Credit Crunch hits Raymarine

I saw this today on an investment website. an effect of the credit crunch, Raymarine's share price down 65% today, if this is a trend amongst sailing asscoiated companies it doesn't bode well for the sailing industry in the few year.
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Britain's Raymarine Plc, which makes navigation equipment for the marine market, warned its full-year results will be significantly below the lower end of analysts' expectations, citing a rapid decline in its markets.

Raymarine shares plunged more than 52 percent after the news.

Order intake and sales during October to date have both been substantially below the company's estimates, Raymarine said in a statement on Thursday.

Analysts on average are expecting the company to post pretax profit of 22.9 million pounds on revenue of 142.5 million for the year ending Dec. 31, according to Reuters Estimates.

There have been indications by boat builders around the world that they will be building significantly fewer boats both this year and in 2009, Raymarine said.

"Raymarine's sales through other channels have also experienced a sudden slow down," the company said, adding that it was looking to cut costs.

The company also plans to conclude the talks with its banking syndicate to extend or refinance the existing borrowing facility before it reports its full-year results.

At 0716 GMT, shares of the company were trading at 30 pence on the London Stock Exchange.

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Somewhat pessimistic, if you look at their numbers then generally they're seeming to still be trading ok unless sales fell off a cliff in H2'09. However couple of issues

1) Obviously discounted to get sales - in '08 GP os 48% of revenue in 09 (1/2 years) then it's 40% which shows the market is pretty ugly (ooh surprise!)

2) The elephant is the 90m debt that the banks will want re-paid and is due for end of March 2010.

There is a statement re possible offer. At the moment someone like Charles Dunstone could buy the business with his spare change, but he'd have to persuade the banks to take a bath. Provided one could persuade the banks to accept 20p in the £1 then doing a pre-pack and picking up the pieces might be quite a good bet if you reckoned the UK economy (and thus boat sales) would pickup in the next year or two.

I'm sure the products there making are still good, it's just they borrowed lots of money to get there and the city doesn't reckon they'll be able to pay it back or arrange new finance come the end of the Financial Year.

Good luck to all the employees.

 

Surely the groups problems come from the acquisitions of distributorships in 2008 and earlier, spending money just as the world was entering a recession was in heindsight not a brilliant idea.

I researched into Raymarine a few months ago with a view to making a small investment in their shares (bit of a gamble was maybe on the cards) sufficient to say I didn't invest, and today sit quite happy I didn't.

In Q2 of last year Raymarine shares were trading at well over £3.00, today at close they stand at just over 1.6 pence. There has been no value for shareholders here for some time, and the board have stated so several times this year already. The big hope was a Garmin buyout that was finally declared a non runner on Friday, after the stock market closed, an announcement while open would probably have led to share suspension anyway.

Only hope now is a buyer who can convince the banks to accept a % of their debt, small shareholders will probably get nothing, but I guess a few will hold on in hope, and there are usually some investors willing to take a gamble even at these low prices...

 

Surely it would make no difference if you're buying equipment.  The company may be about to suffer a blow but if anything that would entice me more to buy from them.  It's our industry for our sport, so we should help where we can even if it's as little as directing some business their way.