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Last night's and this morning's RNS's suggest that Canaccord Discretionary Clients were the sellers, and their shares were picked up by (1) the buybacks and (2) Crucible Clarity Fund Plc, who increased their holding to 6.55%, or 152,393 shares.
Wow - a really NAV-enhancing move just announced. Over £916,000 of buybacks, and there must be a belief (rightly imo as above) that at 1160p the shares are extremely undervalued:
https://uk.advfn.com/stock-market/london/volvere-VLE/share-news/Volvere-PLC-Transaction-in-Own-Shares/93481302
Re the prior post on valuation, he's used a straight 25% tax charge on Shire's £3.64m contribution to VLE after intra-group management charges et al.
Firstly, the tax charge is unlikely to be precisely the full 25% due to capital allowances and super deductions. Let's call it a conservative 22%. Secondly, imo we should use Shire's PBT before intercompany charges etc, which is £3.86m. Thirdly, let's be a tad more generous and use a P/E of 8 given Shire's terrific track record and apparently excellent competitive position.
That gives Shire a £19.3m valuation. Add in the £23.74m cash and the total is £43.04m, which is around £18.50 per share.
Happy to be corrected/struck down!
A starting point for discussions re valuation posted from Jeff256 elsewhere - will have a think myself about this tomorrow:
"Well, the pie business is making £2.73m after tax. Apply a PE of 7 on 80% ownership and we get about £15.3m. Add £23.74m cash and we get £39m
Approx £16.90 per share."
Given NAV of £14.82, I would expect "enhancing shareholder value" to mean that we should expect deals to increase beyond this - otherwise they could just enhance value by liquidating and giving us the £14.82, which is almost 30% above the current SP.
I think I will sit tight and wait to see what the future brings...
The reference to "enhancing shareholder value" could also mean perhaps a tender offer to shareholders, at say around £15 per share, i.e around the current NAV.
This could be alongside another acquisition given the huge cash pile.
Either way, hopefully it's time for a little excitement around here.
The trading update is out - and it's terrific. The £25m m/cap looks ridiculously cheap imo against:
- a PBT of £4.75m!
- Shire Foods made a core PBT of £3.86m (up from £2.78m), up almost 40%....
- the cash pile is up to £23.74m, against a £24.8m m/cap!
- NAV is up to £14.82 per share and £37.5m
Even better:
- investment opportunities are improving
- and re Shire:
"We have been encouraged, however, by the levels of new business opportunities we are seeing in Shire and remain cautiously optimistic for the remainder of the year"
The final sentence is also interesting - perhaps they're suggesting special dividends here?
"we are focused on enhancing shareholder value and, inter alia, continue to monitor and review our ongoing requirements in terms of the cash required to deliver our strategy"
In the year when JL so sadly passed away, congrats to Nick in particular.
News that Aldi is spending £550m this year expanding its store network, and wants to grow it's current 1,000 stores to 1,500. Which should be good for Shire:
Https://www.retail-week.com/grocery/aldi-commits-550m-to-bolster-store-network-in-2024/7045577.article
Right now you can work an in the market bid at 1001p a share. If that gets filled it represents a 23.5m market cap.
Unless something catastrophic has happened at Shire since the market was last updated, which I think is unlikely in the extreme, then that is a crazy price.
HNY to all here (if anyone!).
Both Aldi and Lidl have today reported their best ever Christmas sales. Which hopefully augurs well for Shire Foods:
Https://www.theguardian.com/business/2024/jan/02/aldi-lidl-christmas-sales-food-price-inflation
Buying at 1250p and now 1300p this morning.
Maybe some speculating that Shire will now be sold and VLE wound up with assets being distributed to shareholders. Of course could equally be betting that Shire coninues its excellent and consistent performance in recent years.
I note that the properties have now definitively been sold per the listings page - hopefully at the full £1.635m price:
Https://www.fennwright.co.uk/property/2-4-clough-road-severalls-industrial-park-colchester-essex-co4/?address_keyword=colchester&commercial_property_type&radius&tenure_type&minimum_floor_area&maximum_floor_area&department=commercial&units&permalink=66692
Crucible Clarity Fund Plc have been buying and now own 5.21% of VLE, or 121,228 shares - up from a prior 3.06%:
Https://uk.advfn.com/stock-market/london/volvere-VLE/share-news/Volvere-PLC-Holdings-in-Company/92543110
They declared with 3% in Oct'22, so this is their first addition since then.
