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Looks like something is beginning to move here.
Anyone know when in July the results will be announced?
In The Times article on Saturday “Where in the world would you invest next”, Alex Cutler from Orbis Investments selected VCP out of only four recommendations in the UK.
Link:
https://www.thetimes.co.uk/article/where-in-the-world-should-you-invest-next-mxhvxg6z5
Well there’s a £3m plus trade delay reported. That’s more like Coltrane’s MO from last week.
Coltrane have not announced any more buying since last week, so the large volumes this week must be long funds buying, which is even more positive than short funds buying.
The shorts still have millions more shares they have to buy back.
Can’t see Vcp on shorttracker now?
Fund Coltrane Asset Management, L.P.
Change -0.46%
Date changed 1 Jun 2023
Coltrane disclosed yesterday, they bought another 400,000 shares on Wednesday.
The price has moved up 60p since Coltrane started buying, and they still have 1.9 million more shares to buy.
It’s not a coincidence there’s been no bears posting every day on here for nearly 2 month. It’s time xx
Let’s gooo.. Results July, ,, 10th consecutive year of growth in trading statement
Coltrane, the biggest shorter since August last year, have given up, buying back 470,000 shares on Tuesday, according to regulatory filings.
Coltrane have clearly decided that VCP’s share price is only going up from here.
Coltrane still need to buy back another 2.3 million shares, and that is going to put real upward pressure on the share price.
Other shorters will no doubt follow suit and start buying back their positions as well, to minimise their losses.
Whoever is loading the offer - and removing it- on a daily basis, I know you’re reading this and it’s been shown to some in higher echelons who can fathom you out lolz - happy hiding.
Away she goes. Recovery starts here imo
On the move. Judging by the little top ups looks like it’s getting on radars now. Reckon it pops £6 this time, get your shorts closed.
“Directors are confident in the Company's ability to continue to create wealth for shareholders.”
Speaks volumes maybe
Despite challenging macro-economic conditions, Victoria PLC, is set to deliver its tenth consecutive year of revenue and underlying operating profit growth. Total volume sold will exceed 200 million square metres (more than 29,500 football fields) for the first time in the Company's history with revenues for the year ended 1 April 2023 of more than GBP1.45 billion, alongside continued growth in underlying operating cashflow.
I don't understand these single or two share trades. I hope someone can help me to understand. Doesn't the commission cost as much or more as a single share trade? And thus make it cost twice as much to buy one share?
Sorry I'm such a newbie.
Dear Baoxiou,
I am surprised you are posting such detailed posts so frequently if you are neither short nor long.
Firstly, VCP is not trading on an EV/EBITDA of 10x, it’s actually less than 7x, nor is its Debt/EBITDA 5x, it’s actually closer to 3x.
The reasons for Interface’s current share price are that over the last four years it has been through three CEO’s, its EBITDA has gone from $178m to $117m, with a further decline forecast for 2023, and its Debt is in fact more than 5x EBITDA.
Over the same period, Mohawk has seen its EBITDA go from $1,366m to $830m with a further decline forecast for 2023.
VCP on the other hand has seen its EBITDA go from £96m to £163m with analysts forecasting a further increase in the current year and even more next year.
Why would anyone buy VCP equity at current levels...
Looking at EV/EBITDA for Mohawk Industries, and Interface Inc, two better run and well capitalised businesses, they are are trading with a very low multiple of roughly 6x. Then we have VCP which has net leverage of 5x EBITDA and the equity trades at near 10x.
INTERFACE just had a bad quarter and is down 20% on the year and Mohawk is trading near its 52 week low (with the company buying back stock of course), whilst VCP is up 12% YTD. Makes very little sense! Perfect time for some Warren Buffett bullisht quote that Geoff would use in an annual report "Markets can remain irrational longer then one can remain solvent"
https://seekingalpha.com/article/4583700-interface-stock-extremely-cheap-at-current-prices
https://seekingalpha.com/article/4578295-mohawk-industries-wait-until-q2-results-before-taking-a-position
As I said before, I would not touch this stock on the long or short side.... short you run the risk of a big squeeze and longs make no sense when there are much cheaper and scaled businesses you can buy into in better markets (the US). VCP is artificially inflated due to the tight borrow and desperation for Geoff Wilding and co to squeeze. It is a pig with lipstick.
This stock will crash hard...
https://www.elperiodicomediterraneo.com/ceramica/2023/02/27/industria-ceramica-vive-etapa-incertidumbres-83675934.html
"The multinational Victoria Ceramics , owner of Keraben , Ibero, Metropol and Saloni, announced through an official statement that, in order to adapt the group's production capacity to the expected real demand, "in the plant it has in Sant Joan de Moró will continue to operate its atomizer, manufacturing red atomizer, and the rest of the products that this plant manufactured (red body and small porcelain formats) will be transferred to the other plants of the Group in l'Alcora and Nules, which will continue to serve all the group's brands."
