Torday & Carlisle - More in the pipeline

Just spent the last while pouring over the full year and interim results in 2002, 03, 04 and have concluded the following.

1. 2003 was Ewoods record profit year at 2.95M. In that year the 2nd half was much stronger than the first.

2. In the 2005 interim Ewood was congratulated on record 1st half year profits of 1.51M.

3. The announcement yesterday stated that Ewood was continuning its strong performance or words to that effect. The financial year is over at the end of this month so they are talking definitively.

4. Accordingly we could expect to see record profits at Ewood for 2005 of £3M or just over.

5. The results that will be announced in March 06 will show this but will also have trading losses from Solvitol in 2005 and the write off of 0.9M in assets. However the true underlying valuation will be the multiple of £3M.

Therefore on a growing company by turnover, with niche products, with increasing capacity (new facility being built) and a track record of delivery of strong profits then this could easily be on a multiple of 12 times EBITDA valuation. Which on 12 million shares would be circa £3 each per share.

Moreover the debt at Nov of 3.8M would be cancelled in terms of calculation by the sale proceeds of Solvitol over the next 18 months - the proceeds of which have been secured by mortgages.

The head office costs would have a reducing effect on this of course but we truely are now looking at a range of £2.50 to £3