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Not as much uplift on sp as I expected. Hopefully will continue rise as positive news spreads
Incredibly slow movement but its heading in the right direction. Volatile certainly not the word on 17 trades lol but this will be a nice 10% over the next couple of weeks!
Good spot, thank you for the breakdown below
Simon Thompson of Investors Chronicle has provided a further update regarding Avingtrans on 28/7/21.
The article raises the target to 500p.
In the article he quotes a sum of the parts calculation by Paul Hill founder of PMH:
It looks like he uses a 13x operating multiple.
Engineered pumps and motors division 211p
Process solutions and rotating equipment 195p
59% stake in Magnetica 37p
Luton land 34p
Cash 66p
Central costs -38p.
ST points out that Avingtrans is currently on PE ratio of 12, a 38% discount to its engineering peers.
I'm quite well loaded up here so won't be adding, however, I'm upbeat regarding prospects for the next 12 months.
Have seen Mr Hill's sum of parts analysis - interesting but not exactly taken by it as is.
I posted 22nd February 2021 (share price then 318p )following a Simon Thompsom ( Investor Chronicle) mention. "I have not yet seen it but thanks for alerting me to the latest Investor Chronicle mention. The sum of parts argument is worth considering over and above a share price of 300p. First, the property development potential at Luton providing around 1000 good quality flats whilst allowing for relocation of the existing factory-say £30k a flat less moving costs etc say at least £15m net. Second, the crystallisation of value within 18 months of the 60% interest in their Australian subsidiary Magnetica maybe by a listing could be worth between £30m and £50m. Thirdly, the possibility of new near term waste treatment orders from Sellafield & medium/long term extensions to
the successful 3M box contracts. Capitalised value £?m
At 300p the company has market capital value of about £100m well supported by their two pronged energy
business. Each £10m of additional value from sources (1), (2) & (3) above equates to 30p/share. Do your own
calculations as to where the share price could be heading! Would be interested to see any details of Simon
Thompson's perhaps similar figure work"
Since then they have sold very well for £35m cash the Peter Brotherhood business., obtained a major £20m extension to their box contract, separated out the future potential of Booth Industries, and formally tendered via Savills their Luton (1000 flats + Commercial too) development site. Add those to the above (February 2021) sum of parts and you can get a better feel for the potential this year for >400p - to what extent will perhaps be influenced by any announcements as to progress at Magnetica. To some extent the above has cleared the decks for what next out of the hat?
argument is worth considering over and above a share price of 300p. First, the property development potential at
Luton providing around 1000 good quality flats whilst allowing for relocation of the existing factory-say £30k a flat
less moving costs etc say at least £15m net. Second, the crystallisation of value within 18 months of the 60%
interest in their Australian subsidiary Magnetica maybe by a listing could be worth between £30m and £50m.
Thirdly, the possibility of new near term waste treatment orders from Sellafield & medium/long term extensions to
the successful 3M box contracts. Capitalised value £?m
At 300p the company has market capital value of about £100m well supported by their two pronged energy
business. Each £10m of additional value from sources (1), (2) & (3) above equates to 30p/share. Do your own
calculations as to where the share price could be heading! Would be interested to see any details of Simon
Thompson's perhaps similar figure work
I've just followed a link from Twitter that's taken me to the LinkedIn page of Paul Hill, founder of PMH Capital Ltd.
Mr Hill has provided an analysis of Avingtrans. I don't have access to the full write up as I don't "do" LinkedIn.
Despite this handicap I was able to read one, very positive, page.
Here's an excerpt from that page:
"Plus having run the numbers (see attached), my ‘Sum-of-the-parts’ valuation comes out at 507p/share (370p today). With possible further upside to 669p, if LFL sales can accelerate from 5% to 10% pa. All underpinned by a multi-year orderbook, including several large, flagship contracts."
I don't know what Mr Hill's track record of pedigree in these matters is, however, his targets are quite ambitious.
I will be surprised if Simon Thompson does not soon pick-up on today's announcement too.
Also still in the pipeline are the potential Luton property development and options to possibly monetise the majority holding in Magnetica - and perhaps another acquisition?
Simon Thompson has done a further write up of Avingtrans on 29/3/21.
The article highlights the sale of Peter Brotherhood as being 4x the purchase price.
