Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
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It's kind of bitter-sweet isn't it.
Your costs will moderate but your market will shrink.
That will be good for volex unless they have locked in contacts for copper .
Copper plunged to a 16-month low on broad recession fears and particularly worries about a China slowdown due to Covid lockdowns.
This is something that the majority of companies have especially when growing. Most would not survive if they didn’t have debt facilities . Good result and the future looks very good in my view. Don’t think this share is for the get rich quick boys.
MORE......of a very long posting - too long to post here
EPS fell, but that’s because of last year’s negative tax charge, which we already knew about, so no surprises there. Underlying EPS rose 6.3% once this tax effect is stripped out.
Underlying diluted (for share options) EPS was 25.2 US cents, or 20.6p in sterling.
Stockopedia shows 25.9 US cents broker consensus, so a slight miss, but a note from Liberum this morning says the results are ahead of its expectations. So I’ll probably just view it as in line.
PER is 11.7, based on FY 3/2022 actual EPS of 20.6p - that’s great value for a resilient, growing group.
Of course, earnings are likely to continue growing (organic & acquisitions), and a new 5-year plan is announced, with a target to double revenues to $1.2bn by FY 3/2027, at a operating margin of 9-10% (similar to what is currently being achieved). Hence there’s scope for this share to double earnings, and I suggest, re-rate onto a higher PER than 11.7 also, giving the possibility that this share could double or triple in the next few years. Also bear in mind, it over-achieved against the last plan, and has established a track record for making good acquisitions, which is not reflected in the current valuation.
Cost inflation (copper, plastic & wages mainly) is passed through to customers, with a lag, since contracts already factor in price rises either quarterly or annually. Copper rose a lot in 2020 & 2021, but has more recently been falling. Volex took all that in its stride, so this share looks a lot safer than many investors imagined, with chat on bulletin boards often focused on the price of copper, and some people selling the shares because they wrongly imagined it would hit profits at Volex.
Broker forecasts - have been set quite low, with only a modest increase in EPS for FY 3/2023. Today’s update that the new year has started strongly, and the benefit from 4 acquisitions made in FY 3/2022, suggests to me that the risk of a profit warning from Volex looks relatively low.
Balance sheet - net debt has shot up to $74.4m, to fund acquisitions, but is not alarmingly high. NTAV is fine, at $78m.
My opinion - there’s a lot to like here. Macro worries, and investor fear, seem to be throwing up bargains right now - we’re finding new ones almost every day here at the SCVR.
Volex is performing well, has tailwinds from growth in its key markets (especially EVs), is passing on cost increases to customers, and clearly has excellent management with big skin in the game, delivering well on its expansion plans. Yet we can buy this for a PER barely into double digits - that’s a clear opportunity in my view.
Once markets are more settled, then I imagine this share could be 50% higher than it is now, and longer term, considerably more than that, due to the organic & acquisitive growth. Unless something goes wrong (which is always possible), then this looks a very attractive GARP (growth at reasonable price) share right now.
As with everything, I’ve no idea what the short term share price is likely to do, as that’s sentiment-driven.
https://app.stockopedia.com/content/small-cap-value-report-thu-23-june-2022-placeholder-949679?order=createdAt&sort=desc&mode=threaded
Topped up this morning first thing! Should have kept my powder dry :(
LT looking good though. Hey ho!
debt being more than I would like - they have been acquiring new business though so it is what it is in that regard . Particularly like their comments about doing more complex jobs and their global footprint helping ref near shoring being the way to go for now.Seems clear to me they are in fine fettle and the stuff they do must be adding value to what their customers get - it’s clear they have a moat
what - theres a massive increase in net debt. don't think the mms will like that
There’s confidence for you amongst all the doom and gloom around !
It’s day after tomorrow mate….and sure it will bring great news. This company is just massively over looked…one of best run out there. Good luck
Hopefully tomorrow will bring good news
Well, I'm following Mr Rothschild and added to my holdings today.
With the firm on target to achieve its 5 year plan, it looks ripe for an opportunistic buy out
Not a holder but on my watchlist for some time. The reason this is going down is the same reason that most other stocks (particularly smallcaps) are being destroyed at the moment. Its not stock specific. Its all to do with investors moving to risk off (go to defensives, commodities, cash etc) and people discounting future cashflows due to inflation. The question you have to ask yourself is, can Volex pass heir increased costs (from staff and material cost increases) onto their clients and maintain or even improve current margins. If they prove they can over the next year, then the valuation will likely recover.
I keep reading the last update and the drop makes no sense. For that reason I am not going to invest more as I cannot see any reason for current drop so I have no clue as to how far it will drop and whether something is going on that I am not aware of. Ifthere has been no material change in outlook then this will surely bounce though sadly maybe only to bring me back level
Wish I had cash now
Agree Nice to see blue for a change lets hope we can manage to stay blue by the end of the day
Agree Nice to see blue for a change lets hope we can manage to stay blue by the end of the day
Thought this was only moved by the forces of gravity - my gosh the last few days - WT... !
Flummoxed
Nice to see it's going the way that it should be going.
Sorry my mistake I bought at £2.84 thankfully not £3.50
Even though I know shares are driven by sentiment and there can be no rhyme or reason for shares rising and falling at times I am still at at loss with Volex. The share was trading at £4.50 - £4.77 in Nov 2021 there is a continuous drift downwards and I thought I was getting in at a good price at £3.50 we get a trading update which states results ahead of expectations and yet we continue to fall. I will just hold and see how it pans out but will always remain at a loss as to why.
yep...better to reflect on lt profitability in highly cyclical industry
we are close to top of profit cycle imv...only way is down lol
tp 1.20 for oversold bounce
Just shows how Much use charts are. Down 15% a few days later
From the TU, they have clearly demonstrated their versatility and ability to steer the ship through extremely difficult macro environ.
Management is excellent.
Pricing power very strong
No supply constraints issues
Strong tailwinds
PE - c 13? cheap
Would not surprise me if more II's or Downing load up more given how re-assuring the TU was.
Spread is peanuts so can always dash in and out with minimal fees.
MM gapped up on TU day to starting price of 276p - so not many recent PIs, including myself bought below than that (many like me were sitting on the sidelines), given that many were expecting inflationary narrative and supply constraints blah blah narrative to pop up - no such thing!
Close to being a very strong chart buy
Dormus