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300p‼️
292p recovering strongly
Only down 7.4p now. Today is also the ex-dividend day. The dividend is 2.6p, so the the actual loss is less than 5p. Maybe this will be fully recovered by the end of the day. Who knows.
Decent growth when adjusted for acquisition costs etc. though organic growth isn't that strong. Maybe why the market is punishing the share price this morning?
AndyCompanyZ - because many people are not investors they are gamblers and they want it all and they want it NOW!
A rather brutal open on a decent update I added
Well, I have also took the opportunity to double my holding here. Always buy the the dip. The drop is over done in my own opinion. Should rebound a little or fully recovered given a little time. Because this is not a bad result.
The net debt is the result of buying Murat Ticaret. Only acquired in Sept, so H1 results only show 1 month of revenue gains. Much more at year end. A strong hold for me, in fact added more this morning.
The price action is just the funds driving the share price down to shake out loose holders. Will push back above 300p within a few days
Well, the results were okay, but the only negative thing is the net debt, which has increased from $117m to $173.7m!
I can't see anything negative in their report so why the slump in the SP?
Well Nat seems pleased “ Our business is in exceptional shape “….I tend to agree with an improving Dividend cushioning the wait as we move thro the 5 year plan.
BOO (boohoo) was clearly his big mistake.
ps Paul Scott holds VXL
Overall I agree with Paul Scott on Volex and for the same reasons I'm invested here, but Paul Scott's track record is hardly noteworthy (I have been on Stocko for several years), so I'm starting to question my judgment :-))
CONTINUED.......
Outlook - most companies are sensibly sounding cautious in their outlook statements, given all the macro trouble, and risk.
Volex sound pretty upbeat to me, and I trust what management say here, as their track record is good. Also, well-chosen acquisitions can be a nice way to mop up any shortfalls in performance elsewhere - so rising debt needs to be considered against rising earnings.
I like that Volex has a good spread of sector exposure too, which seems to smooth out peaks and troughs. It’s all sounding encouraging to me -
Volex delivered a robust performance during the first half of the year, despite the challenging backdrop, whilst executing its most significant acquisition to date.
The Board remains optimistic of a number of potential near-term sales opportunities to make further progress in the second half of the year, and remains on track to deliver full-year results in line with market expectations.
That’s very good actually, given tough macro.
Paul’s opinion - I hold a small position currently. I really must buy some more.
The forward PER of 10.3x seems modest, considering the excellent track record here, and no signs of any impact from macro problems. Could it warn on profit in future? Possibly, I don’t know. Hopefully the nice exposure to growing sectors could continue to mop up softness in other areas, who knows?
This is hard to argue with, and a forward PER of 10x seems distinctly undemanding -
https://app.stockopedia.com/content/small-cap-value-report-thu-26-oct-2023-scs-vlx-978494?order=createdAt&sort=desc&mode=threaded
This is one of many small-mid caps that tends to drift down between announcements, as people worry about macro impact on its trading. Then we get in line updates each time. It’s the same this week, we’re reassured -
The Group continues to maintain strong financial momentum and is well positioned to achieve full-year results in line with market expectations1,2…
2. The Company has compiled forecasts from four analysts with current market forecasts for the 52 weeks ending 31 March 2024 for revenue to be in the range of $849.8 million to $891.0 million, with a consensus of $864.6 million, and for underlying operating profit to be in the range of $82.3 million to $87.0 million, with a consensus of $84.3 million.
Excellent, very clear reporting there. Hats off to owner/manager Nat Rothschild for building a significant sized, and decently profitable group here.
Remember that Volex was quite a mess years ago. I can remember being initially sceptical about its turnaround, but then turning positive on it possibly around 2019 from memory, when the figures really began to strongly improve.
Since then, Volex has been absolutely transformed through a turnaround, and it seems an effective, value-building, disciplined (not over-paying) bolt-on acquisitions strategy.
Revenue growth in H1 of 4% is quite modest, but that’s organic, and against a strong comparative.
Customer de-stocking is mentioned, an important point of general read-across that I’ve spotted other companies mention too - higher interest rates mean that companies generally want to reduce cash tied up in receivables and inventories. Improving supply chains also mean that companies feel safer to run down inventories back to more normal levels.
I’m impressed that Volex seems to have been able to ride out and offset this destocking -
This has been more than offset by strong demand in Medical and Complex Industrial Technology supported by better availability of key components. There is evidence of de-stocking slowing in some channels, as order patterns are starting to normalise, particularly in Electric Vehicles.
Major recent acquisition $195m - of Murat Ticaret - positive-sounding comments on this. It will contribute 7 months to the P&L for FY 3/2024.
Debt - “covenant leverage” of 1.3x looks fine to me, and would only become an issue if trading fell off a cliff. Also I cannot imagine that the owner/manager called Rothschild would have a lot of trouble arranging bank facilities!
Cyber incident - we have to trust management on these things, but I don’t see (or even hear) any alarm bells ringing here -
… there is not expected to be any material adverse impact to revenue or underlying operating profit as a result of the incident. Costs for the recovery and remediation of systems are anticipated to be approximately $2 million, which will be reported as an exceptional item in the second half of the year.
Hopefully they’ll now have bulletproof IT protecti
Sorry ... Finger Trouble and no edit facility or delete I could find
What ever is the point in re-posting (twice!) almost the entire contents of the LIve RNS update?
Extracts of Update
Revenues for the first half of the year were 4% higher than last year on an organic, constant currency basis, against a strong comparative period.
$195 million acquisition of Murat Ticaret completed during the first half of the year. Integration activities are well underway and initial customer engagement has been very encouraging.
Costs for the recovery and remediation of Cyber systems are anticipated to be approximately $2 million, which will be reported as an exceptional item in the second half of the year.
Remains on track to deliver full-year results in line with market expectations. Delivered a robust performance during the first half of the year. Notice of results expects interim results on 23 November 2023.
Extracts of Update
Revenues for the first half of the year were 4% higher than last year on an
organic, constant currency basis, against a strong comparative period.
$195 million acquisition of Murat Ticaret completed during the first half of the year. Integration activities are well underway and initial customer engagement has been very encouraging.
Costs for the recovery and remediation of Cyber systems are anticipated to be approximately $2 million, which will be reported as an exceptional item in the second half of the year.
Remains on track to deliver full-year results in line with market expectations. Delivered a robust performance during the first half of the year. Notice of results expects interim results on 23 November 2023.
Good to see John Wilson aboard, part of the team that helped drive value for Elektron Tech., when they owned Bulgin Connectors, delivering a 10 fold exit valve for many ET shareholders, not that I’m expecting quite the same here.
Perhaps of little surprise VLX have been targeted given our involvement in critical Defence, Space and Aerospace applications .No doubt a full review will now be undertaken which should ensure more robust protections are in place going forward. Hopefully this was a lucky escape !
I nearly bought some more on Friday, but ran out of time.
4% more today - pure luck.
"The actions taken to date have ensured that all sites remain operational, with
minimal disruption to global production levels, and the Group continues to
trade with its customers and suppliers.
At this stage, any financial impact resulting from the incident is not
expected to be material."
I do hope so......
With the acquisition of Murat, Volex have taken over a well-known cable supplier within the industry and it will give them access / engagement to a wide range of off-highway OEMs, which I expect they will leverage to set up sales meetings and promote other products in their portfolio.
Yes Murat Ticaret looks a great acquisition being highly cash generative and should add at least $180m annual revenue to top line with impressive EBITDA returns. Being involved with four of the five largest agricultural equipment manufacturers in the world, is a good start !