Avingtrans Share Discussion Threads

[rogerrail] 02/2/2016 16:05

Looks promising as far as the Nuneaton plant, but as always not a lot of info on the China facility !

[dgwinterbottom] 02/2/2016 15:04

Roger - If I remember correctly PFW aerospace was acquired by Ai4rbus to ensure their continuity of supply. It was stated that PFW Farnborough was a neglected child throughout all this so probably Nuneaton was as well. the problems with Farnborough were also if I remember quality issues that were quickly resolved. perhaps as you say the problems and their solution might well be very predictable!

[rogerrail] 02/2/2016 12:57

As the business was part of PFW Aerospace UK and RR only acquired it in 2012 to ensure supply, then chances are it was run as a fairly autonomous unit. AVG have a proven track record of turning round the PFW Farnborough business and they should be in an even better position with Nuneaton due to the closeness and inevitable synergies ( Procurement, Quality, IT, R&D, HR, Manufacturing Engineering, etc)

[bookbroker] 02/2/2016 10:41

I think if you understand why the co. was breaking even then it would be easier to believe in the logic for the acquisition!

[dgwinterbottom] 02/2/2016 10:33

Given the fact that the former RR unit was just breaking even, does this not mean that given the lower o/heads that AVG has compared to RR that may mean it could in a small way be profitable as soon as it is removed from the RR beaurocracy?

[bookbroker] 02/2/2016 10:22

Not sure why there is such negativity to the recent transaction, the co. clearly sees an improvement in its end markets, otherwise they would not have had the confidence to acquire the assets, they had net gearing of about 17% at the last set of results, with £6mln cash, so well within their means to make a transaction, clearly more scope for for cost cutting if the two operations are so closely aligned!

[rogerrail] 02/2/2016 10:13

There is less than three miles along the A47 between the Sigma Hinckley site and the RR Nuneaton site (which was previously PFW Aerospace). No doubt one will operate as satellite of the other.

[dgwinterbottom] 02/2/2016 07:31

Perhaps we will learn more when the Interims are published, should be towards the end of this month!!

[rogerrail] 01/2/2016 18:58

Cisk,Yes, your concerns have some basis , whilst the share price has reacted positively, I would rather invest more dare I say it through a rights issue.

[cisk] 29/1/2016 23:04

RR, good points - and I agree. My main concern with AVG is that they are spreading themselves very thin, engaging in multiple end markets and buying up smaller companies, all of whom seem to be at break even.

It requires investment - and above all, management time - to turn these around. I'm just concerned whether AVG has that time and investment pot to do so.

I hope they do; I only have a small holding now at present but would like to repeat the success of holding several years ago when the shares did very well.

[rogerrail] 29/1/2016 19:21

Cisk, Perhpaps if considered as a stratic aquisition rather than on valuation and in the light of SNR's aim to increase sales to Airbus.SNR recently paid circa £50M +£10 M for the trading assets of Stieco, a direct competitor to Sigma based in the States. It is a similar size business to the RR unit albeit a lot more profitable. Sure the RR business doesn't meet the financial metrics that SNR would require to make it an attractive proposition.As part of RR this is no doubt a high quality operation and would have been a good fit with Stieco and SNR's other fluid handling operations, but also as part of RR costs were probably not tightly controlled.Compared to the price paid for Stieco, SNR would have had significant headroom to invest in the business which no doubt would have placed it at the cutting edge of its sector.

[dgwinterbottom] 29/1/2016 15:05

Hi Roger - thanks for that I now follow your thinking. As you say it depends on how well it can be integrated in order to become profitable from its current break even status. it could give them a good lead for other critical industries such as Nuclear perhaps. I feel the game changer will be the acceptance of composite pipes/tubes in a few years time

[cisk] 29/1/2016 13:34

RR, not sure senior would be interested in a £3.5m acquisition, although if AVG manage to reach critical mass, they might be interested in the whole company...

