Avesco Share Discussion Threads

[fruitninja84] 07/10/2016 11:52

As an overseas earner this is really starting to look interesting now imo.

[paulypilot] 07/10/2016 06:30

Love this song, the 8th day! cheese!

[quepassa] 06/10/2016 10:24

Normal pattern perhaps for Avesco.

A big jump up on news (this time Presteigne) followed by some consolidation and an inevitable little profit-taking.

Doesn't concern me personally at all. I remain resolutely bullish on Avesco.

ALL IMO. DYOR.
QP

[qs99] 06/10/2016 08:49

indeed, no harm in getting the profit takers out of the way, let's hope it finds a decent floor to move on from .....

[michaelmouse] 05/10/2016 15:18

I think there's a few of us on here in the same healthy position BF. Well done.

[the big fella] 05/10/2016 15:14

I have held these for a number of years and fortunately i have reinvested the returns over the years. One of my best performing shares in my ISA

[michaelmouse] 05/10/2016 15:03

Healthy pullback.

The beauty of this company now is the huge strength in it's balance sheet. It's always had quality tangible assets some of which have now been turned into cash.

Excellent options going forward.

Lean company with good growth prospects. Rising dividends. Profitable. Cash generative. Outstanding client base. Plenty of scope for paying special dividends now they are net cash. Possibility to realise even more value from the sale of mclcreate. Possible sale of the whole group.

Combination of options above make this a keeper for the long term.

[the big fella] 05/10/2016 14:51

Hopefully it will find a floor around £3 before the next leg up. Almost back to the levels before last Fridays announcement

[qs99] 04/10/2016 14:48

£ weakness against the $ should IMO materially help AVS earnings..

[qs99] 04/10/2016 12:11

yes thanks all, good to keep the interest and information flowing. Not sure I have added much! But showing good strength again today IMO....I am sure IMO that directors have held a bit back just in case, I would, so if trading continues as reported, or even slightly better, it will leave room for further upgrades....DYOR etc lets see
cheers

[interceptor2] 04/10/2016 09:17

QuePassa, It was a very interesting post and full of detail, thank you for taking the effort to post your thoughts.

FWIW, AVS don't issue many trading updates, but there is still a chance of another one after the 30th September year end if the Paralympics have made additional contributions to results.

[quepassa] 04/10/2016 08:23

Thank you very much for the positive votes on my post no. 2007. - Appreciated.

QP

[qs99] 04/10/2016 08:04

be interesting to see if this can kick on from here....may be a while before the next update...IMO

[gdjs100] 03/10/2016 21:22

Ok, I see. Operating profit is always before tax and financing costs.

[michaelmouse] 03/10/2016 20:54

My figures in the blog are post tax. Check the 2015 full year figures yourself.

"I don't mean to nit pick here but the numbers are significant to the valuation."

No they are not since my blog gives a pretty wide range of possibilities.

In the short term my personal view is that the shares should be around the £4.50 mark as a minimum based on a variety of valuation models.

Longer term I am even more optimistic.

[discodave4] 03/10/2016 18:57

QP - Post thumbs up!Not a holder (yet), was going to buy today but dislike buying into a rise, so hopefully will pull back a tad tomorrow (no offence holders).GLDD

[gdjs100] 03/10/2016 18:25

I don't mean to nit pick here but the numbers are significant to the valuation."Without Presteigne then operating profits for the group would have been £5,633,000 or 30p per share putting the group on a p/e ratio of 10 (2015 figures)."There are around 19m shares in issue so EPS of 30p implies £5.7m post tax profit, roughly in line with your operating figure (i.e. pre-tax).

[michaelmouse] 03/10/2016 17:54

gdjs100 - In a previous post you mention that I didn't deduct tax in my blog projections. I did. I deducted the 2015 figure of £854,000. All my calculations used the 2015 figures. This is clearly too low looking forward. However, it doesn't diminish my wider point about the leaner company going forward and I stand by my possible future price projections.

Let's take Edison's normalised fully diluted EPS figures for this year and next.

They are predicting 21.5p for the year just ended, and 27.3p for 2017 (EOY September).

That's growth of 27%.

Applying a p/e ratio of 20 to current year earnings gives a share price of £4.30.

