Volvere Share Discussion Threads

[the big fella] 07/10/2015 15:27

Doesn't seem to have had much effect, which is disappointing

[melf] 07/10/2015 14:25

Many thanks for keeping us informed Riv.. Did you get the impression that they are as frustrated regarding the share price as we are?

[rivaldo] 07/10/2015 12:05

On Monday I attended a presentation by VLE in London organised by Blackthorn Focus through David O'Hara. Once again, cheers David (and also to the Landers for agreeing to it):



This was of course a blue riband event - the first ever such presentation by VLE anywhere, anytime AFAIK....

It took place at one of JMP's offices, and was attended by around a dozen or so interested investors who are part of Blackthorn's investor "circle", 4 or 5 of whom it turned out were already VLE shareholders.

IMO the Lander brothers presented extremely well and persuasively. The overall outlook certainly appears to be as positive as most believe it to be on this thread.

Of course nothing of a price-sensitive nature was disclosed, but I propose to briefly outline a few points of interest:

- VLE pay no tax on disposals of investee companies due to "substantial shareholder exemption"
- new opportunities come in every day, so you can tell that the Landers are extremely picky, but it was interesting that they generally have only a maximum 2 weeks for due diligence, which makes their track record even more impressive
- VLE have no sector restrictions for investment, though they do like "people" businesses. Their methodology is very positive in that they aim to invest (via software, people, whatever) to turn the business around with the help of existing management if possible, whilst cutting out any dead wood, and of course incentivising them through 20%-25% stakes in the company
- potential investees could have revenues of between £10m-£100m
- there could be 2 to 3 company acquisitions a year under the existing management team, i.e there's capacity for further imminent acquisitions

Shire Foods
- cost £0.54m plus w/cap loans of £2m (all now recovered from memory)
- their refrigeration systems were upgraded at a £600k cost
- Shire own their freehold, against which there are loans
- I got a distinct sense of optimism as regards prospects for Shire

JMP
- 50% of revenue is consulting to local authorities, transport planning etc, and 50% is engineering, design etc
- usually has a better H2 than H1
- it was noted that Waterman (WTM) are pretty similar and have just announced excellent results

Impetus Auto
- perform audit checks for car manufacturers on auto dealers as well as aftersales services, and they provide certain software tools
- it's a people business, and as yet there have been no great "surprises" (for which presumably read "nasties"), which is good news
- it's already only mildly lossmaking post-acquisition, and again there seemed to be some optimism/cheerfulness here

I raised my usual bugbear re lack of promotion of the company and share price, whilst thanking the Landers for this opportunity, but I suspect nothing much will change.

Other points were made (again all previously raised at AGMs etc!) as regards potential special dividends, share illiquidity, share buybacks, use of shares for acquisitions if the share price were higher etc.

[rivaldo] 05/10/2015 08:28

Prestigious job for JMP per this news report:



Extracts:

"Destination Growth: The Case for Regional Railways
Submitted by JMP News on Wed,30/09/2015 - 13:21

The Passenger Transport Executive Group pteg today launches a report by JMP about regional railways in Britain - what they do now, and what they could be doing in the future. Project Director Alan Beswick explains......

This has been a fascinating job to work on. We have taken a long hard look at Britain’s regional railways and we have been myth-busting, as we unpick the idea that regional railways are the Cinderella service of the rail network, and we have been developing and then quantifying scenarios for how they could develop in the future.....

By preparing a set of theoretical but plausible scenarios for the future featuring a rolling programme of investment to revolutionise regional railways and deliver exciting and transformational change we have shown that the regional rail network could deliver benefits of as much as £10.5bn per annum at current prices. Around a quarter of this arises from increases in GDP, as a result of agglomeration benefits from bringing cities closer together and by improving access to labour markets. Cost benefit analysis shows that the investment represents very high value for money with every £1 of investment delivering £4.36 of benefits, relative to a ‘business as usual’ approach.

Just as importantly, with a concerted long term approach to investment over 30 years it is possible to both reduce operating costs and raise demand significantly. This would help move the regional rail network from its present situation of requiring a substantial level of subsidy, to one which operates close to breakeven....."

[rivaldo] 30/9/2015 15:04

:o))

A bargain price too at 422p, 3p under the offer!

[melf] 30/9/2015 14:31

That's my 50 shares gone through, just to take my holding to a round sum. Under the radar.......more like subterranean!

[mathewawood] 29/9/2015 12:06

rivaldo: Things have changed a little regarding the share price Quote is now 415p-425p so the MM's were impressed by the interims even though nothing was traded yesterday or today.

But your right VLE is well and truly under the radar.

[rivaldo] 29/9/2015 10:40

We have here:

- new share price highs
- an £11.7m cash pile against a £17m m/cap
- NAV higher than the share price with almost nothing included for the value of the subsidiaries
- brighter than ever prospects - and profitability - for the three core investees
- and a strong start for the new and fourth investee (Impetus Automotive)

Yet AFAICS not a single share was traded yesterday or today :o))

Investors are evidently happy to lose their money in resource companies, or blue sky situations, or recovery stocks with 50/50 chances of success, or....whatever.