[rogerrail] 29/1/2016 13:28

DG,

Obligated from a commercial perspective considering the implications on current Sigma operations from competition for future business if it was sold to another OEM such as SNR.

[dgwinterbottom] 29/1/2016 12:54

Roger - In what sense do you believe obligated?

[rogerrail] 29/1/2016 11:42

Yes, a hugely significant development, a very size able operation near doubling the number of employees employed within tube manufacturing and one that the management were all but obligated to acquire

Hopefully they can achieve similar profitability to their other tube manufacturing operations , with perhaps some opportunities for economies of scale and operational synergies.

[dgwinterbottom] 29/1/2016 07:21

Very interesting.............

Acquisition of Rolls-Royce pipe manufacturing business



Avingtrans (AIM:AVG) is pleased to announce that Sigma Components, which forms Avingtrans PLC's aerospace division, has agreed to acquire Rolls-Royce's internal pipe manufacturing businesses in Nuneaton, UK and Xi'an, China for £3.5m, which is being funded by the Company's existing debt facilities. Avingtrans designs, manufactures and supplies critical components, modules and associated services to the aerospace, energy and medical sectors



Sigma has developed a strong relationship with Rolls-Royce over a number of years, by supplying components for numerous engine programmes.



As well as strengthening the Group's UK manufacturing footprint, the Chinese facility complements the Group's existing operations in Chengdu and will further enhance Sigma's offering to global aerospace OEM's in this key growth region. The acquisition will also reinforce the Company's position in several key engine programmes - notably the Trent XWB - and provide a strong platform from which to grow sales across our wider product range.



Sigma will use the combined capabilities of its UK and Chinese facilities to offer competitive commercial terms to Rolls-Royce, as the XWB programme grows rapidly. This acquisition will grow Avingtrans' Aerospace sales significantly, as Sigma continues to strengthen its position in the core markets of pipes, ducts and fabrications.



Rolls-Royce's internal pipe manufacturing business employs 132 people at its Nuneaton facility, with an additional 110 personnel working at its Xi'an site. Operations will continue at both sites following the completion of the deal.



At completion, around the beginning of March 2016, the acquired assets are expected to be £3.5m and, in the previous financial year, to December 2015, the business traded at an approximately break-even level.



Steve McQuillan, CEO of Avingtrans, said: "This acquisition is a key part of our strategy to support Sigma's growth with investment in businesses and technologies that complement our existing capabilities. We are delighted to be working with Rolls-Royce on these major programmes."

[rogerrail] 27/1/2016 09:06

thanks DG.

can understand the Numis stance , but I agree with Mr King, sometimes orders such as this can be significant for other reasons!

[dgwinterbottom] 26/1/2016 15:06

Hi Roger - there may not have been RNS, let me explain.

At the last AGM it was raised by one of the shareholders that there was little or no updates ie: Pre Close Trading statements etc. THE FD Stephen King stated that the reason for this was that their broker Numis were very particular about issuance of RNS statements and would only allow such notices if they referred to significant orders that would have material impact on results in the future etc. He described them as being somewhat "picky"

I hope that answers the question!!

[rogerrail] 26/1/2016 12:45

and Crown continuing to recover strongly:



18000 Sq ft is about 41mx41m square, a fair size for fabrication facility.

[rogerrail] 26/1/2016 12:43

don't recall RNS for this , but Maloney still coming up with the goods with another contract despite the slump in oil price :

[bookbroker] 26/1/2016 11:01

And we know that they will warn on the returns on their oil market related interests, that is inevitable, frankly a small niche business like this should not even be involved in that sector unless they have an unbeatable offering, they have had plenty of time to act, so no excuses, but there will be!!!!

[dgwinterbottom] 25/1/2016 15:05

Given the share price fall over the recent weeks, albeit there is a reference to China but that to my mind has no effect on AVG. As the Interims are due out in a few weeks time, I wonder if this is a MM tree shake?