He also highlights getting the majority stake in Magnetically and merging this with SciMag and Tecmag as being potentially transformational making a global leader in MRI systems.
The article concludes:
I see further upside to my upgraded sum-of-the-parts valuation of 400p a share, the equivalent of a 2021-22 cash-adjusted price/earnings (PE) ratio of 15. Buy.
So that's upgrades from 335 to 375 on 21/2/21 and upgrade from 375 to 400 on 29/3/21.
With the shares now marginally above 300, there's a reasonable prospect of 33% gain.
Happy with this. It certainly looks like they are good at what they do. Maybe will get a comment from Simon Thompson at Investors Chronicle, who lasted recommended it Feb 19th.
"Disposal of Peter Brotherhood Limited
Avingtrans plc, which designs, manufactures and supplies critical components, modules, systems and associated services to the energy, medical and industrial sectors, is pleased to announce that it has completed the sale of Peter Brotherhood Limited ("Peter Brotherhood") to Howden, a leading global provider of mission critical air and gas handling products, for a total consideration (enterprise value) of £35.0 million (the "Disposal"), which, after adjustment for debt and working capital, will result in the Company receiving net proceeds of approximately £30.6 million, before transaction costs.
Background to the Sale
Peter Brotherhood, based in Peterborough, UK, which sat within Avingtrans' Process Solutions and Rotating Equipment ("PSRE") division, specialises in the design, manufacture and servicing of performance-critical steam turbines, turbo gen-sets, compressors, gear boxes and combined heat and power systems. It was acquired in September 2017, as part of the acquisition of the Hayward Tyler Group ("HTG") which attracted total consideration of £52.7m, of which Peter Brotherhood represented approximately £9.3m. Therefore, the Disposal represents a gross return on the original capital investment of almost four times.
The Disposal has been orchestrated in-line with the Company's long term Pinpoint-Invest-Exit ("PIE") strategy, which aims to realise value for shareholders. Peter Brotherhood was in difficulty when it was acquired by Avingtrans and a rapid restructuring programme was implemented, followed by a strategy reset. This led to a project to recruit and train an improved sales force, multiple sales agents and a strengthening of the aftermarket team, which proved to be the key to recovery and increased value.
To make the next step change in performance at Peter Brotherhood, Avingtrans would have had to enter a multi-year programme of investment. Therefore, the Board decided that the time was right to execute an exit plan, to optimise value for shareholders and to unite the team at Peter Brotherhood with Howden, a global leader in air and gas handling products, which can take the business to the next level.
Peter Brotherhood's revenues for the year ended 31 May 2020 were £25.7 million, resulting in a contribution to Group operating profits of £3.3 million. At the date of sale, the unaudited pro-forma net assets being disposed of, after adjusting for intercompany funding, are approximately £5.0m.
Terms of the Sale
The Disposal is for an enterprise value of £35.0 million which, after adjustment for debt and working capital, will result in the Company receiving net proceeds of approximately £30.6 million, before costs. There are no earn out arrangements, or deferred consideration."
I have not yet seen it but thanks for alerting me to the latest Investor Chronicle mention. The sum of parts argument is worth considering over and above a share price of 300p. First, the property development potential at Luton providing around 1000 good quality flats whilst allowing for relocation of the existing factory-say £30k a flat less moving costs etc say at least £15m net. Second, the crystallisation of value within 18 months of the 60% interest in their Australian subsidiary Magnetica maybe by a listing could be worth between £30m and £50m. Thirdly, the possibility of new near term waste treatment orders from Sellafield & medium/long term extensions to the successful 3M box contracts. Capitalised value £?m
At 300p the company has market capital value of about £100m well supported by their two pronged energy business. Each £10m of additional value from sources (1), (2) & (3) above equates to 30p/share. Do your own calculations as to where the share price could be heading! Would be interested to see any details of Simon Thompson's perhaps similar figure work.
Simon Thompson of Investors Chronicle has done another write up of Avingtrans on 19/2/21.
He's raised his target price to 375p from 335p on the basis of Sum of the Parts for the various divisions although doesn't provide detail of these values.
He generally gets these things right more often than not and, in my view, is a major reason to subscribe to IC.
Pretty positive so remains a long-term holding.