Of course if they can continue with double digit growth then a p/e ratio of 20 is not unreasonable for 2017 earnings i.e. share price of £5.46.

Given the quality of the assets, balance sheet strength and progressive dividend policy, I can quite plausibly see Avesco trading on a higher ratio than 20.

[qs99] 03/10/2016 14:15

Paul Scott email just out is bullish on AVS....DYOR etc, but he likes the deal and is looking to hold on for £4-£5.....interesting read...also he talked of this disposal possibly raising the prospect of a trade sale? All interesting stuff and helping share price push higher...DYOR etc.

[qs99] 03/10/2016 14:06

thanks for the link, very interesting and IMO the EV/EBITDA ratio as well as the EBIT ratio does make it compelling, DYOR but edison may have helped the rise this am which is great. Forward p/e of c.11 with the business moving into a net cash scenario IMO looks attractive ......will hold for Jan update....hopefully it will be nearer £4++ by then, £:$ helping IMo as well

[cfro] 03/10/2016 13:52

I completely agree with your synopsis QP.

[michaelmouse] 03/10/2016 13:30

Dividends have been great here and continue rising.

[quepassa] 03/10/2016 13:27

Quite a lot has been happening with Avesco in the last twelve months in terms of re-focusing, optimising, harmonising, hiring, restructuring, re-shaping, re-branding the burgeoning Avesco group.


1. December 2015 - Sale of Fountain Studios.

2. May 2016 - Dimension Audio realigned and rebranded with Group logo and effectively integrated into Creative Technology - the vital and highly profitable hub of the Avesco business.

3. August - Strategic alliance/partnership announced with SBG to enable Creative to offer innovative SPORTS ADJUDICATION SERVICES which dovetail and enhance sports services offered by Creative Technology.

4. September - Sale of Presteigne announced.

5. Hiring - Several senior industry professionals hired at Creative Technology in the USA and Germany during 2016.


If you look at the "deck of cards" on the Avesco website, it becomes apparent that Fountains and Presteigne must soon disappear from the deck, leaving just Creative and mclcreate. ( COINCIDENCE - as I write Presteigne has just this morning gone from the website!)






As an aside, this begs the question of what is in store for mclcreate.

Personally I see two options. Either an outright sale or a full integration into Creative Technology as there appears to be a clear overlap of services provided by mcl and Creative.

Mclcreate may be a useful incubator for cross-selling and friending customers who may wish to upscale events into the larger projects generally handled by Creative.

On the flipside, mcl whose turnover increased last year to £14.4m, produced a lowered trading profit of just £200k.

Management may be wondering whether their management time justifies the minimal income derived from this subsidiary and whether mclcreate provides an acceptable return on capital.



In respect of the big changes during the course of 2016, I cannot believe that this series of events is haphazard or without careful planning and foresight.


What we are witnessing in my opinion is a clearly focused strategic plan of refocusing the business onto its core strengths of being a " leading international supplier of AV services for live events, including concerts, press and product launches, exhibitions, tv productions and sporting events".

The peripheral businesses where profitability/return-on-capital were, perhaps, marginal and which may have been a drain on management time are being managed "in" or "out" of the Company either by sale or by full integration with an increasing emphasis on brand harmonisation, brand marketing and brand awareness using the CT name, image and logo.

This is, in my opinion, excellent news and will help the Company to be highly streamlined, focused and perhaps better understood not only by Avesco's present and future client base but also by investment communities. These actions will undoubtedly help to drive a significantly higher return on capital, allow management to focus full attention onto the profitable parts of the business and to grow those profits greatly.

We are likely seeing the emergence of an embryonic transatlantic powerhouse in this specialist field of AV services with strong operating units in both the UK and USA supported by a growing network of branch agencies in other continents and within select Europe.

These are very exciting times at Avesco.

And indeed, these are very exciting developments at Avesco who are clearly upping their game and becoming highly focused on what are very innovative, new and GROWING markets.

I remain a big fan of Avesco and have great respect for the strong management team spear-headed by their outstanding Founding Executive Chairman.

An exciting future lays ahead for Avesco.


ALL IMO. DYOR.
QP

[qs99] 03/10/2016 12:58

I wonder if the yanks will try and move in on the open over there?