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VLE are presenting on 19th March at Blackthorn Focus - I wonder if this means there'll be a trading update that morning or just before?
Https://www.blackthornfocus.com/blackthorn-event/apply/766-13eb21508e178f3d8bea279c5010f6d1fb749280
"On March 19th, Blackthorn Focus, in collaboration with City PR firm KTZ Communications, is running a results presentation for K3 Business Technology Group and an investor briefing from Volvere plc.
The event will include a business lunch and is free to attend.
Volvere is an AIM-quoted industrial holding company that specialises in turnaround investing. It does so with considerable success. In the last five years, book value per share has increased from 346p to 675p. Substantial uplift to that figure is expected to be confirmed with final results thanks to a recent material share buyback (at 1,102p) and the October 2018 disposal of Impetus Automotive for a premium in excess of £20m to book value.
Volvere will be represented by Mr Jonathan Lander, co-Founder and CEO."
...and similarly today, an £11k sale is taken without a problem, whilst an £11k buy causes a small tick up.
Good to see a £20k+ sell at 1012p happily accepted into the market. Either there's a buyer out there, or perhaps VLE are re-starting the buybacks (davidelliott, did you buy in?).
Intriguing news - what's behind the change of advisers from N_1 Singer to Cairn and Hobart.....
Https://www.investegate.co.uk/volvere-plc--vle-/rns/change-of-adviser/201901290700093151O/
Forthcoming corporate activity? Or just that Singer were to expensive? Whatever, it certainly isn't because VLE need to raise money :o))
not in here but come across VLE a few days ago and have been doing my research since then. What a brilliant little company, I cant really see any downsides here other than just the small size and large spread. Its got to be a matter of time before the market catches on, im going to see if I can get a small position opened tomorrow for as close to the sell price as possible
Hi Gailes5, good to see another poster here! The best companies often have the quietest threads.......
I hope there will be more share buybacks given the obvious value here, with the £33m m/cap barely equalling the cash pile, let alone the almost £3m deferred consideration receivable plus the value of Shire Foods - including the freehold property - and Sira Defence.
We could also get a huge special dividend - this should cause a very decent share price rise.
I do also believe the Landers may have achieved optimum timing in offloading Impetus when they did.
VLE should be getting plenty of proposals through the doors at present. Hopefully another bargain purchase will presage another step up in the share price.
There was a brief summary by Graham Neary on the Stockopedia Small Cap report on his VLE holding - which is the largest holding in his portfolio:
Https://www.stockopedia.com/content/small-cap-value-report-mon-31-dec-2018-reflections-vle-brby-hat-pcf-crl-bats-rec-dpeu-ucg-431063/
What a quiet board! Happy New Year to all. There seems to have been a marked increase in small buyers over the last 2 days, I wonder if some broker or mag has tipped them?
The shares have held up well in the market sell off but where is the company going. If they sell Shire we become a cash shell and then do they go for a much larger acquisition or perhaps even a reverse take over?
Any thoughts? Rivaldo?
Nice coverage of JL's speech at Mello London here (also positive mention of another of my holds, KAPE, by Gervais Williams).
Amazing that VLE were the only bidders for Impetus from 80 potential bidders!
Also interesting that the Landers usually know within 5 minutes of meeting management whether a company could be a good investment. I know others disagree, but I've also found that meeting management at presentations etc is often - though of course not always - very helpful in reaching an opinion on potential investment.
Remember that the £33m cash per the below excludes the almost £3m deferred consideration:
Https://www.stockopedia.com/content/mello-london-2018-notes-gervais-williams-lord-lee-bioventix-and-others-422433/?utm_source=Stockopedia+Subscribers&utm_campaign=af301d1ac1-Newsletter+05+December+2018+-+Non+Subscribers&utm_medium=email&utm_term=0_daf28b1d4d-af301d1ac1-41876725
"Volvere
VLE is a turnaround specialist set up in 2002
Looks for loss-making or marginally profitable companies that are unsuitable for other private equity outfits & improves them
They look in the UK, possibly Europe
£10-£100m revenue companies
They want board control and typically 100% of equity
They like people businesses
Impetus Automotive was their most recent purchase; it was offered to 80 people & VLE was the only one to make an offer
VLE currently has £33m of cash & Shire Foods (acquired for £0.54m in 2011 —> 2017 PBT of £0.64m and revenue of c£15m)
Q&A
Q: What are you going to do with the cash? What about Brexit?