I note that the two properties for sale appear to have disappeared from the "for sale" listings below, which is hopefully a good sign that completion has happened or is about to happen.
Excellent news - the two spare properties in Colchester are now Under Offer.. Here's a link (£1.635m listing price):
Https://www.fennwright.co.uk/property/2-4-clough-road-severalls-industrial-park-colchester-essex-co4/?address_keyword=colchester&commercial_property_type&radius&tenure_type&minimum_floor_area&maximum_floor_area&department=commercial&units&permalink=66692
In case anyone missed last night's late RNS, VLE made a substantial £116,000 buyback of 10,000 shares:
Https://uk.advfn.com/stock-market/london/volvere-VLE/share-news/Volvere-PLC-Transaction-in-Own-Shares/92229973
Lovely obituary for Jonathan Lander:
Https://www.heraldscotland.com/business_hq/23824219.investor-philanthropist-founded-turnaround-investor-volvere/
Brief extract:
"With an initial capital of around £3million, Volvere would buy businesses in distress and turn them around.
The Lander brothers had a real passion for people-businesses, where Jonathan’s incisive mind could unnerve and inspire staff in equal measure. The successes over the next 20 years would see more than £34million returned to shareholders. Tears were often shed when Volvere sold an investment and staff knew a special period of ownership was coming to an end."
You don’t often see a genuinely profitable business (Not just EBITDA profitable) that has a responsible management team with a good track record of returning money to shareholders trading around cash plus properties held for sale.
There may be companies available in the market with more upside potential but you’d be hard pressed to find anything with less risk than Volvere.
Excellent H1 results from Shire, with revenues up 21%, margins increasing and PBT up 29% in the much seasonally weaker first half.
The £25.96m m/cap compares to £21.4m cash (plus £1.45m of properties for sale) and £35.3m net assets.
Shire made £2.43m PBT last year, so PBT looks set for well over £3m PBT this year assuming the H1 rate of growth continues.
Assuming £3m PBT, less 25% CT, times 80% ownership, equals £1.8m. Give that a P/E of say 8 and Shire is worth £14.4m.
Taking into account the cash pile and the net assets there's plenty of upside from here.
Good to see the reassuring commentary too from Nick about he and the business moving forward from the tragic loss of his brother.
Just back from hols and learnt the terrible news of Joanathan's death. My thoughts are with Jonathan's family, particularly Nick, and friends. To be taken at the age of just 55 is just inconceivable.
I talked with Jonathan in person and on the phone a number of times, and he was always a pleasure to discuss matters Volvere-related and anything else with, being as honest and forthcoming as he could be. He had a fine, dry sense of humour and was obviously an extremely capable businessman. He and Nick have done a fine job with VLE.
For the record Evil Knievil on Master Investor had this to say:
Https://masterinvestor.co.uk/evil-diaries/evil-diaries-check-it-in/?mc_cid=f2147d2f90&mc_eid=db9f9bbaf2
"I invested successfully in Volvere (VLE) several years ago and sold out. I thought no more about it. It was and remains a very successful investment/trading company run by Jonathan and Nick Lander. It is chaired by David Buchler, a distinguished small company assessor. Last Monday, Jonathan died very suddenly aged 55. As an enquiry on Google will show there was nothing gross about Jonathan Lander.
Thus Nick is in the driving seat and one wonders what will happen now. TNAV is about £14 a share and one can buy stock (not much) at about £11.50. VLE is highly solvent and loaded with cash.
Curiously, the Lander brothers were shown as being paid just £19,000 p.a. between them. But, slightly unusually, they were also taking £650,000 p.a. into their management company, D2L. Perhaps Nick will take just £325,000 p.a. now. I do not know.
I also do not know what Nick intends to do with his time or why or where. But he might take VLE on to new heights of sensible achievement. Or he might accept an offer for the lot. If the latter, it must surely be above £11.50 a share. Here is an opportunity for patient investors."
