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Volex turns up heat on TT Electronics takeover

After having two previous cash-and-share offers rejected, the Volex chair has appealed directly to TT shareholders. Michael Fahy reports

Yet the one-day capitulation in TT’s share price in September was a sign that the market “seemed to give up on TT”, dashing hopes that its fortunes were turning around under its new chief executive Peter France, said Stifel analyst Mark Davies Jones.

“We still think TT is vulnerable,” he added. Although he has a fair value estimate of 190p on the shares, he thinks a “reasonable compro- mise” could be reached if the two sides can agree a deal at a price closer to 160p-170p.

Volex (VLX) chair Lord Rothschild has turned to TT Electronics (TTG) shareholders to push its board to engage with his takeover approach.

Volex has thus far submitted two potential cash-and-share offers to TT’s board, both of which were dismissed as “fundamentally under- valuing TT Electronics and its long- term prospects”. TT’s board also said it had previously rebuffed a higher all-cash offer.

Undeterred, Rothschild took his plea directly to TT’s shareholders, citing “compelling strategic and finan- cial merits”. He continued his broad- side against TT’s current and former management, stating that since 2018 they had presided over “a share price erosion of over 65 per cent prior to Volex’s interest being made public”.

TT Electronics faces several opera- tional struggles. The FactSet consen- sus forecast for the current year is for sales to fall by 12 per cent and operat- ing profit to plummet by 40 per cent. The group’s adjusted operating margin has also remained stubbornly below management’s 10 per cent target and Volex’s presentation pointed to more than £125mn of one-off charges over the past four years, including £56mn of asset writedowns, £44mn of restruc- turing costs and £26mn of M&A costs. Rothschild described TT’s recent record of acquisitions as having “very disappointing outcomes”.

Volex compared this with its own track record, where its adjusted operat- ing margin has grown from 2.1 per cent when Rothschild took over as executive chairman in 2015 to 9.8 per cent last year. It also pointed to a track record of successfully integrating deals.

Its pitch to TT’s shareholders is that they would enjoy greater upside from a combined operation. Although there is some overlap between the

companies – both offer contract manu- facturing of electrical components used in medical and industrial tech- nologies – they produce largely differ- ent products, serving different sectors.

There will undoubtedly be TT shareholders who are sympathetic to Rothschild’s criticism of management’s recent performance, but it seems he may have more difficulty convincing them that his current offer is a fair one. The latest offer of 62.9p in cash and 0.223 Volex shares per TT share was worth 135.5p, or a 77 per cent premium based on the previ

Simon Thompson has wrote WPHO up in his Alpha article.

Price target 80p

Some sudden, but very welcome buying this afternoon.

Maybe contract news imminent 🤞

I’ll admit that I’ve just averaged down too.

Delays aren’t the best, but if it all comes together in 2025, then we’ll be back into double figures.

Theoldtrader, just curious where you got that information from, thanks for sharing though 👍🏻

I took my Mom to an appointment in February, relating to her Crohn’s disease, she always has low iron (40+ years).

The nurse knew about Feraccru, but said it’s very expensive, so very selective with who gets it.

Mom didn’t because she’s borderline.

But after a recent blood test to monitor her iron levels, (as she’s on a new treatment for Crohns), she had her first prescription yesterday.

Three months worth.

1 tablet twice a day.

56 tablets in each bottle, once opened they only last 35 days if I remember correctly.

Feraccru 30mg

Iron (as ferric maltol)

NORGINE.

Nice to know they really are available on the NHS.

I’ve held STX over 4 years now, but hopefully things are changing 🤞

Institutional Investors

Nice to get confirmation, and hopefully no more missed payment dates in June.

The directors have today declared that a dividend in respect of all of the outstanding arrears of dividends on the preference shares (amounting in aggregate to 11.5p per preference share) will be paid on 15 April 2024 to holders of preference shares registered at the close of business on 2 April 2024.

Analysts at Canaccord Genuity lowered their target price on chemicals business Synthomer from 350.0p to 300.0p on Wednesday as it effectively pushed out its expectations for the group's recovery by 12 months.