Thanks for the link poole, I'd never have found that myself. I remain astonished at the information that some people can dig out.
Slowly, slowly I'm getting progress in regards to putting a value on the Hayward Taylor, Luton site.
I now know that the site is 2.78 hectares (truthfully, that doesn't help me greatly as I've no idea as to units of area, however, another look at Google provides some help).
1 acre = 0.405 hectares.
1 hectare = 10,000 square metres.
This means the Hayward Taylor site is 6.86 acres (2.78 ÷ 0.405).
In metres it's 27,800 square metres ( 2.78 x 10,000)
Reviewing the "land for sale in Luton" hits I got earlier I see that the site for sheltered housing has gone, either taken off the market or sold. I didn't keep a record of its size.
The MOT garage on Ashburnham Road at 0.505 acres remains for sale at £1.4 million. This gives a value per acre of £2.72m (1.4m ÷ 0.505).
If we apply this price to the Hayward Taylor site we get a value of £19m (2.72 x 6.86).
A further site in Dordens Road LU4 covers 612 square metres and is for sale at £600k. This gives a value of £980 a square metre (600,000 ÷ 612).
If we apply this price to the Hayward Taylor site we get a value of £27.24m (27,800 x 980).
Finally a third site at Midland Road and Burr Street LU2 which covers 2.34 acres can be yours for the princely sum of £10m.
If we apply this price to the Hayward Taylor site we get a value of £29.3m: (6.86 ÷ 2.34)x 10.
So, three values of sites in the same general area: £19 million; £27.4 million; £29.3 million.
I'm sure there'll be a pile of factors that I know nothing of regarding each site. Putting my lack of local knowledge to one side, with around 32 million shares, that would add between 59.3p and 91.5p per share.
That would be on a straight sale. There are other routes to monetise the site such as working in conjunction with a builder/developer in order to share any valuation uplift as buildings are completed.
The next exciting thing will be to have a look at the full range of property and land owned by Avingtrans and decide what might be surplus to requirements and attributing values. Currently all property, plant and equipment is in the interim accounts at £34.45 million. That includes the Luton site!
I wonder, when last were all of the sites valued?
It strikes me that there's considerable upside available from a rerating of the company's property assets.
One of their main buy tips
Hello, For starters try this link for more info on the development proposal-
https://www.skyscrapercity.com/threads/luton-kimpton-road-68m-21fl-mixed-use-pro.2245986/
Today's results show considerable progress in each of the divisions. I can find no mention of the outline planning permission for the site in Luton (probably because this was obtained after the reporting period ended)
On 7/7/20 Avingtrans released an RNS providing a trading update. This included a somewhat understated comment relating to planning permission for 1,000 dwellings on the site of Hayward Taylor Luton.
No mention of valuation was made and I've no idea as to what something like this might be worth.
Turning quickly to Google and searching "land for sale Luton" brought up firstly a link to Rightmove.
Amongst the offerings were two that might have some relevance.
Firstly, a site for sale in Markgate Road, Luton with permission to construct an over 55's development with 158 residential units. This is for sale at £9.5m.
Secondly, a site on Ashburnham Road, Luton. This site is currently occupied by an MOT centre and 29 lock up garage. The asking price here is £1.4m
I know nothing of Luton. I don't know whether there's good parts or grotty parts and I've no idea as to how the Hayward Taylor site compares.
However, with prices of £9.5m for a 158 unit development and £1.4m for the site of an MOT centre, I'll bet the value for a site for 1,000 dwellings is going to be very substantial for a £86m company.
I note that they acquired the above for a bargain price of £1.8M from the liquidator of Redhall Group in June 2019. I don't know how much they've invested in it to date, but I think we can assume it's worth a significant multiple of this now. With total contract wins of at least £48M under their belt to date, AVG have again shown their ability to turn around a business in short order. Good value on offer here for the patient investor.
Much bigger contract than other recent ones.
Impressive.
Could be worth another £1 per share.
Was the planning consent for up to 1000 dwellings mentioned in the RNS already factored into the share price?
After today's news I expect further weakness to follow.
With the Market mid-price presently 322.5p the Market Capital has broken through the £100m for the first time.
Loads of buying today - 315p - as near as being paid.
Aah, thanks ...... I missed that t/up of the 14th.