Avesco Share Discussion Threads

[quepassa] 12/1/2016 08:28

Extraordinarily good results.

To have achieved their highest turnover ever in an "odd year" is remarkable.

They give a Trading Outlook which says that the 2016 year has started well and that they EXPECT TO BE ABLE TO INCREASE PROFITABILITY and to GROW DIVIDENDS.

Very robust results indeed, another massive increase to dividend and a strong Outlook.

ALL IMO. DYOR.
QP

[tiswas] 12/1/2016 08:21

MM

Sorry, can you explain why you would ignore depreciation to value this company? I assume this high tech stuff depreciates pretty fast? Genuinely trying to understand why the company reports eps of 12.4p from continuing operations and you think it should be based on 29.7p eps.

Thanks.

[michaelmouse] 12/1/2016 08:01

Results are superb and should continue to improve with the realisation of funds for selling Fountain Studios at around 3 times book value. Estimates of around 13p EPS were way off. The group has always been measured on it's trading profit which gives EPS of 29.7p. This smashes there best ever performance (since I've been a holder) in an odd year as well.

The share price should be around £4.50 plus imo. With significantly reduced debt going forward and excellent growth (15x29.7 = £4.46).

Dividend has been increased by another 17%.

[liquid millionaire] 12/1/2016 08:00

AVESCO GROUP plc

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

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 2015.

KEY HIGHLIGHTS

· Revenue up 6% to £133.7m (2014: £126.4m)
· Operating profit up £4.0m to £4.9m (2014: £0.9m)
· Trading profit up 18% to £7.4m (2014: £6.3m)*
· Trading EBITDA up 8% to £27.0m (2014: £25.0m)*
· Continuing operations earnings per share of 12.4p (2014: loss per share of 12.8p)
· Annual dividend increased by 17% to 7.0p per share (2014: 6.0p)
· Profit from discontinued operations of £1.1m (2014: £1.2m)
· Net debt reduced £3.9m to £17.5m (2014: £21.4m)

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

Richard Murray, Chairman, commented:

"2015 has been another record breaking year for the Group with operating profit even higher than in 2012 when we had the benefit of the London Olympics in our home territory. The fact that this has been achieved in an odd year is particularly pleasing.

The sale of the land and buildings at Fountain announced earlier today will realise substantial value for shareholders, the full value of which will be reported in the coming year, and will significantly reduce our net Group debt down to very modest levels.

The current financial year has started well, with Creative Technology performing strongly in both Europe and the US. With the Group now carrying a much lower debt burden, streamlined and refocused, we expect to be able to continue our drive to increase profitability, to generate cash and to grow dividends."

[liquid millionaire] 12/1/2016 07:56

Avesco Group plc
("Avesco" or the "Group")

Sale of Freehold and Possible Closure of Fountain Studios



Avesco Group plc announces that its subsidiary, Fountain Television Limited ("Fountain") has exchanged contracts for the sale of the freehold land and buildings at its television studios in Wembley (the "Studios") to Quintain Wembley Fulton Road Limited, for a consideration of £16 million, payable in cash. At the same time, Fountain has agreed with effect from completion of the sale to enter into a lease back of the premises from the buyer at a nominal rent for a term of up to five years, however the lease will be capable of termination by either party on not less than six months' notice, expiring no earlier than 31 December 2016.

On exchange of contacts, Fountain received a deposit of £1.6m and the balance of the price will be received on completion, which is expected to take place on 5 February 2016. After payment of the costs of disposal, the net proceeds of the sale will be used to reduce debt.

In the year ended 30 September 2014, Fountain had sales of £5.3 million, representing 4 per cent of Group turnover, and made a pre tax loss of £0.3 million, a result which the Board considered to be an unacceptable return on the capital employed in the business compared to the market value of Fountain's premises. As at 31 March 2015, the land and buildings had a net book value of £5.3 million. After tax and other costs the sale is expected to result in a net profit of approximately £6m and net cash generation of some £13m.

The sale of the premises is likely to lead to the closure of the Fountain Studios business in Wembley and Fountain is therefore beginning a consultation process with its staff.

The main component of the Group's borrowing facilities is a £20m multi currency revolving loan from HSBC, which will as from completion of the sale of the Fountain premises be reduced to £10m. The remaining £10m line with HSBC will be in place until June 2018, leaving the Group with increased headroom to be used for its on-going development.

The Group will release its results for the year ended 30 September 2015 later today.

Richard Murray, Chairman of Avesco, commented:

"Fountain Studios and its outstanding team of people have a long and proud history of television programme making in Wembley and the Studios have over the years been home to many very successful television shows. However, the physical constraints of the Wembley site have limited Fountain's ability to grow while at the same time property values in Wembley have increased substantially. The disposal of the Fountain site will enable the Group to reduce its net debt to very modest levels and, as a Board, we believe that a far better return on capital is now available from investment in other parts of the Group where there are greater opportunities."

[shanklin] 12/1/2016 07:54

Hadn't really thought of AVS as a value share but with that property sale, its got much lower debt and closed yesterday well below TBV.

[deanowls] 04/1/2016 06:04

Good post boystown, I think the previous two years issues with the restructering costs have hidden the company probably from certain screens however with a full years clean results coming in the next two weeks this should sort itself out. The first half wasnt I believe exceptional and this is the usual low odd year without a world cup/olympics.