A: There was a £6m buyback in October. There will be more of the same turnaround strategy. Brexit - disruption can present opportunities for a company like VLE
Q: Tell us more about your strategy
A: A lot of it by now is gut instinct developed over the years. They often know within five minutes. They look for managerial resilience and good character. They then do desk work on the company
Investing is all about the price. Believe in the people in a business and treat them fairly."
Thanks for pointing this out in October. Having been out and missed the big jump (as with others - rats) I took advantage, at 1100.
Doesn't always pay back quickly: NTQ has taken forever to get the benefit of its cash pile. Nevertheless, waiting in hope. And interesting what you say here about buybacks.
To reiterate, the current m/cap is £32.7m.
This compares to the effective current cash pile of £37.4m, comprising £20.4m at 30/6, plus £23.1m for Impetus (incl. £2.87m deferred) less £6.06m buybacks.
Plus the 80% of Shire Foods is worth say £5m (incl. the £2.6m freehold property).
Add on say £600k for Sira Defence and you get £43m.
With cash receipts up to Impetus' sale in October, VLE's NAV should now equate to around 1400p per share, compared to the current 1050p share price.
Without any premium for the Landers' track record or for the likely value arising out of any further acquisitions.
JL presented at Mello London this week and was as engaging as ever. The main thrust was general in tone about investing pitfalls/golden rules, but there was a brief section about VLE and running through the success of the Impetus investment.
In particular JL noted that the current cash pile was excessive and there would likely be more buybacks (presumably dependent on achievable prices and available stock).
I assume people are cottoning on to the value here - and to the safety net in volatile markets.
Re-working the calculations then....
Let's say VLE now have around £37m of cash - £19m net of borrowings at 30/6/18, plus £23.1m from Impetus (incl, the deferred), plus say a round £0.9m from trading since 30/6, less the £6m buyback.
There are now 3.12m shares in issue.
So VLE now have 1186p per share of cash.
Simso valued Shire at £4.8m. That's another 153p per share.
Adding in a bit for Sira gives 1350p-1400p per share of core value.
With a track record like theirs, the Landers should really command an additional premium to the share price, especially since we'll hopefully hear further acquisition news in the not too distant future.
As previously announced, there's the buyback at 1102p today, with one trade of 550,254 shares and contra trades including a 317k and a 170k. There will have to be an RNS later to disclose the changes in director shareholdings.
That's £6m gone - still £37m+ of cash left in the kitty :o))
I notice that Jon Lander is presenting at Mello London on Monday November 26th, and "will also be taking part in an interesting panel session on what makes an exceptional Chief Executive". I think he has plenty to contribute in that respect :o))
Http://melloevents.com/mello-london/
Hopefully this will spread the word further. Whoever sold at 1008p this morning is selling £43m+ cash plus Shire including £2.6m freehold property plus Sira for a value of £36.9m at that 1008p. Bonkers imho unless for short-term considerations or those with little patience.
After the sale of Impetus, VLE now has £43.5m cash |(including the deferred element) - that's almost 1200p per share in cash alone.
Plus the £2.4m of freehold property, plus the value of Shire Foods and Sira which could be another £5m-£8m+.
This against a £40.3m m/cap at 1100p.....
Good to see a brief mention from long-term holder Evil Knievil in his daily column:
Https://masterinvestor.co.uk/evil-diaries/evil-knievil-oink-oink/?utm_source=Daily+Bulletin&utm_campaign=6f1aca09b1-Daily_Bulletin_20181005&utm_medium=email&utm_term=0_25eff0bb7f-6f1aca09b1-34898813
"However, a nice surprise this morning is that Volvere (LON:VLE) have concluded a major disposal. This leaves the shares at £11.50 offer. Presumably, they will go higher yet. VLE’s management are clearly clever."
ibs7491, VLE floated on AIM in its own right years ago at 100p per share. At 1050p or so now it's done rather well! So it's always been called Volvere. It did acquire NMT at some stage in from memory a **************, so perhaps you had NMT shares beforehand which then "became" VLE shares.
I think it may have been through the takeover of NMT (New Medical Technology) in the mid 2000s. I got some shares from there. Sill underwater on these ones right enough...
