Victorian Plumbing Share Price (VIC)

Dipped my toe in the water here today having been watching for a while.

P/E, PEG, ROCE, cash in the bank and a reasonable dividend all make for good reading. A profitable company during turbulent times and as AIM shares go, a low spread. Above all, directors with skin in the game.

Maybe not a trading share, but with the new distribution centre well underway and continued growth, the dreaded FOMO kicked in.

From a cash perspective the company is looking incredible, but I'm just curious on whether the company can continue the momentum from Covid, and gain a larger market share. I plugged some numbers into my valuation template and forecasts a 30% growth for the next 5 years, with the new warehouse and facilities being built. We're looking at a potential value of £2 per share, I believe this needs to take consideration of the next earnings, and will be the catalyst.

The markets currently pricing in a 11.5% growth rate for the next 5 years, putting the share price on track, which looks reasonable.

If you believe that purchasing bathrooms online will grow more than 11.5% over the next 5 years then this is a strong buy, but considering companies like eve sleep and purple bricks who tried the transition to pure online selling and failed then this is a speculative.

I believe the next earnings report will answer many questions, with a key focus on what they are doing with their cash and will they exceed growth targets. However, there growth strategy seems like its working, I'm sitting on a weak buy

Stock Ticker VICTORIAN PLUMBING GROUP PLC (XLON:VIC)

Current share price £0.83

52 week high £0.95

52 week low £0.33

Growth Rate (yrs 1 -5) 30%

Growth rate (yrs 6 - 10) 15%

Discount Rate 10%

Terminal Value (multiple of FCF) 12

Year 0 Free Cash Flow £14.00

Stock based compensation £3.90

Net Cash/(Net Debt) £35.50

Shares outstanding 325.2

Present Value of Future Cash Flows (Millions) $568

Intrinsic Value (Millions) $603

Intrinsic Value (per share) $2

Current Margin of Safety % 55%

Margin of safety

10% $1.67

20% $1.48

30% $1.30

40% $1.11

50% $0.93

...from 93p to 69p in 3 months, during which time we've had a strong trading update....
Bizarre.

£5 mill sold. Negligible bought. So SP fall no surprise..

and also sub 34p as recentlyas Oct - made a fair bit and out for a pullback which no doubt will come later in the year.