AIM:SIXH

Stock Analysis Report

Executive Summary

The 600 Group PLC designs, manufactures, and distributes machine tools, precision engineered components, and industrial laser systems in the United Kingdom, the United States, Europe, and internationally.

Rewards

Trading at 59.1% below its fair value

Earnings are forecast to grow 9.24% per year

Earnings grew by 249.1% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Highly volatile share price over past 3 months

Does not have a meaningful market cap (£17M)



Snowflake Analysis

Very undervalued with solid track record.

Share Price & News

How has 600 Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SIXH's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.4%

SIXH

1.4%

GB Machinery

1.4%

GB Market


1 Year Return

0.7%

SIXH

18.7%

GB Machinery

12.4%

GB Market

Return vs Industry: SIXH underperformed the UK Machinery industry which returned 20.7% over the past year.

Return vs Market: SIXH underperformed the UK Market which returned 12.7% over the past year.


Shareholder returns

SIXHIndustryMarket
7 Day2.4%1.4%1.4%
30 Day3.8%-1.5%2.3%
90 Day-10.8%17.4%8.8%
1 Year4.9%0.7%22.2%18.7%18.3%12.4%
3 Year65.3%52.3%32.8%22.6%23.8%8.0%
5 Year2.4%-5.7%55.7%33.9%41.8%8.9%

Price Volatility Vs. Market

How volatile is 600 Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is 600 Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SIXH (£0.15) is trading below our estimate of fair value (£0.36)

Significantly Below Fair Value: SIXH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SIXH is good value based on its PE Ratio (5.1x) compared to the Machinery industry average (18.8x).

PE vs Market: SIXH is good value based on its PE Ratio (5.1x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: SIXH is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: SIXH is good value based on its PB Ratio (0.7x) compared to the GB Machinery industry average (1.8x).


Next Steps

Future Growth

How is 600 Group forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

9.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SIXH's forecast earnings growth (9.2% per year) is above the savings rate (0.5%).

Earnings vs Market: SIXH's earnings (9.2% per year) are forecast to grow slower than the UK market (11.7% per year).

High Growth Earnings: SIXH's earnings are forecast to grow, but not significantly.

Revenue vs Market: SIXH's revenue (9.7% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: SIXH's revenue (9.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SIXH's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has 600 Group performed over the past 5 years?

1.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SIXH has high quality earnings.

Growing Profit Margin: SIXH's current net profit margins (6.2%) are higher than last year (1.9%).


Past Earnings Growth Analysis

Earnings Trend: SIXH's earnings have grown by 1.3% per year over the past 5 years.

Accelerating Growth: SIXH's earnings growth over the past year (249.1%) exceeds its 5-year average (1.3% per year).

Earnings vs Industry: SIXH earnings growth over the past year (249.1%) exceeded the Machinery industry 3%.


Return on Equity

High ROE: SIXH's Return on Equity (13.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is 600 Group's financial position?


Financial Position Analysis

Short Term Liabilities: SIXH's short term assets ($36.7M) exceed its short term liabilities ($18.6M).

Long Term Liabilities: SIXH's short term assets ($36.7M) exceed its long term liabilities ($22.5M).


Debt to Equity History and Analysis

Debt Level: SIXH's debt to equity ratio (62.3%) is considered high.

Reducing Debt: SIXH's debt to equity ratio has increased from 33.8% to 62.3% over the past 5 years.

Debt Coverage: SIXH's debt is not well covered by operating cash flow (10.4%).

Interest Coverage: SIXH's interest payments on its debt are well covered by EBIT (3.7x coverage).


Balance Sheet

Inventory Level: SIXH has a high level of physical assets or inventory.

Debt Coverage by Assets: SIXH's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

What is 600 Group's current dividend yield, its reliability and sustainability?

6.24%

Current Dividend Yield


Dividend Yield vs Market

company6.2%marketbottom25%1.8%markettop25%5.0%industryaverage2.5%forecastin3Years6.1%

Current dividend yield vs market & industry

Notable Dividend: SIXH's dividend (6.25%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: SIXH's dividend (6.25%) is in the top 25% of dividend payers in the UK market (4.95%)


Stability and Growth of Payments

Stable Dividend: Too early to tell whether SIXH's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if SIXH's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (25.5%), SIXH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of 600 Group's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

600 Group has no CEO, or we have no data on them.


Management Age and Tenure

2.8yrs

Average Tenure

Experienced Management: SIXH's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

8.3yrs

Average Tenure

68yo

Average Age

Experienced Board: SIXH's board of directors are considered experienced (8.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Paul Dupee (75yo)

    Executive Chairman

    • Tenure: 8.3yrs
    • Compensation: US$420.00k
  • Neil Carrick (57yo)

    Group Finance Director

    • Tenure: 8.3yrs
    • Compensation: US$405.33k
  • David Richardson

    Managing Director of Machine Tools Division

    • David Grimes

      Chief Technology Officer

      • Tenure: 0.8yrs
    • Don Haselton

      Managing Director of Development

      • Tenure: 4.4yrs
    • Terry Allison

      Chief Operating Officer

      • Tenure: 1.2yrs

    Board Members

    • Paul Dupee (75yo)

      Executive Chairman

      • Tenure: 8.3yrs
      • Compensation: US$420.00k
    • Stephen Fiamma (66yo)

      Non-Executive Director

      • Tenure: 4.7yrs
      • Compensation: US$46.20k
    • Neil Carrick (57yo)

      Group Finance Director

      • Tenure: 8.3yrs
      • Compensation: US$405.33k
    • Derek Zissman (75yo)

      Senior Non-Executive Director

      • Compensation: US$43.23k
    • Stephen Rutherford (68yo)

      Non-Executive Director

      • Tenure: 12.3yrs
      • Compensation: US$43.23k

    Company Information

    The 600 Group PLC's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: The 600 Group PLC
    • Ticker: SIXH
    • Exchange: AIM
    • Founded: 1932
    • Industry: Industrial Machinery
    • Sector: Capital Goods
    • Market Cap: UK£17.445m
    • Shares outstanding: 117.47m
    • Website: https://www.600group.com

    Number of Employees


    Location

    • The 600 Group PLC
    • Lowfields Way
    • Lowfield Business Park
    • Elland
    • West Yorkshire
    • HX5 9DA
    • United Kingdom

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    SIXHAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJan 1992

    Biography

    The 600 Group PLC designs, manufactures, and distributes machine tools, precision engineered components, and industrial laser systems in the United Kingdom, the United States, Europe, and internationally. It operates through two segments, Machine Tools and Precision Engineered Components; and Industrial Laser Systems. It offers machine tools, including center, manual/CNC combination, and CNC lathes, as well as CNC turning centers, saws, drills, milling machines, and grinding machines. The company provides its machine tools under the Colchester, Harrison, and Clausing brand names. It also offers precision engineered components that comprise work holding chucks under the Pratt Burnerd brand name; taper roller bearings under the Gamet Bearings brand name; and machine tool spares. In addition, the company provides industrial laser marking systems under the TYKMA Electrox brand name. The 600 Group PLC was founded in 1932 and is headquartered in Elland, the United Kingdom. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/17 20:34
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/28
    Annual Earnings2019/03/30


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.