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Real-Time news about Tvc Hldgs (London Stock Exchange): 0 recent articles
|wexboy: Company: TVC Holdings
Prior Post(s): 2012 & 2013
Price: EUR 0.92
I get the feeling some readers might think I was bearish on TVC in the past two years... Not at all I saw decent upside for TVC in both 2012 & 2013, and I was also very bullish on its major holding UTV Media (UTV:LN). But yeah, I was distinctly bearish on TVC's corporate governance. Management enjoys a cushy number here, and I haven't heard a peep out of shareholders about high operating expenses & the glaring lack of new (unquoted) investments over the years. Frankly, I'm astonished by the recent wind-down announcement I suspected a possible corporate event was inevitable, but not this...
And the (main) reason cited seems pretty laughable: 'the very substantial amount of Irish and international funding seeking investment opportunities similar to those sought by TVC'. So, we're expected to believe TVC's been competing tooth & nail with other Irish/international investors to provide venture capital to 'early stage & expanding Irish companies'?! I must have missed that particular investment wave myself... But perhaps the answer's staring us in the face the Chairman, Shane Reihill, owns about 30% of TVC: Maybe he just wants to cash out & move on to greener pastures? All in all, Reihill & John Tracey (TVC's CEO) have really made out like bandits bankers here:
- TVC floated in 2007, with investors actually paying a premium to NAV. This basically reflected TVC's purchase of Trinity Venture Capital Ltd. (founded by Reihill) for EUR 22.7 million, including EUR 12.5 M of goodwill. To this day, I'm mystified by this goodwill what extra secret sauce did investors think they were acquiring? A fund management business? No. [There was some talk of organizing investment syndicates, but details were skimpy & it came to naught]. The unique skills & experience of Messrs. Reihill & Tracey perhaps? If so, why the generous compensation packages ever since?
- Since TVC floated, total operating expenses have amounted to an approximate & astonishing...wait for it, wait for it...EUR 22.1 million!?!
- I haven't seen all the gory details, but executives & staff will actually receive severance now TVC's glory days are over.
- Finally, I'm sure Reihill & Tracey will be back with a new venture in the none too distant future. Surely TVC shareholders deserve even a tiny slice of any future action in return for their unstinting generosity over the years?! Please sir...
But investors will probably have to make do with whatever smidgeon of porridge's left over here: NAV now breaks down to EUR 67.3 M of cash, a 27.5 M stake in UTV Media, a 5.6 M unquoted 24.4% stake in CR2 & 0.6 M in net working capital. We should revalue the UTV stake, plus we'll add a full year's worth of operating expense (to be safe). There's also outstanding options the last annual report listed 2.5 M options outstanding (with an average EUR 0.80 strike), but management's presumably snaffled up more since then. In fact, the proposed 91 M distribution's noted as equivalent to EUR 0.95 per share on a fully diluted basis, suggesting 4.3 M options are now outstanding. Oddly enough, there's no mention of any option-related cash inflow 3.4 M of cash (say) isn't to be sneezed at shareholders would do well to track it down... I'll simply assume it's soaked up by fees, expenses, severance, cigars, fine cognac, etc:
(EUR 67.3 M Cash + 9.6 M UTV Shares * GBP 220.25p / 0.8135 EUR/GBP + EUR 5.6 M CR2 Stake + 0.6 M Net Working Capital 2.8 M Op Expense) / (91.5 M Shares + 4.3 M Options) = EUR 1.011
TVC's only marginally undervalued at this point, but it's still interesting as a specific event-driven opportunity. Management promised a EUR 91 M capital distribution to shareholders in cash & UTV shares (equivalent to EUR 0.95 per TVC share) for July. Assuming the cash component (63.5 M) remains constant, we're now looking at a total distribution of 90 M (or EUR 0.935 per share) based on the current UTV share price. [Implying a 7.6 ct post-distribution NAV - equivalent to management's 9 ct indicative NAV, after adjusting for an additional 0.9 M of operating expense I've included in my NAV calculation & some rounding]. Go long TVC now, and your main exposure's UTV Media price risk. However, UTV's now a much smaller NAV component, plus I reckon it trades close to fair value at the moment it might be worth a flier for the next few months, otherwise you may wish to hedge your exposure with an appropriate UTV short position.
Assuming a EUR 0.935 distribution's locked in, you'll realize a small profit vs. TVC's current share price & also enjoy a free bet on TVC's residual value essentially, the eventual realization of its current CR2 stake (plus related appreciation/depreciation) less ongoing operating expenses for another few years (potentially). [Or think of it as creating a stub equity position...at a negative cost!] Either way, it promises a rather astonishing IRR, no matter how big or small the eventual payout. ;-)
Price Target: EUR 1.011
|djderry: Share price performance and company performance often diverge over long periods.|
|craffert: LBO do you think they are good value at these prices? The discount to NAV is really saying that the cash will be eaten up supporting their investee businesses in Ireland (which I tend to agree with). However, Norkom is a good company and UTV will be one of the first to pick up if the recession ends soon. My gut feel tells me that TVCH share price could double very quickly...and at least we don't have the banks beating down their door looking for debt repayment. What is your view on it as an investment at this price?|
|djderry: It looks to be at a very attractive price.They bought their quoted investments at fairly knock down prices and they've continued to plunge.Now,if that weren't enough,the share price is at a healthy discount to its NAV,whether you take cash -at- bank into account or not.I only took pass maths at school but will they have a tax loss for future year's profits.Looking at the results I just want to get more information regarding director's fees and the no. of employees,etc,before taking the plunge.|
WHAT is going on at Siteserv, the construction services company in which Niall McFadden's Boundary Capital holds 10.7 per cent?
On Monday, a bank holiday, Siteserv announced that the board had agreed that the resignation of Kevin Gallen as chief financial officer and company secretary "should be accepted with immediate effect".
Gallen, who had formerly served as finance director of quoted engineering company Unidare, was only appointed to the Siteserv board just last January. Gallen's appointment was followed shortly afterwards by the departure of Bernard McGlade, who had been a Siteserv director and its group financial controller.
To paraphrase Oscar Wilde, to lose one financial head is a misfortune, to lose two in the space of just five months is beginning to look like carelessness.
If the Siteserv share price was going like gangbusters then its boardroom comings and goings would be of interest only to corporate governance junkies. But it isn't. Floated last November at 0.55 the share price peaked at 1.36 on January 9. Since then it has been downhill as investors grow increasingly nervous about the construction sector.
By the end of last week the share price was back down to the flotation price of 0.58. While the group recently reported pre-tax profits of 5.3m for the year to the end of April it has net debts of 44m while the asset side of its balance sheet largely consists of 53m in goodwill as against tangible assets of just 2.7m.
Further spooking investors was the revelation in the preliminary results announcement that the operating environment in the residential construction sector -- Siteserv's core business -- was "challenging". Until the outlook for the construction sector becomes clearer investors would be well advised to give Siteserv shares a wide berth.|
Tvc Hldgs share price data is direct from the London Stock Exchange