Luxfer Holdings Plc (NYSE: LXFR)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0001096056
Market Cap 413.64 Mn
P/B 2.40
P/E 32.07
P/S 0.98
ROIC (Qtr) 4.29
Div Yield % 3.91
Rev 1y % (Qtr) -6.54
Total Debt (Qtr) 43.30 Mn
Debt/Equity (Qtr) 0.19
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About

Investment thesis

Bull case

  • Strong operating cash flow of 43.90M provides robust 1.01x coverage of total debt 43.30M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 297.10M provides 6.86x coverage of total debt 43.30M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 43.90M provides strong 10.45x coverage of stock compensation 4.20M, indicating sustainable incentive practices.
  • Operating cash flow of 43.90M provides exceptional 12.54x coverage of interest expenses 3.50M, showing strong debt service capability.
  • Robust free cash flow of 36.30M exceeds capital expenditure of 7.60M by 4.78x, indicating strong organic growth funding capability.

Bear case

  • With cash reserves of 8.40M against inventory of 95.10M, the 0.09 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 43.90M provides thin coverage of dividend payments of (14M) with a -3.14 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of 4M provide weak support for R&D spending of 4.20M, which is 0.95x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of 25.30M show weak coverage of depreciation charges of 15.70M, with a 1.61 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 36.30M represents just -1.37x of debt issuance (26.50M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Specialty Industrial Machinery
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GEV GE Vernova Inc. 224.93 Bn 194.57 6.14 0.00 Bn
2 ETN Eaton Corp plc 153.13 Bn 38.99 5.75 11.22 Bn
3 PH Parker-Hannifin Corp 135.87 Bn 165.29 12.09 9.87 Bn
4 EMR Emerson Electric Co 111.68 Bn 47.10 4.65 13.41 Bn
5 ITW Illinois Tool Works Inc 86.68 Bn 28.27 5.40 8.97 Bn
6 CMI Cummins Inc 82.13 Bn 28.89 2.44 7.55 Bn
7 AME Ametek Inc/ 53.79 Bn 36.34 7.27 2.28 Bn
8 ROK Rockwell Automation, Inc 43.80 Bn 44.24 5.11 3.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.22 2.28
EV to Cash from Ops. EV/CFO 15.47 37.14
EV to Debt EV to Debt 10.61 34.39
EV to EBIT EV/EBIT 17.27 27.71
EV to EBITDA EV/EBITDA 9.69 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF 24.57 133.36
EV to Market Cap EV to Market Cap 1.11 1.04
EV to Revenue EV/Rev 1.09 39.88
Price to Book Value [P/B] P/B 2.40 6.22
Price to Earnings [P/E] P/E 32.07 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.02 2.57
Dividend Payout Ratio % Div Payout % (Qtr) 96.30 15.73
Dividend per Basic Share Div per Share (Qtr) 0.52 0.91
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 38.32 82.53
Interest Coverage Int. cover (Qtr) 7.23 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 17.39 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 104.88 118.48
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 19.75 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 41.75 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) 52.41 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) 100.00 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) 58.82 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) 12.04 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 13.21 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.05 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.27 0.10
Cash Ratio Cash Ratio (Qtr) 0.08 3.01
Current Ratio Curr Ratio (Qtr) 1.66 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.19 0.38
Interest Cover Ratio Int Coverage (Qtr) 7.23 12.34
Times Interest Earned Times Interest Earned (Qtr) 7.23 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.30 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) 6.37 -7,413.30
EBT Margin % EBT Margin % (Qtr) 5.49 -9,015.79
Gross Margin % Gross Margin % (Qtr) 22.70 -32.61
Net Profit Margin % Net Margin % (Qtr) 3.60 -7,962.06