Canaccord Genuity said the September 2023 recapitalisation of Synthomer had left the group "well-placed to survive the current extended downturn". However, the outlook for the current year was still for limited progress.

"We are moving numbers to the right, effectively pushing the recovery out by a year; we now expect nearly all of the improvement in 2024E to be self-help, with better figures coming next year," said Canaccord Genuity. "The impact on our valuation is more modest, given that we now look well set for a sustained recovery in the chemicals industry, and we are effectively pushing out our valuation by one year".

The Canadian bank noted that Given Synthomer's equity gearing - at the current share price, the equity value sits at around 28% of the enterprise value - even a "quite modest" improvement in outlook or the successful execution of an asset sale could have "a very material impact" on the share price

The Financial Conduct Authority is to investigate car finance amid concerns that consumers may have been mis-sold deals until 2021. Car dealers were given incentives by banks to sell expensive loans in return for higher commission

WPHO have always been very frugal with our cash, not issuing shares every few months has been an attraction of Windar.

Director has been willing to provide loans when necessary.

Today’s update, while disappointing with a revenue/ profit miss, the result will still be a record for Windar, with a new order and more expected early next year, any share price decline should hopefully be short lived.

Half year results 30th November I believe.

He must be confident of getting a good return on his purchases, certainly helping with moving the share price up.

There was an intraday spike to 50p a few years ago, so really pleased to be back here, and hopefully a good move on the next update, which Paul Hodges has more information about than us, and he’s still buying.

Oops, just noticed the fly in the anointment…

December divi deferred until April 7th but the 7p of arrears to be paid at the same time.

Well this morning’s RNS has put a rocket under the prefs.

All arrears to be paid, fantastic news, but also security increased on future payments.

Could allow them to trade closer to par now.

Only just noticed this in the TRIG interim report 4/8/23, could be Windars kit?

Blade improvements:

- Following trials at two GB wind farms of aerodynamic improvements to turbine blades, a package is being rolled out across four more sites in the GB wind portfolio, totalling 59MW of generation capacity. The package also includes a suite of software upgrades to maximise the additional energy yield gained from equipment installations and will be initially implemented at one of the trial sites with the upgrades already installed.

- Across the wider portfolio, application is being investigated, with technical due diligence for aerodynamic blade upgrades being progressed at two joint venture projects.

Wind turbine software enhancements:

- The wake steering and collective control trial at Altahullion in Northern Ireland has been completed, with testing concluded on three of the four elements. This enhancement is an innovative retrofitted upgrade to increase production and reduce turbine loads. The reduction in loads has been verified by an independent assessment demonstrating an increase in the remaining life of turbine components.

- Validation of a suite of yield-enhancing software upgrades at Garreg Lwyd wind farm in Wales has been completed following implementation in 2021, confirming a >1% increase in the energy yield.

- Results from implementation of a pitch and yaw optimization tool at Gode demonstrated an 0.2% yield uplift.

Prosperus , PF stands for portfolio

Yes I did notice, but what stood out to me was that he had all that cash in an ISA.

Obviously made some good investments in the past to build up an ISA pot of that size.

Still holding mine, nearly two & half years now, but building into some great gains now.

Large trade of 1,306,000 @ 36p late today, looks like a buy, not surprised after yesterday’s update.

“Given the above the Company expects to meet the current market expectations for 2023 including net revenue of approximately €6.5 million - an increase of approximately 260% compared to 2022 (2022: €1.8 million), and an EBITDA result of approximately €1.5-1.6 million compared to an EBITDA loss of €1.1 million realised in 2022. This would represent a record-breaking revenue for the Company and its maiden profit.

As the Company expects to see continued growth in China in 2024 a main focus for the second half of 2023 is to increase production capacity further to approximately 150 systems per month by the end of the year“

Dividend up to 3.15p per quarter a 7.05% increase.

Aiming for 12.6p for the year.

My first buy in SDV was around 84p, very happy to hold.

The only slight negative is the change of policy in that if a company delists, SDV still want to hold, but not increase the holding.