So, Victoria put out an official press release to Spanish media but hasn't put out an RNS? Interesting... are they flouting disclosure obligations? This story also notes that the European Commission is looking to introduce anti-dumping legislation re tiles coming from TURKEY and India... so won't be as easy to bring in tiles from the Turkish plant as the company believes?
This part in the story also stood out:
The general director of Ceracasa , Carlos Cabrera , explains that "what began as a crisis of energy costs spread to raw materials and supplies, and all of this led to a drop in demand as the markets were unable to absorb the cost increases. Transferring these increases to sales prices means losing competitiveness. "This situation has meant a strong financial weakening of the companies aggravated by the lack of response to the demands of the sector, the insufficient support of the Generalitat and the neglect of companies by the central government ." In short, "the sector is in a worrying situation," says Cabrera.
Good luck all!
Synergies.
Victoria has been investing heavily in the Keraben facilities over the last three years to increase capacity and efficiency, and has now closed the former Saloni facility and moved production to the upgraded and more efficient Keraben facility.
The Group has also now closed one of the Balta facilities in Belgium in order to move that production to the UK, where, again, it has invested heavily to increase capacity and efficiency.
All the details about the investments and the rationale are in the Annual Reports.
These two rationalisations of production will save the group tens of millions of euros without impacting the brands.
This is what big groups do to extract synergies.
Victoria has had a lot of success over the years extracting synergies by moving production around to where it is most efficient.
Looking back through the Annual Reports, Victoria has recently invested a lot of money into its UK carpet factories in Wales and Yorkshire to increase capacity.
It is clear that they plan to move the Balta production in Belgium to Wales and Yorkshire.
A back of the envelope calculation would suggest that the potential labour savings alone would be in the order of €15m p.a., 500 x €30K per employee.
So closing down Saloni, Keraben, Balta, all at the same time to move capacity to the UK, which they already owned prior to these acquisitions, is all for production/cost optimization... yeah OK, have another hit of the crack pipe.
Balta has 532,000 sq metres of production/office space in Belgium across three sites and is closing the smallest one ~ 18% of the total. Business is clearly poor but it appears to be a cost rationalisation rather than a total collapse. It is going to be more difficult to close another of the two remaining because one produces components the other the finished tufted carpet.
I still rate this as a sell.
AceofClubs
"As the reason for the transfer to the UK, the company refers to the difficult economic context with exponentially rising wage costs, the unstable energy policy and a falling demand for fixed carpet on the continent. As a result, a profitable production of wall-to-wall carpet in Belgium has become impossible. The contracts of 295 employees in the Balta Carpets division and in the support services would be phased out."
https://www.nieuwsblad.be/cnt/dmf20230215_93737317
UNION REPS SAY VOLUMES ARE DOWN 60%
“What is happening now is what we predicted”, responds trade union representative Steve Meseure of the ABVV. “During the takeover, the management said that it was not the intention to transfer the department, but the world has changed in the meantime: the energy crisis, the war in Ukraine. The decrease in volumes has dropped by 60 percent. The UK is still the largest market and there is also sufficient capacity there, which makes it more profitable for the employer.”
Victoria has decided to close down their Balta plant which they paid near £140m for... what is interesting is that last month, Hamers said they were going to "reoptimise" this plant only last month.
So between Saloni, Balta, and Keraben... what is really going on?!!? not one single RNS????
300 jobs gone...
https://www.tijd.be/ondernemen/textiel/tapijtmaker-balta-schrapt-300-jobs-in-west-vlaanderen/10447511.html
Seems like it is a very tough market out there. Mohawk Industries, who are a $7.5bn flooring giant, saw there net income down nearly 90% this quarter and closer to home, Malin Flooring in Mancehster, has collapsed into administration. Not a small business either with around £30m in sales; maybe its a good opportunity for Geoff to go out and acquire those assets?
Fast-growing floor specialist collapses into administration
https://www.constructionnews.co.uk/financial/fast-growing-floor-specialist-collapses-into-administration-07-02-2023/
07 FEB 2023 BY JOSHUA STEIN
A floor specialist that has worked with major contractors including Buckingham Group and Sir Robert McAlpine has collapsed into administration.
Malin Industrial Concrete Floors Ltd, a £25.6m-turnover company specialising in flooring production, appointed Mazars as administrators this week.
https://www.barrons.com/articles/mohawk-industries-profit-warning-low-demand-plant-closures-flooring-carpet-51673969712
Mohawk Industries shares were sliding Tuesday after the flooring company issued a profit warning, citing declining demand.
The company pointed to interest rate hikes, high inflation and “lagging consumer confidence” throughout the United States and Europe as reasons for the business slowdown.
As a result, Mohawk “increased temporary plant shutdowns, which further compressed margins,” according to a company release. Further, flooring demand in North America fell more than in other areas, which resulted in inventory being slashed.
I would advise people to listen into what was a very grim earnings call for Mohawk: https://finance.yahoo.com/news/mohawk-industries-inc-nyse-mhk-032147341.html