RE: Trading update18 Mar 2026 14:20
Graham Neary's summary of the trading update on S'pediais worth a read. I was able to read the whole thing at this link - here's the conclusion.
I suspect there's more potential for Nick Lander to sell Shire and either return some or all funds to shareholders, or return some funds to shareholders before selling Shire than Graham does, but obviously that's entirely subjective and with no factual basis at all:
Https://www.stockopedia.com/articles/1047469/
"Let’s do a quick review of the valuation.
Cash and available for sale investments at year-end: £33m.
Let’s reduce this to £32m as the available for sale investment has reduced in value since year-end.
Market cap £55m
That leaves an enterprise value of about £22m.
That £22m figure is the value being given to Shire Foods on an ex-cash basis. Shire does use a little borrowing, but it also has valuable freehold properties and owned equipment. The interim results showed PPE of £7.8m.
Given that Volvere has been consistently profitable for years and continues to perform pretty well despite tough circumstances, I do think the enterprise value of £22m is on the low side. As I said above, I think that Volvere’s share of 2025 pre-tax profits is around £5m. After-tax, that's £3.8m. For a reputable food manufacturing business with freehold property, does it really make sense that it should trade on an implied P/E multiple of about 6x? I think that's pretty cheap, personally (but then I would say that!).....
....And I think the really big risk is what Volvere might do with its cash pile.
I’ve said before that I would be fine with Volvere selling off Shire (at a reasonable valuation) and returning all funds to shareholders. That remains my view today.
However, the company appears very unlikely to do that. They are far more likely to make a new investment:
We continue to review potential investments and would expect an increase in distressed businesses, particularly if cost inflation becomes evident and interest rates are accordingly held or increased. The Group's strong balance sheet means we are able to respond quickly to anything of interest should it arise.
It will be fascinating to see what new investment they might make. It has been many years since their last one - I think the last time was in 2020.
I do take comfort from the fact that they have spent so long waiting for the next investment. I can only presume that when they do eventually take a swing, it will be at a “fat pitch” - a situation where it’s almost impossible to lose money, due to asset backing, and with considerable upside if it works out. But of course, no investment is entirely without risk.
I’m staying AMBER/GREEN on this as although I do think it’s undervalued, I also think that the logical next step for it is to return surplus cash to shareholders - which it's probably not going to do."
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