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Dear Alfista,
The information shared with me by Victoria is not sensitive or inside information at all as the company has merely confirmed that what they have told the market in their RNS statements and annual reports is correct. I have also checked the Companies House records, which are available for anyone to view, which further substantiates what Victoria has told me.
There is no requirement whatsoever for the company to issue a further RNS statement to confirm that what they said in their first RNS and in the annual reports is correct. There would be a requirement for such a further RNS if what they have previously told the market was not correct.
There is nothing unusual about company name changes that occur close to the time of an acquisition when it is the business and assets that are being acquired, and not the legal entity. In fact it is quite necessary for the old company to change its name and then for the new company to change its name, if the purchaser wants to use the name of the old company.
Any innuendo, that the transactions are scams, or fraud, as suggested by the Iceberg report, and repeated by conspiracy theorists and trolls working for the shorters, are a deliberate and dishonest attempt to undermine shareholder confidence and confuse the market, in order to support the trading positions of the shorters.
Dear Alfista,
From my own research, including speaking directly to Victoria, I can report categorically that the transactions are arms length, commercial transactions, the acquisition of two long standing, profitable businesses.
If these were not arms length, commercial transactions, that would imply that the lawyers and accountants, the board, and also the auditors, were all complicit in a fraud. Hardly a realistic scenario for a UK publicly listed company.
Iceberg’s implied accusation, that these transactions were a scam or a fraud, are aimed at unsettling investors for the benefit of the shorters.
There have been three independent analyst reports recently which price Victoria shares at around double the current share price; Singer Capital Markets wrote a report and priced the shares at 1,000p in May, Berenberg wrote a very detailed report and priced the shares at 880p in July, and Peel Hunt wrote a report and priced the shares at 900p just last week.
This year’s forecast Ebitda of around £200m is simply last year’s Ebitda plus the Balta acquisition, before any synergies or organic growth, and it was confirmed by Victoria last week that they are on track for that forecast.
The total Net Debt of £936m includes (very conservatively) categorising all of the Koch Preferred Equity as debt (which it isn’t, really).
Using an Ebitda multiple of 10x, that’s a price of 917p, before any synergies or organic growth.
It seems quite obvious, with 80-90% of the shares locked up with long-standing shareholders, and millions and millions of shares shorted, that a short squeeze is coming.
Evil Kinevil, Rollercoaster Ride, BubbaBubbaBubba, what you need to realise, is that Iceberg is itself a shorter, and is almost certainly working with one of the major shorters. It’s not a coincidence that their report suddenly appeared after the major shorters had already loaded up. The report is full of misinformation and innuendo, deliberately designed to unsettle shareholders, the same way a similar report did in 2018, soon after shorters had loaded up. This is the modus operandi of these vultures - load up their short positions, disseminate misinformation to unsettle investors, and unleash trolls to make comments in chat rooms to add credibility to their outrageous assertions.
For example, the Iceberg report questions whether Ezi Floor and Hanover Flooring were even real, independently owned businesses before they were acquired by Victoria for £17m and £25m respectively, or whether these acquisitions were in fact elaborate scams. This is a ridiculous assertion, when Victoria an audited public company, has undergone full statutory due diligence processes three times in recent years, for the bond prospectuses, and again when Koch Industries invested. Nevertheless, I have researched all this very carefully and I can tell you that the facts are as follows;
Hanover was started by Batesh Karim in 1996, and when it was acquired by Victoria in January 2021 it had 15 odd employees and revenues of around £16m.
Ezi Floor was started in 2006 by Batesh’s younger brother, Saqib Karim, and when it was acquired by Victoria in October 2016 it had 25 odd employees and revenues of around £10m.
Both of these acquistions were structured as ‘business and assets’ deals, where the purchaser acquires the business and assets into its own legal entity. There were various company name changes and changes of directors that occurred around the time of acquisition There is nothing unusual about any of this when businesses and assets are acquired without the legal entity, which Iceberg knows of course, as I’m sure you do too.
I am sure that many of the shorters are starting to panic because the share price is not continuing to fall as they would have expected following their nonsense report, which was of such poor quality that I’m sure most if not all of the sophisticated investors saw straight through it for what it was.
There are millions and millions of shares shorted, while 80-90% of all the remaining shares are locked up by cornerstone and long term investors. All of those shorted shares have to be bought back, and the share price is starting to move against the shorters. It’s a classic short squeeze situation. I'm holding.