Avesco Share Discussion Threads

[liquid millionaire] 15/1/2015 07:56

AVESCO GROUP plc

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2014

Avesco Group plc ("Avesco" or the "Group") (AIM: AVS), the international provider of services to the corporate presentation, entertainment and broadcast markets, announces its preliminary results for the year ended 30 September 2014.

KEY HIGHLIGHTS

· Revenue up 2% to £126.4m (2013: £124.0m)
· Operating profit of £0.9m (2013: loss of £8.4m)
· Trading profit up £5.8m to £6.3m (2013: £0.5m)*
· Trading EBITDA up by a third to £25.0m (2013: £18.9m)*
· Continuing operations loss per share of 12.8p (2013: 41.2p)
· Adjusted basic earnings per share of 23.4p (2013: loss of 1.8p)*
· Annual dividend (excluding Return of Cash to Shareholders) increased by 20% to 6.0p per share (2013: 5.0p)
· Profit from discontinued operations of £1.2m (2013: £45.7m)

* As described in note 8, the Group uses certain non-GAAP alternative measures to assess underlying operating performance.

Richard Murray, Chairman, commented:

"With the exception of 2012 (when we had the benefit of the London Olympics in our home territory), trading profits reached record levels in 2013/14. This achievement was due to an outstanding performance in CTUS, a dramatic turnaround in profitability in Presteigne, and a reduction in losses in our developing CT Asia Pacific unit.

During the year, each of the Group's three divisions was subject to a restructuring, the benefits of which are already starting to flow through to the results.

The first quarter of the current financial year has continued the positive momentum from last year. We expect to see further benefits flow from the cost savings generated by the Group's restructuring programme, so that any "odd year" dip in profitability is minimised. With the restructuring programme now completed and substantial forward momentum in the businesses, we are able to continue our focus on increasing profitability, generating cash and growing dividends."

[battlebus2] 15/1/2015 07:55

Are you not staying up to buy more.

[gingerplant] 15/1/2015 07:33

Excellent results, undervalued by a long chalk IMO - off back to bed for a bit!

[mrx9000] 08/1/2015 15:34

Thanks chaps.

[funchalman] 07/1/2015 13:35

market cap using the correct number of shares of 18.86m is £22.63m . advfn have used the number of shares prior to the buy back.
total assets less total liabilities at 31st march 2014 is £31.48m including £7.0m
of cash or cash equivalents.
hsbc renewed credit facilities of £32.0m at better terms this year until june 2018.
always meant to have a look at the property this company owns and the value of it
on the books but as yet not got round to that.

[deanowls] 07/1/2015 03:49

The debt was taken on to buy back around 30 percent of the company from a Israeli company, details about a year ago on Rns.

[mrx9000] 06/1/2015 23:44

A few familiar names on here I see. This came up on one of my screeners.

Excuse my ignorance as this is a new company for me...

The last statement said 'Net debt as at 31 March 2014 was GBP21.7m (31 March 2013: GBP30.0m)' so why did they return such a generous amount back to shareholders, why not reduce the debt?

Also I notice that advfn has it at a mkt cap of £31.7m and sharescope has it at £22.6m. I assume the Sharescope one is wrong. Getting late so will look again tomorrow.

[battlebus2] 04/1/2015 19:01

Should still almost double from here so you certainly haven't missed the boat.

[michaelmouse] 04/1/2015 18:56

No problem tiger20. For more detail on the restructuring costs, see their interim report. In short, the vast bulk of the restructuring costs were incurred in the first half with a further £0.5m to be booked in the second half. Restructuring Presteigne Charter incurred some expense but the vast majority related to the restructuring of their CT business in Germany. All this is old news though and the key thing is that the cost savings from the restructuring are already coming through, both stronger and more quickly than they anticipated.

I'm not sure you've missed the boat though, since the market cap. is still below net tangible asset value, and the company is still cheap on any number of measures. NTAV was £1.67 at the interims, CT in North America is trading strongly, their fledgling CT business in China continues to improve as it approaches profitability, gross margins are improving and operating expenses reducing. Cash flows and dividends are very healthy. It's a profitable and healthy business trading below the value of it's quality assets. Can't be many of those around.

All the best.
Michael.

[tiger20] 04/1/2015 17:35

Michaelmouse fair comment -and thanks for info.

What are the excluded non recurring restructural costs ? we will have to wait and see.

It looks as though I have missed the boat on this one.

Best of luck on the 15th Jan.

[michaelmouse] 03/1/2015 17:24

tiger20 - The trading update was 16th December:-



"Avesco Group plc (the "Group"), the provider of services to the corporate presentation, entertainment and broadcast markets, today issues the following trading update ahead of its full year results for the financial year ended 30 September 2014.

The restructuring of the Group's Creative Technology and Presteigne Broadcast Hire businesses in mainland Europe has now been completed in line with our previous cost estimates and it is pleasing to note that the cost savings derived from this exercise are already coming through, both stronger and quicker than anticipated.

The final quarter of the year was also extremely busy for the Group, with a particularly strong performance from Creative Technology in North America.

Consequently the directors anticipate that operating profits and trading profits (being operating profits excluding the impact of non-recurring restructuring costs), before and after net finance costs, for the year ended 30 September 2014, will be ahead of current expectations. The Group's results for the year ended September 2014 are planned to be announced on 15(th) January 2015."

I don't know who gave you this advice, but I hope you didn't pay them? There will be write-downs in the January results, as flagged up in the interims and above, but they clearly state "that the cost savings derived from this exercise are already coming through, both stronger and quicker than anticipated." CT in the US is particularly strong, and the results with be ahead of expectations.

No offence intended, but did you take the time to read any RNS releases or any of the previous posts?

