Vantis Share Discussion Threads

[isis] 27/1/2009 10:33

Something weird about this Company - can't quite put my finger on it yet though.

[targatarga] 27/1/2009 10:26

sorry boys but i'm out. Stonking loss but moving on. good luck

[romi2nikki1] 27/1/2009 09:57

agreeable

Yes, the companies that offer IVAs and PTDs eg Invocas, have mentioned that banks would rather enter into Debt Management Plans, that way there is no impairment on the banks balance sheet.

[egoi] 26/1/2009 11:32

Trouble is agreeable these TNO results are now in the past and clearly TNO have hit really tough times, while insolvency business at VTS anyway I suspect will be doing just great. -:)

[agreeable] 26/1/2009 11:20

Speaking to an insolvency specialist on Friday he said business is very slow, the banks are holding off because there is no money around to fund the buy outs so no point making co. insolvent if no exit. Suggests VTS will struggle. As for egoi comment on TNO, their results were much better than VTS and much less gearing.

[egoi] 26/1/2009 10:37

Not surprised to see TNO struggling, wouldn't be surprised if they have a succession of warnings imminent, TNO don't have the necessary diversity that VTS can offer imho.

[romi2nikki1] 26/1/2009 10:25

job cuts at Tenon



perhaps accountancy firms might consider lending staff to HMRC, and thus avoid dual cost of losing staff. Ha! Ha!

[egoi] 16/1/2009 16:36

Thanks Alpha.

[alphahunter] 16/1/2009 15:59

IC says Buy in a one-column article, and basically reports the interim: "Profit down because investment in staff for biz recovery services & change in revenue stream" (e.g. more business recovery workload not yet completed). Expects "payments to probably increase in H2".

[egoi] 16/1/2009 14:42

Look forward to VTSs responses Alphahunter, I can't tell you what a relief it is to have some intelligent analysis on the thread, regardless of whether you come out pro-VTS or one of the others doesn't bother me; after years of irksome blinkered drivel imho from our pal!

Persistent small stream of buys today; wonder if IC had something positive to say?

[alphahunter] 16/1/2009 13:28

Again I am new to VANTIS / TENON / BEGBIES TRAYNOR but looking at VTS and TNO sets of statements & annual report, Tenon looks better managed at first sight.

In particular if you look at page 38 of TNO's annual report to June 08 (segmental division), the "TURNAROUND & CORPORATE RECOVERY" mobilised £13.8m of "trades receivables and amounts recoverables on contracts" for a turnover of £82m, or 2 months worth of business. At group level all segments, the number is 3.4 months.

In comparison, Vantis for the whole business (no breakdown given) mobilised £65m for a turnover of £95.5m (october 07 to october 08)or 8 months worth of business. They explained "predominantly" the rise with the growing proportion of recovery / insolvency business.

I recognise that there might be some seasonality in cash-flow generation hence June & october not comparable & the two cos may have different factoring policies - if any. Yet the difference is striking.

I am waiting for a reply from Vantis with the breakdown of trade receivables by segmemt and by nature (WIP not yet invoiced and receivables invoiced).

Vantis trades at say 4.5x eps versus 7.3x eps for Tenon.
Yet add back the debt, VTS's firm value is £76m and £93m for Tenon.
INVESTORS CHRONICLE's pretax forecast is £8.3m for Vantis (April 09) & 11.4m for Tenon (June 09), that put Vantis at 9.2x vs 8.2x Tenon. Given that VTS's existing debt is an impediment to growth (through acquisition or via rising WC requirement), I would go for Tenon at this stage.

What are the views of Begbies Traynor, apart from "more expensive but 80% of biz in revovery and insolvency".

Alphahunter

[agreeable] 16/1/2009 11:42

TNO announcement today shows you why I think this has a better business model than VTS.
VTS has now had two going concern notes on its auditors report in 18 months, this is not a sign of a well managed business.
The answer is not to find a new lender but to bring working capital under control, but I fear they cannot do this as they are I suspect pre-billing.
I have already highlighted this company's practice of pro-forma invoicing, with the actual invoice only sent when the money is paid, this is a device to avoid paying VAT until money is received and is poorly viewed by HMRC.
This company will run out of money IMHO

[egoi] 15/1/2009 12:05

Alphahunter agreeable has been erm 'promoting' TNO at the expense of VTS on here for years; as well as looking for every conceiveable thing in VTS he can find to criticize, however obtuse or pernickety. Note he goes back to '07 to find something to criticize this time.

Think it might help you to realise his angle on the company.