There is a large tax charge in the US off those figures but also a 1m pound amount to go back in the accounts in the second half from money but aside for possible litagation from the disney settlement, where none has arisen.

ITQ also in saucepan.

[saucepan] 03/1/2016 22:36

Boystown: great post. o/t Have you looked at ITQ? Of stocks on my radar, that seems another where the fundamental growth patterns do not seem at all consistent with the current share price - especially considering the new management on board. No advice intended.

[quepassa] 03/1/2016 20:32

My two personal hidden gems of the year on AIM for last year were

1.Patisserie Valerie ( +100%) and 2. Inspired Capital (+50% at take-over in July).


My two personal HIDDEN GEMS OF THE YEAR ON AIM FOR 2016 are:-


1. AVESCO

2. TOTAL PRODUCE (TOT)


both off the main radar.


ALL IMO. DYOR.
QP

[boystown] 03/1/2016 17:40

Personally, I think AVS is simply wrongly-priced and I honestly can't figure out why it's anywhere below £3.

Based on ongoing sales of around £130m, with £5-6m pre-tax profit (and remember they did £5.5m in the first half alone - though that was probably exceptional) along with net tangible assets of over £34m, the mkt cap of £41.4m at 217p simply makes no sense.

That's solid value IMO, yet usually with value shares, there's good reason they're so cheap.

These reasons are usually either:

A. There is no excitement / growth prospects, and the co. may be loss-making, and/or;

B. The majority owners are running the show for themselves.

But none of these things is true here. The owners (two PIs with close to 60%) have an admirable history of giving shareholders their cash back. So this is one of those companies where it's definitely wise to align your interests with the directors. For me, this is the single best thing about AVS - given its valuation.

As for growth prospects; well this is admittedly more difficult. Sales have remained fairly static but are still over three-fold the company's entire valuation and the CT business in the States seems to be going great guns. What's more, AV and technical staging, whilst competitive, is also quite a staple, stable business to be in.

My £3 valuation would equate to a mkt cap of £57m, still well under half annual sales, a prospective P/E of around 10, with a ptbv of 1.67; hardly demanding.

But I'm well aware there are two sides to every story, so I really would like to hear the explanation for AVS's valuation - as it just seems too good to be true? I don't currently hold any shares - but am thinking of changing that in advance of the imminent results.

[deanowls] 02/1/2016 05:51

Euros as well just over the channel

[saucepan] 01/1/2016 09:44

A very informative write-up. Thanks for sharing the link.

[quepassa] 01/1/2016 08:26

After such a stonking year with a 100% + increase in share price, perhaps just a little bit of understandable profit-taking prior to year end.

Some investors need to book or take profits on holdings before the year end.

It doesn't worry me personally in the least.


ALL IMO. DYOR.
QP

[deanowls] 31/12/2015 06:41

Cant understand people selling out roughly two weeks before results unless they are not aware, possibly people who have bought on the naked trader buying in that cant handle sitting and waiting for more than four weeks. Hope theres a few more that allow me to pick up some more around 2 quid?

[rogash] 28/12/2015 08:10

Avesco have stated twice that prelims will be above expectations. although 6 months ago. I am sure however that if the situation had changed for the worse they would have been obliged to inform the market.

[quepassa] 27/12/2015 09:15

Must being doing something right.

And good to see future business being locked in with a three year extension to Avesco Creative's current contract for the highly prestigious Barclays ATP World Tour Finals at The O2.

Recently announced:-


At the Official Launch, the ATP announced that the tournament will be staying at The O2 until 2018. Adam Hogg, Event Director of the Barclays ATP World Tour Finals, commented, “It’s been an absolute pleasure working with CT again and we are looking forward to continuing our relationship for the next three years”.




You're not going to get this sort of praise and repeat business from big-ticket prestigious clients unless it is a first-class, 100% reliable and innovative cutting-edge service you are providing.


ALL IMO. DYOR.
QP

[deanowls] 24/12/2015 17:26

I also enquired last month and was told the same, not long to wait now, dont wish your lifes away! Merry christmas all.

[rogash] 24/12/2015 11:39

I don't think we will be getting anything before mid-Jan. When I enquired a couple of months ago they said they didn't intend to issue a trading statement.I can't help but think that the prelims will be very good.

[cfro] 24/12/2015 11:17

Shame we didn't get a trading update in the end before Christmas. I was fully expecting one. Maybe they have been just too busy or perhaps they can't be bothered to inform shareholders! :-(

Hopefully we will get one next week or first couple of days into the new year along with a 'notice of results' RNS of which are usually due mid to late Jan.

[deanowls] 21/12/2015 22:26

Got it...


the chuckle brothers

[tiger20] 21/12/2015 22:02

If I am correct it will involve two very well known international entertainers

[deanowls] 21/12/2015 18:37

The thing with the creative technology updates are that they mostly relate to Europe and the UK, however with the amount of capex that they are putting into the US they must be seriously busy there and with the exchange rate the way it is this bodes well.

Current year coming up is an olypmpics and euros year also which usually generates more income.

Tiger, can you expand?

[liquid millionaire] 21/12/2015 16:57

Phew....was getting worried there for a moment as to what the answer was going to be!