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No worries.
Sorry for being thick,
I obviously forgot to do the currency conversion.
Strong customer demand has continued
Consumer electricals “remains very strong”
Electric vehicle revenues “continue to grow”
Medical & complex industrial technology - seeing a “healthy recovery”
Recent acquisition (DE-KA, in Turkey) “continued to trade well”
Outlook - potential impact on trading from - supply chain shortages, cost inflation of materials, freight challenges, and the pandemic
Key point - increased price of copper has been “successfully passed through” to customers
Robust cashflow in Q1
Acquisitions - pipeline is being advanced, helped by financial flexibility
Guidance raised -
Overall, whilst still early in the year, the positive trends in the first quarter lead the Board to expect to deliver full year underlying operating profit slightly ahead of current market expectations1."
1 Latest company compiled view of market expectations shows an underlying operating profit consensus of $50.0m with a range of $48.9 million to $51.0 million.
Valuation - remember that results for FY 03/2021 benefited from an unusually advantageous tax charge, hence EPS will fall this year, despite pre-tax profits forecast to be up about 20%.
Stockopedia shows a consensus of 24.6c, so that’s probably likely to rise to about 26c after today’s update. Divide by 1.39 to go from dollars into sterling, that’s 18.7p EPS.
At 340p per share, the PER is 18.2.
We also have the likelihood of more acquisitions to boost earnings further, which should be possible without issuing fresh equity, because the balance sheet is strong, with only negligible net debt reported at FY 03/2021 - here are my notes on those results.
My opinion - this company is a class act, and remains one of my core, long-term holdings. Management with a major equity stake, are doing a terrific job. There are also industry tailwinds from electric vehicles, and the 1-2 year replacement cycle of cabling in data centres.
Today’s update confirms my view that this is an excellent company, reasonably priced, trading well, and with a successful acquisitions strategy.
Plenty to like here. The price doesn’t look stretched at all, despite having almost quadrupled in the last 2 years - performance has fully justified it.
The p/e is about 18.....
A P:E of about 10 seems pretty cheap for a growth company.
AGM statement - they’re looking likely to be “slightly ahead” of market expectations for fy22 profit based on current trading.
Or are they effectively saying “inline” with a positive spin as they expect to hit top end?
All is well and shipshape.
Are we due any fresh news tomorrow do we know?!
Well worth hanging on to this share as the electric vehicle market gains traction. Luckily it’s not reliant on the uk gov pushing for more charging points. Very large international market.
And low share issue to boot.
SP weakness may be due to new shares issued re recent acquisitions. New shares commenced trading 16 July. If you still believe in the company see this as an opportunity.
Seems a bit odd that the SP has crashed ~10% after a cracking set of results and very positive forward looking statements .Perhaps the MM’s are viewing a low entry point for their clients as growth is expected from recent Turkish acquisition and also doubling of the manufacturing capacity at Batam , data Centre’s, and medical operations. Looks a bit oversold on that basis.
Qd22:
You are absolutely correct. Every acquisition has been successfully integrated and as you say we have to pay out a bit extra but gain a hell of a lot more in profits.
I wonder if we will break that glass ceiling of £4 anytime soon?
It is great news. Really happy I bought in here, I think there is much more to come over the next 5 years.
"Further to the announcements dated 30 July 2019 and 2 March 2020 regarding the acquisition of Servatron, Inc ("Servatron"), Volex plc (AIM:VLX) is pleased to confirm that Servatron has exceeded the operating profit targets for the year ended 31 December 2020.....
In addition, further to the announcement on 11 December 2018 regarding the acquisition of GTK (Holdco) Limited ("GTK"), Volex is pleased to announce that GTK has exceeded the operating profit targets for the third consecutive financial period...."
Looks like Volex knows how to both pick and integrate acquisitions. This is great news, even if we do have to pay out a bit.
The car sector are calling for a million more charging points in the uk. Imagine the number that will be required around the world. Volex are in at the beginning. Even with competition they will do very well
@sahid - me too, which is why I am not on this bb very often. One of those shares to lock away and forget.
GLA
GS
This share should motor along quite well going by the fundamentals. Great to see the overseas factories starting to produce more cables. Massive market . Icing on the cake is the low amount of shares in issue. :-).
Just bought today, looks like one to hold for the future. And to help it along also added to national grid.:-).
GSmiley
Looks like you were spot on with your ‘conservative comment in your April post!
New Broker Coverage21 Apr '21
HSBC has just started covering VLX - 425p target. IMVHO they are usually "conservative" when initiating coverage. Not that I care too much as this is a core holding for me.
GLA
GS
And reassuring to hear that Contract terms allow for commodity price fluctuations to be passed on, given the strength of copper prices of late. Given that we are very much a global business it’s an impressive set of results amidst a pandemic. Had thought of selling down recently, but not now !
My opinion - the misleading presentation of EPS has taken the shine off things for me. You can’t show an unusually high EPS figure of 32.1 cents, as underlying, when it’s not! Normalising the tax charge brings that materially lower to 23.4 cents. So slapped legs for management there!
Nevertheless, it’s still a “cracking” set of numbers, as the Chairman (with tons of skin in the game) promised us last year.
By my calculations, we should be looking at 20p+ EPS this year, due to the benefit of growth, and acquisitions. Hence at 367p currently, the PER of 18.4 looks perfectly reasonable.
There’s scope for more acquisitions, hence we should see forecasts go up further when more deals are announced.
Rising raw materials prices are not a problem, as they can be passed on - a key point to ask all companies about, as inflation rears its ugly head.
Overall then, it’s looking good, and continues to be a “coffee can” long-term hold share for my personal portfolio.
Note there is an InvestorMeetCompany presentation at noon today. They're usually recorded too.
It's been a superb turnaround in recent years, and although we might have to get used to a slower pace of share price rises in future, the outlook & valuation both seem reasonable to me.
https://app.stockopedia.com/content/small-cap-value-report-thu-17-june-2021-placeholder-824479?order=createdAt&sort=desc&mode=threaded
subscriber only
Thanks for that. Had a similar thought
If you have time suggest tune into Presentation at 12.00noon via https://www.investormeetcompany.com/volex-plc/register-investor .
Most people have an idea about the EV side of VLX
I know little about the other side of the company
It would be helpful to know more about the other parts of the the business. Eg clients , products, services, potential etc