Fwiw, I do not currently hold VTS shares but find agreeable's ceaseless one-sided posts over many years a tad tiresome frankly. Don't recall him ever saying a good word.
I have criticized VTS at times in the past on here, as well as praised them, but in the current climate I reckon overall they are holding up very well businesswise, especially when you consider the performance of banks and other financials.

[agreeable] 15/1/2009 11:41

for a business such as this payroll is 70% of the cost base, so if creditors have increased it is either VAT and NI or share of revenue deals on income recognised but not received!!!

[alphahunter] 15/1/2009 10:56

Ooooooooooooops Debtors on the asset side, not Creditors.

Are you worried the Creditors increased? That's a small fraction of their T/O and for a people business, it probably is some VAT, some NI contribution, and bits from the suppliers of "other operating charges" (operational lease?) in the yet again not broken down P&L.

[agreeable] 15/1/2009 10:55

Alphahunter
They now all seem to be up to date, but interesting if you look at some of the subs accounts e.g. vantis sports solutions
Turnover in year ended April 07, £1m, trade debtors £1.5m including sums recoverable under contracts
this suggests to me they are pulling forward revenue on contracts where there are deferred payments due e.g. trade a footballer and club pays fee over 4 years, they appear to book all revenue this year
I suspect this is why the whole group debtors position appears so out of skew with the trading, they have historically booked deferred revenue through the PandL
This is questionable even in growing market environments but when markets turn down it is disastrous
Also from talking to a number of other recovery firms they say that as everyone has geared up their recovery divisions people are taking on work just to cover costs, so they may be busy but may be taking on work at low net margin, plus they get caught by the working capital on deferred income streams.

TNO with Bob Morton at the helm seems to have sorted out their problems and seem a much tighter ship with much better working capital utilisation

[alphahunter] 15/1/2009 10:45

Hi romi2nikki1,

"The increase in the Creditor side in VTS ints., rather more alarming than the Recievables side?".

"Creditor" and "Receivable" are both on the asset side and pretty much mean the same thing, if I am not mistaken.
Vantis says "£5.3m investing in working capital predominantly for expanding the recovery biz". Strictly speaking, they have "invested" £7.0m as seen in the cash-flow statement and increased their payables by £1.6m. As to why it does not match the delta in opening and closing balance sheet is probably down to changes in perimeter, if any.

What we would need is a breakdown between "work in progress" and "trade receivables". The former is work done, not invoiced yet and booked at cost (man x hours, completion rate,...) and is relevant in long-cycle assignements like recovery biz. The second is work done & invoiced at price and has not been paid yet by the client. An increase in the latter would be worrying particularly as the non recovery biz contracted over the period. Trade receivables that stay there for too long can turn into dubious debts. I'm not suggesting this is the case.

Would you mind putting snipset of DS's note on the board or PM me. I would greatly appreciate.

[romi2nikki1] 15/1/2009 10:10

I scour the net on a periodic basis, looking for anything negative on Vantis. Nothing much since HMRC fuss, and what became of that? So apart from Guardian articles, about VTS advising on staff ripoff schemes in the catering trade_ nothing. Interesting that TNO is percieved as a slightly better prospective employer ( graduate choices.

The Daniel Stewart note re PBT very much the same as Edison note of 10.10.08. Interesting to see whether the working cap position at TNO worsens. TNO expanded Recovery side, by acquisition in a short space of time.

The increase in the Creditor side in VTS ints., rather more alarming than the Recievables side?

[alphahunter] 15/1/2009 07:36

In the FT this morning

Recovery unit supports Vantis
By David Blackwell

Published: January 15 2009 02:00 | Last updated: January 15 2009 02:00

Growth in its business recovery division helped Vantis, the accountancy and professional services group that caters for small and medium-sized enterprises, to offset a decline in its corporate finance business.

Nevertheless, pre-tax profits for the first half to to October 31 fell from £6m to £4.6m, and operating profits from £7.7m to £7.2m, although revenue edged ahead from £46.9m to £48.3m.

Paul Jackson, chief executive, said the results showed the countercylical business model was working. Business recovery - which includes acting for companies in administration - accounted for 25 per cent of total revenues, up from 20 per cent.

Daniel Stewart, an independent broker, is forecasting flat adjusted full-year pre-tax profits of £11m, putting the shares - down 1p at 68p - on a prospective multiple of 4.6. David Blackwell

[alphahunter] 15/1/2009 00:38

Hi, I'm new to Vantis and this is my first post on advfn.

