Volvere Share Discussion Threads

[eeza] 23/3/2017 15:31

Also waiting to add.

[rivaldo] 23/3/2017 15:01

Hope so eeza, I'll be snapping their hands off :o))

[eeza] 23/3/2017 12:39

Bid dropped to 555. MM's soon be trying to force it down again.

[melf] 23/3/2017 11:01

Completely overweight here, but couldn't resist helping myself to another 2K today. As you say Riv.....the valuation is bonkers!

[spob] 23/3/2017 09:58

falling hard is a bit strong, but i see your point rivaldo

[rivaldo] 22/3/2017 14:14

This is a note to self to update the thread header post at some point for newbies.

Good to see the share price tick up on the offer despite a couple of decent-sized sells today. I notice the sells achieved a decent premium to the bid price, whilst buyers are paying near the full offer price, which is encouraging.

What a lovely share this is to hold when the markets are falling hard as they are today.

[melf] 21/3/2017 16:07

Stand corrected....thanks Riv.

[rivaldo] 21/3/2017 15:58

Melf, it's actually 79% re Impetus - see the H1 interims narrative.

Sira Defence is immaterial in the overall context - though getting more and more material! - but I do believe that given its outstanding client list, and global prospects (remember the US partnership I've highlighted) it can warrant a decent multiple on sale. Besides, smaller companies often achieve higher multiples than large ones due to their potential and to easily available synergies/cost-cutting.

[melf] 21/3/2017 15:50

Are we sure VLE only own 80% of Impetus? The acquisition RNS stated the following:

"Volvere, through a wholly-owned subsidiary, is settling certain debt obligations of IAL's parent company and acquiring the entire share capital of IAL for a total cash consideration of approximately GBP1.3 million, to be satisfied from Volvere's existing cash resources. It is expected that Volvere's shareholding in IAL will reduce through the issue of new equity to key stakeholders in due course."

I am not aware that any new equity has been issued yet or have I missed something?

[hpcg] 21/3/2017 15:17

Personally I don't think you could get Sira away at 15 - it is tiny. I would say a 6 multiple, possibly more if it was a management buyout. The cost structure tells you it is just a handful of people. IMO doesn't score well on a sum of parts NAV analysis, but does on the potential for growth within a well funded corporate with proven business expertise.

[the big fella] 21/3/2017 12:40

Rivaldo - many thanks and those valuations look reasonable to me. Given the nature of the share I would expect it to trade at a discount to NAV, but the current discount looks way too much. Around £9 would not be stretching things.

[rivaldo] 21/3/2017 12:18

Big Fella, valuations are of course extremely subjective, and as EM says profits can go down as well as up! However....

Current NAV is 614p, including around 500p per share of cash.

Impetus is making £1.5m PBT, or say £1.2m PAT. Give that a multiple of say 13, times 80% ownership, equals £12.5m. Let's call this 300p per share of upside on around 4m shares in issue given Impetus is in the Balance Sheet at de minimis.

Shire is making £1m PBT, or say £0.8m PAT. Give that a low multiple of say 8 as a food producer, and you get say £6.5m. Shire's value in the Balance Sheet is basically its freehold property etc, which would hopefully contra off on sale. So on 80% ownership £5.2m is around 130p per share.

Sira is growing and making £160k PBT, or say £130k PAT. On a multiple of 15 (given its customer list and recurring income) this could be worth £2m, i.e 50p per share.

That's a total of essentially 1100p per share imo. Corrections welcomed.

[spob] 21/3/2017 12:14

This is now my biggest holding.

[kardiff] 21/3/2017 11:55

A similar consultancy/people related business to Impetus is Waterman. This recently reported about £1.5M profit and has a market cap of approx £22M.

Volvere is a very attractive investment at current share price.

K

[eezymunny] 21/3/2017 11:44

YOu have to work that out for yourself Big Fella

Impetus £1.5m pbt (with £1m in H2) (80% owned by VLE?)
Shire £1m pbt (80% owned by VLE?)
Sira £160k pbt

Put your own valuations on them, add on the £20m cash, and see what you come up with.

Mr Market is saying the subs are worth c. £3.7m in total!

I think that's a right old lol, notwithstading future trading not being so good of course...

[the big fella] 21/3/2017 11:34

So what are the investments worth, given the market cap is pretty much covered by cash?

[spob] 21/3/2017 10:59

I guess the small market cap is the reason these are flying under the radar

expect an update from Mr T,

this afternoon perhaps


not that we need it :)

[intrinsicinvestor] 21/3/2017 10:42

Well the share buyback might point to an explanation of the early trading statement. Now that the market knows the likely positive numbers, then they can deal.

[spob] 21/3/2017 10:42

bought some more myself today

[rivaldo] 21/3/2017 10:19

RNS : VLE have bought back 10,000 shares at 540p. This is the first buyback in over a year.

If that's not a signal from the company that they consider the current share price cheap, then I don't know what is!

[eeza] 21/3/2017 10:10

£15ok so far today, and the seller is still happy to dump at 570p.

[boadicea] 21/3/2017 09:33

Greenroom - You ask why it's so cheap.

The answer is probably perception, arising from a combination of factors.
First, it pays no dividend but retains all income to acquire and support its objectives.
Secondly, it is a narrow market and can be difficult to shift quickly in quantity, so unattractive to traders.
It must also be said that its constituents - the comapnies it acquires, nurtures and sells on - are not generally at the gogo end of the investing spectrum.
Finally, it reports relatively infrequently thereby failing to attract much attention.

It is therefore a non-income value position in the market. However, for those with patience to endure the (typically) two to four year cycle of its company turnarounds, it has proved to be a reliable and rewarding experience - just check the history. Evidently the Landers and their cohorts are shrewd investors and very good at what they do.

The large cash reserve means they can act quickly when opportunities arise and have ample resources available to put into the companies acquired. If they can make better use of the returns they achieve than I likely could, why should I complain about the lack of a dividend?

Re: The apparent cashing in of all their bond holdings - I think that a prudent move in the current situation. Yields are minimal on anything liquid and low risk, added to the possibility they may have in mind looking out for near term anomalous situations arising during the unfolding of the Brexit saga.

[greenroom78] 21/3/2017 09:02

Thanks Rivaldo.

I did a bit of reading on the update yesterday and had a look at the balance sheet. Thought I'd better buy and then look at it in more detail later on.

[rivaldo] 21/3/2017 08:56

Welcome G78, good to see you here. This is usually a pretty quiet thread, so it's easy to read back and research, but in essence two shareholders who had substantial stakes - and profits - called Marks and Zimmerman have been slowly drip-feeding their stock into the market for a number of months now. I'm assuming they still have the dregs of their holdings left, but that won't last long at this rate.

Since there's generally such a small free float, historically the share price would have jumped by anything up to say 25% on yesterday's news. Given the upside this would be completely justified. IMO you've got yourself a bargain!

[greenroom78] 21/3/2017 08:22

I've bought in here this morning after reading the update last night. Any reason why this is so cheap?