What company did Volvere originate from I have discover some shares in my portfolio but am unable to confirm the original name of company name ,tia
I certainly chose the wrong morning to go out and be away from the screen :o))
So £23.1m consideration plus £20.4 existing cash equals £43.5m cash |(including the deferred element) - that's almost 1200p per share in cash alone.
Plus the £2.4m of freehold property, plus the value of Shire Foods and Sira.
So the current share price still looks rather low to say the least.
Anyway, congrats to the Landers are due once again. To turn a net £0.73m into £31m is remarkable in such a short timeframe.
Now let's see if we can dispose of Shire Foods too....
An excellent summary elsewhere from "simso" which I hope he won't mind me pasting here, giving an NAV of around £15.53p per share - over 50% more than the current share price.....and that's with a number of relatively conservative assumptions:
"An updated view on how I would calculate a valuation based on today's Interims.
1) Impetus: Made £1.9m PBT in the first half 2018, and indeed £1.9m in the second half of 2017. The large contract was in place for both those periods, and now we have news of a new contract. While smaller than the first, it must be material, or why mention it! The new contract starts in September 18, so 3-4 months benefit. Even with no other Organic Growth, I pencil in £4m PBT in FY 2018.
A crucial question is what valuation multiple would you apply / hope for if they sold it? I see from Stocko's front page that the median average current year rating for UK stocks is 13. An argument for lower valuation is simply that "Its in the Automotive Sector" where Dealerships in particular have must lower ratings at the moment. However, to counter this I would say that we are not selling cars, and point to the contractual nature of a significant part of forward revenues. Also the business has doubled in size over three years of ownership...so a strong forward trajectory. On balance I think a market average 13* post tax would be fair, and round it down to 12 for prudence. I assume a Tax rate of 19%. That would value Impetus at £38.9m in total, and £32.3m after the 17% minority. I then deduct another 10% as an assumed Lander Bonus...so £29.1m net.
Shire made £0.6m in 2017, and that included a one-off impairment of assets of £0.2m...so underlying £0.8m. The first half 18 was slightly better than last year. The second half should also benefit from the new Capital spend of £1m. I estimate £1m profit, and put it on a lowly / prudent rating of 5* Post Tax. I add the £2.6m Freehold, deduct minority of 20*, assume 10% Lander Bonus, and my valuation is £4.8m.
I assume nothing for Sira....although perhaps a little harshly as there are signs of life in the Statement. I try to maintain my prudent approach throughout!
We currently have £20.5m Cash/financial instruments, and I estimate this improving to £22m by year end, given my profit estimates above.
If I give no value to Goodwill and Plant and Machinery (£5m+ on Balance Sheet), and take Current Other Assets (mostly receivables), less total provisons and liabilities, that nets out to £1.4m....say round down to £1m after minorities.
This gives me a valuation of exactly £57m, or £15.53 a share."
Good to see a £19,000 buy at almost 960p just now.
Presumably as usual many punters will wait for Simon Thompson, Graham Neary at Stockopedia or someone else to say how good VLE are before they take the plunge.
Interims are out - and they're excellent:
Https://www.investegate.co.uk/volvere-plc--vle-/rns/half-year-report/201809270700160899C/
Impetus' PBT is up 25% - and they've just won a second training contract with a different auto company which should continue its growth in years to come, even if not quite at the same turbo-charged rate.
Shire have improved their performance in the seasonally weaker H1 and are trading in line despite certain cost pressures.
And good old Sira is showing signs of life.
Cash is up £2m to £20.4m, and core NAV is up to 675p. The true NAV must be nearer double that without doing the calculations, but that's for later (or someone else!).
Also, some interesting comments from JL re acquisitions and re Brexit, where he notes that VLE may be one of the few beneficiaries, which is intriguing.
Only two months to go until the interims now.
I thought the succinct Chairman's outlook statement from the finals had a rather bullish tone to it:
"We look forward to another encouraging year in 2018."