Michael.

[deanowls] 03/1/2015 17:07

Off the top of my head Germany has already been wiped off, they have reduced capex this year and been getting more out of there assets by changing the logistics.

Why would they write stock off more than normal accounting practises?

[tiger20] 03/1/2015 17:00

I was going to buy some of Avesco shares a month ago but was advised to wait till after there trading statement in January.

I am thinking there may be a write down of all that stock & equipment they purchased last year and also costs incurred in Germany where a lot of staff was laid off and the company hasnt done to well.

On the plus side I believe the US is doing very well-best of luck to everyone who has them and I will probably kick myself if I miss out.

Once trading statement out of the way I will be buying understand that 2015 & 2016 will be good.

[quepassa] 02/1/2015 12:02

thanks for the heads-up. Appreciated. will take a look and report back in next few days.

Good to see Avesco picking up some well-deserved speed so early in the New Year .

QP

[battlebus2] 02/1/2015 11:58

Sorry for the o/t guys..

Q.P. i've about 30 stocks in the portfolio all of which could perform well this year, my 5 picks for the stockchallenge comp are work, alt, cto, bon and byot but my naps for the year are PEL and BDI bought a decent few of those this morning.Also heavy into FFY and ZTF.

[quepassa] 02/1/2015 11:25

Thanks. agreed about stock-picking!

still finalising my " Hidden Gem of the Year on AIM for 2015" (in 2013 Matchtech, and 2014 Cenkos ).

If you don't mind me asking, are their any shares which have particularly caught your eye for 2015 in a year which is likely to be beleaguered by political uncertainty with the UK General Election on the horizon?

ALL IMO. DYOR.
QP

[battlebus2] 02/1/2015 11:07

Hi QP never looked at ranks or diamonds, infact i'd no idea ADVFN did such a thing i thought that was TMF. Your posts maybe fewer but of greater content i have no doubt. The only thing that counts for me is picking the winners of which along side yourself i've had a few.

[quepassa] 02/1/2015 10:54

battlebus, I see from your profile that you have written an incredible 8810 posts and that according to ADVFN's new ( but somewhat ill-explained) ranking system that you are a Rank 5 (out of 7) poster with a symbol against your name which indicates that you are considered a Diamond poster. I am but a mere 3rd ranker with 2800 posts. Congratulations!! I don't know whether ADVFN's new ranking system will however encourage or discourage people from posting.

In terms of Avesco, their 16th Dec RNS came out at a time when the market was severely under the cosh before the Santa Rally well and truly took hold.
As such, I think their RNS was largely ignored by the market due to unfortunate timing.
Now that Avesco's RNS is perhaps being given the attention which it rightly deserves, this should underpin and bolster the share price.

ALL IMO. DYOR.
QP

[battlebus2] 02/1/2015 10:35

A few more buyers this morning i see :))

[michaelmouse] 31/12/2014 14:58

Yes the dividend payout will be interesting given the huge share buyback. I mentioned this at about the same time last year in the blog below:-



In summary, if Avesco pay a final dividend of 5.5p (or 7p in total - 1.5p was paid at the interim stage) then this equates to the same total payout as last year. This in itself would equate to around 6% at today's close. Of course it is feasible that the final payout is more than 5.5p. We shall see. Note that the forecast payout is 4.5p making 6p for the full year (still a generous 5%).
Either way, they do have considerable headroom for a progressive policy moving forward.

Michael.

[battlebus2] 31/12/2014 11:25

Yep that caught my eye as well Q.P., holding a few shares with exposure to the U.S and trading is strong and growing.

[quepassa] 31/12/2014 11:23

The Trading Update on 16th. December is not to be ignored.

It contained the magic words of " ahead of expectations". This is a strong indication of outperformance - which is likely in my view to lead yet again to an increase in dividend ( the June 2014 interim was increased by 50% from 1p to 1.5p).

Last year's final was 4p - and judging by the recent interim dividend, this may too be increased by 50% if not more.

Whichever way you cut it, the prospective yield looks very attractive. Especially when combined with Avesco's mature dividend policy and reliable track-record of paying and increasing dividends.

However, the aspect of the December Trading Update which most caught my attention was the statement that in the final quarter the Group experienced "particularly strong performance from Creative Technology in North America."

With the US economy beginning to perform exceptionally strongly again after the lengthy financial crisis, this bodes very well in my view for very buoyant activity levels for Creative Technology, Avesco's leading subsidiary, in the most vibrant and dynamic market in the world.

ALL IMO. DYOR.
QP

[battlebus2] 31/12/2014 11:23

Thanks Michael, an interesting read, just for clarity the buy this morning isn't mine :))

[michaelmouse] 31/12/2014 10:26

An undervalued gem this one. I've been a holder here for some years now. Patience has paid off and I'm hopeful will continue to do so. See my blogs back in July:-





Given the recent trading statement it does appear that the website was indicative of the second half trading which ended ahead of market expectations:-



Still capitalised below it's tangible assets seems a nonsense to me given Avesco's global reach (North America operations are particularly strong) and impressive client base. The current market cap. certainly doesn't reflect the intangible value of the business itself which must be considerable.

Value will out in the end, one way or another. Food for thought, but Richard Murray, Executive Chairman, is the controlling shareholder with near 30%. Murray must be around 65 now. I have no idea how long he intends to continue, but I've no doubt he will wish to cash in at some point in the next few years at a price considerably above the present value.

Battlebus2 - I think these quiet periods are an excellent time to acquire shares particularly in the more illiquid stocks. I also noticed the £51,000 purchase this morning at the full ask. Good luck with your investment.

Michael.

[battlebus2] 31/12/2014 09:56

A sizeable 42k buy this morning...