I'm torn between wanting more recognition/activity for VLE, or being happy with being so far under the radar since it allows for top ups as and when. But it would be preferable methinks to see the share price up at say 600p+....

[eezymunny] 28/9/2015 14:49

Indeed Melf. And those businesses combined look like they might do £35-40m turnover this year. Who knows what profits they might do but if they get to the point that they can do 8% operating margins on average (a reasonable target IMO), and therefore op profit of say £3-3.5m suggests they may become worth £30-35m in total. With VLE owning c. 75% that's £22.5-26.25m to VLE. Add the cash pile and you get a reasonable target of c. £35m market cap for VLE, or £8.50/share.

Lots to do of course but risk/reward looks awfully good given the promising current outlook IMO.

Cue a rotten H2 ;)

[melf] 28/9/2015 14:26

So at the current share price we have a market cap of c£17.2 and c11.7m of cash, so the businesses are "in" at £5.5m which looks an absolute bargain imo. Still plenty to come here methinks.

[eezymunny] 28/9/2015 13:20

Checked the AR. Says those Available-for-sale assets have no fixed maturity, so can only guess that they are money market funds, bond funds of some sort, or similar. "Low risk" stuff one assumes. If there is such a thing ;)

[rivaldo] 28/9/2015 12:46

Absolutely Galles, the £11.7m cash pile includes the "available for sale investments", as EM says.

Encouraging to see Shire's revenues up by 60% yoy - it does seem that last year's seasonally better H2 was not a one-off and will likely be repeated given the new customer wins.

It's also worth noting that Impetus is second-half weighted too, and has seen its performance improve since 30th June.

If all goes well this H2 could be terrific.

[galles] 28/9/2015 09:26

Thanks EM. I wasn't sure how to treat this 'Available-for-sale', as cash or not. And whether I had missed its definition anywhere, hence my question.

I quite like JMP and the mentioning of the TfL work. Being part of the framework already means something as they would need to qualify for it, then bid and win work. That's a barrier for other competitors.

[eezymunny] 28/9/2015 08:41

I guess the 'Available-for-sale Investments' are short term gilts or money market investments. Just trying to get some yield on the cash pile. These would be marked to market at accounting dates, so

"During the first half of 2015 the Group held available-for-sale investments which generated investment income of £0.07 million (30 June 2014: £0.04 million; 31 December 2014: £0.07 million). Investments disposed of in the period realised gains on sale of £0.43 million (of which £0.32 million was reclassified to profit)"

and

"At the period end the Group had available-for-sale investments with a market value of £4.56 million (30 June 2014: £1.04 million, 31 December 2014: £0.92 million); the base cost of these investments was £4.93 million (30 June 2014: £0.69 million; 31 December 2014: £0.61 million)."

So they made some and lost some as prices moved. I think not a big deal as assume they are held to maturity. We're slightly in the dark at to precise nature of the investments.

Overall Shire seems to be fantastic. JMP OK, Impetus a promising start, and H2 outlook good for all of them. Only downer I can see is JMP "the company has been accruing a provision pending the contract's completion, which is expected in the second half of 2015".

Sum of the parts continues to look much (potentially much much) more than current market cap IMO...tho obviously if trading deteriorates that could change (no sign of that currently!).

[galles] 28/9/2015 08:30

And must say nice sets of figures and am feeling really positive about them!

[galles] 28/9/2015 08:27

What's this 'Available-for-sale Investments' I wonder?

[rivaldo] 28/9/2015 07:28

I was right - interims are out, and they're pretty good, showing a nice £0.79m PAT (£0.37m before investment gains) and a 432p NAV:



Some initial standouts:

- each of the 4 businesses are doing even better in this H2 than they did in H1
- Shire has continued last H2's form with a pleasing profit in the seasonally weaker H1
- Impetus is only making relatively small losses already post-acquisition
- JMP is making slow but definite progress, hindered this time by a couple of one-offs
- Sira is progressing, if slowly, and remains profitable
- VLE have almost £12m net cash against the £17m m/cap

I'm guessing that VW will soon need plenty of help from Impetus in helping "the effectiveness of vehicle manufacturers' sales and after-sales networks"!

One negative is a loss in value on investments in the period.

[melf] 25/9/2015 14:12

Thanks Riv......looking forward to it, particularly the news on Impetus. Let's hope it doesn't disappoint!

[rivaldo] 25/9/2015 10:11

Worth noting that the last two interims announcements have both been on Mondays.

This coming Monday is the last such in September. Alarm clocks at the ready?!

[rivaldo] 21/9/2015 10:46

Another tick up - and news that Marks and Zimmerman have top-sliced some 45,000 shares between them, thus providing the recent liquidity. Good news, and hopefully they'll be happy just to slowly dribble out more shares as demand increases.

[rivaldo] 18/9/2015 13:11

Cheers Melf.

Finally the dam has burst with a small tick up - a 500 share buy did the trick.

[melf] 18/9/2015 12:28

Looking at Impetus Automative's website, they have an impressive client list. For anyone interested in what they do, I have attached a case study for some work they did for Jaguar Land Rover. Their website is certainly worth perusing.

[rivaldo] 18/9/2015 11:20

Spob, read the bottom of my post 1896. I don't think anyone has anything more specific.

More buying coming in today.