Another £24,000 of shares just bought back at 1200p, in addition to the £27,875 bought back on 11th July:
Https://uk.advfn.com/stock-market/london/volvere-VLE/share-news/Volvere-PLC-Transaction-in-Own-Shares/91674129
Also, on 20th June FG Nominees based via Intertrust in Nassau (very nice) declared they'd been tipped over the 3% holding mark by the buybacks:
Https://uk.advfn.com/stock-market/london/volvere-VLE/share-news/Volvere-PLC-Holdings-in-Company/91378822
There's more info as to FG Nominees in the Panama Papers (!) here, but not sure it yields much:
Https://offshoreleaks.icij.org/nodes/10173907
RNS - that's a chunky £90,000 buyback of 7,500 shares at 1200p. That's another 10,000 shares off the books including the one four days ago:
https://uk.advfn.com/stock-market/london/volvere-VLE/share-news/Volvere-PLC-Transaction-in-Own-Shares/91226616
Nice commentary just emailed out from Investors' Champion - "compelling value":
Https://www.investorschampion.com/channel/blog/compelling-value-ai-appeal
"Compelling value
Volvere (AIM: VLE), the growth and turnaround investment company, announced results for the year ended 31 December 2022. This proven performer certainly looks compelling value at current levels.
Volvere identifies and invests in undervalued and/or distressed businesses, as well as businesses that are complementary to existing Group companies. The sole activity of the Group's continuing trading subsidiary, Shire Foods, is food manufacturing.
Shire, in which the Group has an 80% stake, was acquired in 2011 and manufactures frozen pies, pasties and other pastry products for food retailers and food service customers from its factory in Royal Leamington Spa. Volvere originally invested £500,000 in Shire for a 54% stake - it appears to have worked out rather well.
Group revenue from continuing operations (all Shire Foods) in the year rose 24% to £38.03m and the profit before tax from continuing operations more than doubled to £2.33m (2021 restated: £1.07m).
The closure of Indulgence Patisserie in the period was the first unsuccessful turnaround in Volvere's 20+ year history with the resulting loss for the year from discontinued operations £2.4m.
We commend Volvere for not mentioning the fairy tale EBITDA anywhere in its results!
Following share buy-backs, Volvere's total net assets at the year end were £35.75m, largely made up of cash and available for sale investments of £20.79m. Net assets per share of £13.90 compares to the current share price of £11.50 and market capitalisation of £27m, implying a 17% discount to the net asset value alone.
Exclude the cash and available for sale investments from the current market capitalisation assigns a value of only £6.2m for the Group’s 80% stake in the Shire Foods business. This seems very low for a business delivering excellent growth and profits (4 year CAGR: 38%) and c£2m of free cash flow in the most recent financial year. Put differently, we assume Volvere management would want a great deal more than £6.2m for the Shire business!
As a very rough guide, speciality bakery manufacturer Finsbury Food Group (AIM:FINS) trades at 8.9x forecast ‘adjusted’ earnings. Finsbury also carries some debt with the market capitalisation £122m and enterprise value £149m. There are also mercifully no adjustments in the Volvere numbers.
Volvere shares are unfortunately extremely illiquid with its share buybacks not helping matters."
Even better, just realised that the true PBT from Shire Foods alone before intra-group charges etc was £2.78m - this up hugely from £2.14m in 2021.
Surprised not to see buying here. Maybe unfortunate to be releasing results into this week’s market.
It’s worth 40m at least.
Full results for 2022 are out and in line with the trading statement.
Shire had a stellar year, with PBT at £2.33m up hugely from £1.07m. Such a shame that the small (at the time) Indulgence acquisition proved to be VLE's first failure.
At the year end there was £20.8m net cash and £35.75m net assets against the current £28.2m m/cap (with 2.35m shares in issue).
The commentary re Shire going forward remains optimistic, with energy and raw material prices abating, increased capacity etc.
VLE have confirmed that one of Indulgence's properties was sold post year end (from memory around £750k?) and the other property, worth £1.635m, is to be split into two - the two can now be seen here:
Https://www.rightmove.co.uk/commercial-property-for-sale/find.html?searchType=SALE&locationIdentifier=POSTCODE%5E1732470&insId=1&radius=0.0&displayPropertyType=commercial&businessForSale=&minBedrooms=&maxBedrooms=&minPrice=&maxPrice=&areaSizeUnit=sqft&minSize=&maxSize=&partBuyPartRent=&maxDaysSinceAdded=&includeSSTC=true&_includeSSTC=on&sortByPriceDescending=&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&newHome=&auction=false