Vantis is cheap on paper, as it trades at 40% of T/O and a PE of 6-7x, with some resilience in the business mix. Some commentators raised the cash-flow & debt issues and quite frankly this is also the first bits that sprung to my mind when I read today's statement. VANCO is still very fresh in my mind.

"£5.3m investing in working capital predominantly for expanding the recovery biz."
I would have expected the whole of incremental WC being linked to the recovery biz since the rest of the business is flat or slightly down. Is there any potential bad debts hiding? A breakdown and maturity of the trade receivables would be welcome.

"£0.5m for deferred consideration". How much is left assuming all acquired biz hit their targets?

The amount of cash tax paid as shown in the cash-flow statement doubled vs H108. Why?

"The decline in margin results from increased volumes of business recovery assigments in progress but not yet completed together with...". Fair enough, but what are the margins in business recovery assignements once they are booked through the P&L?

"bank covenants", have Vantis disclose them?

I'll fire these questions tomorrow to Vantis, but if anyone already has some answer, please be my guest.

Alphahunter, aka Alphatracker
Currently long in IMG, shame that Steve Jobs announced tonight that he is stepping down for six months.


PS: Agreable, you posted "interesting also to go onto companies house site to see that many of their subsidiaries were due to file accounts at end of February 2008 and are now overdue thereby risking companies house fines for directors. Not a good recommendation for a firm of Chartered Accountants, me wonders what they are trying to hide!"

Can you be specific, any links, name of subsidiaries, etc,...

[agreeable] 14/1/2009 11:28

No look again, they said cash generation was £1.5m this is not what the cash flow says, look agai

watch and wait

[egoi] 14/1/2009 11:02

Have you not noticed there is a credit crunch? -:)))

Actually the results are, as ever, better than your empty glass, by far, but again your personal little campaign continues!

What VTS actually said, all of which agreeable appears to have missed!

*

Turnover on continuing operations increased 3% to £48.3m (2007: £46.9m);
*

Operating Profit from continuing operations before exceptional costs decreased 7% to £7.2m (2007: £7.7m);
*

Basic earnings per share were 6.19 pence (2007: 7.52p);
*

Proposed interim dividend of 1 pence per share (2007: 1.5p);
*

Cash generated from operations £1.5m (2007: £1.5m);
*

Bank interest cover 3.9 times (2007: 4.2 times);
*

Business Recovery, representing 25% of group turnover (20% in 2007/8 full year) is growing rapidly and gaining market share;
*

Further recruitment of high calibre staff in particular to strengthen Business Recovery and Service Support.

Commenting on outlook, Paul Gourmand, Chairman said:

'Since the start of H2 2009, the Group has performed in line with our expectations. The growth of Business Recovery continues at a faster pace than the rest of the Group as economic conditions become increasingly more challenging. Business Advisory and Consultancy together with Financial Management continue to perform satisfactorily. Our balanced business model positions us to withstand the difficult economic environment ahead and we look forward to the future with confidence.'

In the current climate, a fine set of interim numbers, which if repeated would put them on a p/e of under 6.

Scaremongering is one thing, facts another. If agreeable was right why haven't the shares tanked this morning? Which in the current climate any company producing bad news, especially in this sector, would have done.

[agreeable] 14/1/2009 10:15

Truly shocking results
1. Once again a going concern note on the auditors report
2 A statement that the company generated £1.5m of cash from operations when it is quite clear it utilised £1,67m of additional facilities
3 On 13 Nov they announced that paul Jackson had subscribed for £2m of new shares and yet they include at 31 October £1m of shares to be issued and include it in the cash flow statement
4 Debtors have increased by over £6m
5 They are looking for new bank facilities but have not secured them yet (what kind of financial management is this for a firm of Chartered Accountants?)
This company is at risk of running out of money and it should be avoided at all cost.

[romi2nikki1] 22/12/2008 11:04

Anyone any thoughts on weakness in TNO price? Could it be the realization, that the recovery work they are doing, will take longe to be paid for?

[romi2nikki1] 12/12/2008 12:47

One of the tips of the week in Investors Chronicle

Edison note 10.10.08 states that VTS is number 6 ( source Accountancy Magazine july 08)in Business Recovery. " the gradual move away from personal bankruptcy work to mid tier corporate should enable VTS to move towards its target of 120 debtor days."

A glance at the date shows that they have a long way to go, but of course they are on a very considerable discount to TNO. Can anyone shed light on why debtor days are so big c.f. TNO? Clearly the delay in getting paid ties up a lot of working capital.