse holders, indicators and other electro-mechanical components that are sold all around the world. Both Bulgin and Arcoelectric publish large catalogues from which 20% of sales are made, while 45% go directly to OEMs (Original Equipment Manufacturers) and 35% are sold through distributors such as Electrocomponents.

Elektron controls the entire production process, from tooling through to the injection moulding of plastic parts, metal forming, plating and assembly. This ensures consistent quality, quick response times and the ability to make small batches. Every hour Elektron is winding 60,000 miniature springs, some only a millimetre in diameter, and pressing 200,000 contacts and terminals. In all, it manufactures 72m components each year.

This AIM-listed marvel also pays a dividend! Buy today for 75% gains

Not all of these come from East Molesey, or from Bulgin's factory in Barking, Essex. Twenty million and 10m respectively are manufactured in Arcoelectric's factories in Tunisia and Shenzhen. Using what he describes as the "one kitchen, two restaurants" concept, Girling is gradually integrating the production capacity of Bulgin and Arcoelectric, so that orders can be met from either China, North Africa or the UK, depending on logistic costs and delivery schedules.

But he also wants Elektron to become a supplier into the domestic Chinese market. At present the Shenzhen factory can only serve the export market, but it is now being established as a "Wholly Owned Foreign Enterprise", which will permit it to sell into the vast local market.

This should accelerate the growth of sales, which was a modest 3% last year, and boost Elektron's share of what is a massive market. Global sales of switches are worth $3.8bn per year, while for connectors the figure is $25bn. Girling reckons that Elektron has about 7%-8% of the market segment that it serves, but is winning share from competitors such as Signal Lux and Molveno in Italy, Germany's Marquardt, Schurter in Switzerland and Defond from China.

Some of this is due to product innovation. Girling does "not believe in breaking new ground with high technology", and the research and development bill is minimal. But by simply using existing technology in imaginative ways, Elektron's product designers have steadily come up with new products - a recent best seller being a waterproof Bluetooth wireless connector.

My visit to Elektron's offices was enough to show me that shareholders' money is not lavished on elegant surroundings, and such tight cost control is one reason why it has bounced back from the 6m of losses run up in the two years ending 31 January 2003 to record a 0.5m pre-tax profit in 2003/4, rising to 1.5m in 2004/5 and 1.8m last year. Even more impressive was the 20% increase in shareholders' funds last year (now worth 8.3p per share) and the cash generation that saw Elektron finish the year with net cash of 443,000 and leave it poised for expansion.

RHPS Verdict: In May Elektron reported a 15% year-on-year increase in its order book, and hinted that it might make an acquisition this year. Given the successful turnaround of Bulgin and Arcoelectric, a similar move would surely be well received. Shares in this financially sound, profitable, dividend-paying and growing business trade on below eight times last year's earnings. This is ridiculous and I am setting a price target of 25p. BUY.

Finished up over 15% up in a bad market looks good.

Been a lot of buying recently over 1% traded yesterday,

Net assets have climbed considrably from 0.70p 3 years ago to 8.3p now!

Bue sky again the tip above will drive the sp forward.

Rumour of early results and possible acquistion pushed EKT up 10% this way. Still at 17.5p to buy its well short of Red Hot Penny shares target of 25p.

EKT is likely to show a minimum upside of 50% from here. The co is set to draw in more cost savings of circa 900,000 next year.

If one allows for the fact EKT mad just short of 1.8 million lasy year thats just 50%.

With potential sales increase as well the upside could be higher.

The co has hinted at 2 acquisitions as well soon.

Looks like things are starting to take off here :-)

Ekt breaks out today and the sp could rise fast from here as cost cuts will boost profits btween 50% and 100%.

EKT broker note... predicts a dire outlook. doesnt mate good reading.

can be downloaded from here :

http://freefilehosting.net/download/422ij

gives an idea of the current trends in the sector. House Broker has downgraded the price target from 16p to 12p.

Highlights :

Outlook and Valuation. The order book is currently 5.5m or 0.9m softer
than at this time last year. We have therefore trimmed our sales forecasts for FY10 and FY11 to reflect these deteriorating conditions. In light of this and recent macro economic events, we reduce our fair value estimate from 16p to 12p or 6.6x our FY10 EPS estimate of 1.83p.
===============

2008 EPS 2.77p
2009 EPS 0.96p ............... -65% from 2008
2010 EPS 1.85p................ -33% from 2008
2011 EPS 2.27p................ -18% from 2008

So even looking out to 3 years on.... EPS will be LOWER than what it achieved this year.

=============

page 2 :

we do note that the average PER for the group has decreased from
7.35x to 5.48x and we are therefore compelled to reduce our fair value estimate on this basis.

we accept that electronic manufacturing and consumer electronic end markets are suffering under the current global economic crisis and finding sources of funding to acquire companies have and will continue to be a challenge over the near-term. Therefore, we expect management to focus on improving operations in both the UK and overseas and do not expect any significant acquisitions for the rest of this calendar year.


Given the current macro economic climate and the specific risk of
Elektron delivering its business plan to acquire and relocate
manufacturing operations to China and Tunisia, we reduce our fair
value estimate to 12p (Old; 16p) or 6.6x our FY10 EPS estimate of
1.83p.

HOUSE BROKER DOWNGRADES ELEKTRON

5,000,000 IN DEBT

GOING BUST SOON !!


LATEST BROKER NOTE HERE.... MAKES DIRE READING :

http://freefilehosting.net/download/422ij

Yep slowly but surely going bust !!

I have watched this since Keith Roy joined as non exec in 2008 after 30 years with Halma, a particularly rewarding investment for me over last 30 years ( and still doing OK!). Interesting set of half year figures today. Sales down 27% but gross margins up, cash has been generated from operations and balance sheet in reasonable shape. Sales drop not wholly unexpected as previous comments suggested they were slowly moving into better margin business. Nothing wrong imo with the "Sales are vanity, Profits are sanity and Cash is king philosophy" which they seem to be applying. Nevertheless, EKT is working hard to stand still.They do not appear to be going backwards, however and prospects improving in some of their markets. Although definitely not for widows and orphans, I have dipped a toe in - always DYOR

Bit of a co-incidence, but on the day of the EKT results Hartest Holdings (HTH) announce possible takeover this afternoon -at initial offer 50p. EKT owns approx 23% of HTH and was itself involved in abortive talks with them earlier this year (at price 25p). If the deal does proceed, however, should a nice little boost to the second half profits of EKT - reading of exceptional gains makes a pleasant change from the more usual exceptional losses these days and the cash will be useful.

Bit of movement today, although very illiquid. Could be that the bid for HTH is nearing its conclusion (Delta Controls earlier indicative offer raised from 50p to 61p) - takeover panel deadline for "put up or shut up" is end of this month. Would be a nice boost for EKT if it did happen, as they have struggled in own trading last couple of years.

Breaking out on the 15 month