As expected a stellar financial year for Multi-Chem. Business is chugging along nicely. Revenue has been flat but profits remain robust. EPS this last quarter being boosted by forex gains of ~1m from USD going up and 1.4m or reversal of doubtful debt allowances.EPS for FY16 was 10.8c. A big dividend of 3.3c has also been announced. This brings payout ratio to 40% which is nothing to shout about but fair.
Of note,
1) debts have been halved pretty quickly from 22m+ down to 11.5m now. The company will be able to go debt free at anytime.
2) A recent sale of factory land in China for 8.3m should bring cash to 58m+ and net cash to market cap to 65%. Though this sale was only slightly profitable and NAV will not be getting a boost, it is good to see Mgt. might be looking to slowly exit this business, which is not contributing much at this point, and focus more on the new core business.
3) The recent insider buy in @ 52c after 3Q results last year shows that mgt. already knows good results were on the way.
The share price has reacted accordingly after this results release. Since covering this stock at 52c, price has moved up to 78c at close yesterday. Though on not much volume. Given that top insider ownership is pretty high, this is to be expected. IMHO it is very possible a privatisation could be on the way.
[author holds shares in this company]