Here's the full tip FYI: "I have been casting my eye over the annual results from Aim-traded investment company Volvere (VLE:940p). It’s a company I know well, having included the shares, at 419p, in my 2016 Bargain Shares Portfolio. I last advised running profits ahead of the full-year results (‘Bargain Shares: Beating the market’, 12 Mar 2018). They were eye-catching. Volvere’s pre-tax profit surged by 74 per cent to £3.45m on record revenue of £43.4m, driven by the performance of Impetus Automotive, a provider of consulting services to the automotive sector in which Volvere has an 83 per cent stake. Impetus trebled its pre-tax profit to £3.3m (better than I had expected) on revenue of £27.3m, reflecting an improved client focus, and a major contract for the management and delivery of a large automotive manufacturer's learning and development activities in the UK. Impetus accounts for just £3.7m of Volvere's net asset value (NAV) of £26.1m, or 659p a share, so is effectively in the books for little more than its annual pre-tax profit. Volvere’s 80 per cent stake in Shire Foods looks undervalued, too. It’s valued in the accounts at £6.2m, representing less than eight times underlying pre-tax profit of £830,000, which was earned on slightly higher revenues of £15.8m. True, profits slipped as margins took a hit from higher raw material and staff costs, and restricted the ability to pass on these increases to customers. However, finance director Nick Lander notes that “in recent months there has been a greater realism about the need to either increase consumer prices (or reduce the quantity of product supplied at a given retail price), or to absorb cost increases from Shire.” A planned £950,000 investment in new equipment will enable Shire to manufacture its products at a higher margin, offering substance to the directors’ view that the business will return to growth this year. That possibility is not being priced in. That’s because if you strip out Volvere’s net funds of £16.3m, a sum worth 445p a share, from its £34.3m market value, then the stakes in Shire and Impetus are effectively in the price for £18m, or only 4.4 times their combined annual pre-tax profit, and this ignores any value in Volvere’s small digital CCTV business. Run profits."
in the IC today - here's the conclusion: https://www.investorschronicle.co.uk/comment/2018/06/19/volvere-s-record-results/ "Volvere’s 80 per cent stake in Shire Foods looks undervalued, too. It’s valued in the accounts at £6.2m, representing less than eight times underlying pre-tax profit of £830,000, which was earned on slightly higher revenues of £15.8m. True, profits slipped as margins took a hit from higher raw material and staff costs, and restricted the ability to pass on these increases to customers. However, finance director Nick Lander notes that “in recent months there has been a greater realism about the need to either increase consumer prices (or reduce the quantity of product supplied at a given retail price), or to absorb cost increases from Shire.” A planned £950,000 investment in new equipment will enable Shire to manufacture its products at a higher margin, offering substance to the directors’ view that the business will return to growth this year. That possibility is not being priced in. That’s because if you strip out Volvere’s net funds of £16.3m, a sum worth 445p a share, from its £34.3m market value, then the stakes in Shire and Impetus are effectively in the price for £18m, or only 4.4 times their combined annual pre-tax profit, and this ignores any value in Volvere’s small digital CCTV business. Run profits."
From today's Sunday Times - Two Sisters are selling their pie division, which might make an interesting acquisition for VLE as an industry consolidation play for Shire Foods. It's impossible to know how much of the mooted �50m price for both pies and fish the pie business would represent, but I suspect it's probably more than the Landers are prepared to pay. However, I'd also suggest that the Landers might see potential here. If the acquisition price was indeed cheap, and within VLE's means and their �20m or so cash pile, then adding it onto Shire with the resulting synergies and efficiencies might just present a bargain opportunity. It might also make the eventual sale of Shire that much easier and attractive as part of a much larger entity. Https://www.thetimes.co.uk/edition/business/chicken-king-ranjit-boparan-gives-up-pies-gtskls7zq "Chicken king Ranjit Boparan gives up pies Chicken tycoon Ranjit Boparan is preparing to sell one of Britain's oldest pie makers as he scrambles to rescue his business empire. City sources said the 2 Sisters Food Group, owned by the Midlands-based entrepreneur, is weighing a disposal of Holland's Pies, which has been making "proper pies and puddings" in Lancashire since 1851. Bankers at Clearwater International have been appointed to run the sale process. The firm is also handling the sale of a separate Boparan business, Donegal Catch, a fish supplier in Ireland. Many of the prospective bidders are said to be considering offers for both businesses, which are estimated to have a combined value of about �50m. Boparan, dubbed the “Chicken King��, is struggling to keep his heavily indebted empire together after being hit by a food hygiene scandal at his plant in West Bromwich. etc"