Avingtrans Share Discussion Threads

[cerrito] 16/11/2017 13:59

Did anyone make the AGM?
I was keen to go but missed the announcement and assumed they were having it late this year
Appreciate any report

[rogerrail] 15/11/2017 19:26

CH
Yes I think you are right, the initial £47m contract was for the PFCS ILW waste container. Not sure what the follow on £11m order was for but the graph in the download does show an additional requirement for PFCS containers (shaded in lilac)

The cast flange I suppose removes the need to profile from a steel plate which leads to the problem of what to do with the bit in the middle. I would think they needed to do some research on the method of welding this flange as the microstructure will be different to the sides.

[cockerhoop] 15/11/2017 16:29

MSSS appears to be a large proportion of the ILW needing to be securely stored during phase 1 of the program to 2023.

[cockerhoop] 15/11/2017 16:13

I'm prepared to be corrected here Roger but my understanding was that Sellafield Ltd have designed 2 types of 3m3 box (1 is a double wall design, the other single wall) to store the Intermediate Level Waste and MSSS is a sub-type of ILW.

Sellafield Ltd appear also to have carried out further R&D to attempt to bring down the cost of manufacture of the boxes using different welding techniques along with casting rather than machining flanges. How this affects AVG is unclear to me.

[rogerrail] 15/11/2017 12:14

From what I have read this may be a new more expensive/complex type of box ( £780m /15000 in total + 1500 of "another type" = £45K+/box).

The current contract is for the Intermediate Level Waste containers, so no contract is assured for the new type but agree I expect they should have the skills and be in the running to gain a proportion of this new work. I am thinking perhaps this was the rationale behind the acquisition of Whiteley Read.

[cockerhoop] 15/11/2017 10:56

Good spot Roger!

I particularly liked the

'Sellafield Limited is seeking to accelerate procurement timescales so this Contract start date could be brought forward.'

My understanding is that AVG and only 1 other competitor have been producing the initial boxes so must be in prime position to be awarded part of the contract.

The company say:

The on-going pre-production phase of Sellafield 3M3 Box operations at Metalcraft continues to proceed positively, with Sellafield approving the first 3M3 prototype unit and opening the 3M3 box production facility at Chatteris. This progress was underpinned by the award of a significant contract extension by Sellafield. The Sellafield project is the precursor to a significant expansion of long term business in the nuclear decommissioning sector. We believe that Metalcraft is well-placed to be a key partner for Sellafield in this programme over the next 30 years and to participate in further contracts in the sector, as and when these are tendered.

[rogerrail] 15/11/2017 10:19

It appears there are £780m worth of contracts still on the cards for MSSS (Magnox Swarf Storage Silo) 3m3 boxes for delivery commencing April 2020. I would think and hope AGV are bidding on these. A supplier day is scheduled for 16th Nov.

[pugugly] 11/11/2017 10:12

Agreed Resistance in the region of 210p - If breaks then possibly sub 200p in a hurry.

[ewanwhose] 11/11/2017 09:59

Like the company but not liking the chart at the moment

[rogerrail] 10/10/2017 11:26

Should be good news for P Brotherhood as I expect they will get the order for the STG's:

[glawsiain] 06/10/2017 14:42

Podcast by simon thompson on avingtrans.

Start at 27 minutes in



Key takes are that brokers forecasts for may 2019 use a 5% profit margin for HAYT's contribution. But as recently as 2016 they hit 9%. So, if avg can turn it around, then there is potential for re-rating.

[lignum] 04/10/2017 09:59

The pro-forma statement of financial position (P157 of Admission Document) shows zero net debt when putting the 2 businesses together with net assets of £68m (approx = current market value). Net assets include 14m of freehold land. The statement is hypothetical but a reasonable indicator of what the combined balance sheet will look like.

I don't understand the operating profit contributions for HAYT mentioned above of 3m in 2019. In the years to March 15 and March 16 HAYT had pre-exceptional operating profit of £5.4m and £5.8m. The operating loss of 2.5m in FY17 must have been an aberration due to customers deferring orders and other factors contributing to the perfect storm that AVG refer to.

Since 2016 sterling has weakened which must help their exports (which are the majority of the business). There are also cost savings (at least 0.6m for directors pay). With normality resumed, focusing on business instead of keeping banks on side and customers placing orders that were deferred in 2017 why shouldn't HAYT itself be contributing north of £6m in 2019?

[ugandalad] 02/10/2017 15:09

I think Thompson has made a fair evaluation of the situation and while I have been holding back on the last third of my planned investment I think I'll jump in with the CEO and add to my holdings.

[cockerhoop] 02/10/2017 14:31

Simon Thompson positive in IC



Snippet

An immediate objective for the management team is to restore Hayward Tyler’s profitability by taking out costs from the business, improving the supply chain management and removing duplicated overheads. Jo Reedman at N+1 Singer believes that £3.2m of costs can be taken out in the financial year to end-May 2018, doubling to £6.6m the year after, and is conservatively assuming that Hayward Tyler will make a nine-month operating profit contribution of £1.6m in 2018, rising to £3m on £61.6m sales in the 2019 financial year. There’s scope for upside as Hayward Tyler’s reported operating profit margins were as high as 9.4 per cent in 2016 prior to getting into difficulty, and finance director Stephen King has only assumed flat sales from Hayward Tyler.

The point being that although analysts expect Avingtrans's pre-tax profits to increase sevenfold to £2.1m on revenues of almost £80m in the 12 months to end-May 2018, around 85 per cent of which is already supported by contracts in place, rising to profits of £3.4m on revenues of £95m the year after, I can see potential for outperformance given the conservative assumptions on which the estimates are based. Furthermore, with the backing of Avingtrans’ solid balance sheet, there are no financial constraints impeding progress at Hayward Tyler, another reason behind its recent underperformance.

[cockerhoop] 02/10/2017 08:36

CEO Steve Mcquillan who prides himself on not overpaying has dipped his hand in his pocket along with his 'Punk Rocker' wife.

[cockerhoop] 29/9/2017 15:33

From the finals

On 31 August 2017 the Group acquired 100 percent of the issued share capital of the Hayward Tyler Group plc for GBP29.4m through a share placing. On the same date GBP11.5m of its facilities were repaid, a further GBP10.0m of debt assumed and GBP5m of associated transaction costs incurred.

[rogerrail] 29/9/2017 15:19

If I remember rightly net debt at HAYT FY end was £22m, but dont know how it stood at t/o.

[pugugly] 29/9/2017 12:00

teela brown - I think you will find most of the cash will have gone to pay off HYAT borrowings or if not paid off needs netting off against HYAT debt.

Has anyone goe a net cash figure for the company post t/o of HYAT?

[teela brown] 29/9/2017 11:41

Simon Thompson the small companies specialist from the Investors Chronicle is a frequent support of Avingtrans. A standard measure he frequently uses for Avingtrans (and other cash rich companies) is to produce a "cash adjusted PE ratio". He does this by removing cash from a company's net asset value then calculating what this rump is as a multiple of earnings. Applying wilmdav's EPS figure of 19.8p from 28/9/17 to yesterday's closing mid price of 211p we can see: a market cap of £65m, cash of £26.4m (40.6%of the market cap): this gives a "working" value of 125p and cash of 85.6p. The 125 bit is 6.3x the EPS figure. If an EPS multiplier of 10 is applied and work backwards, 10 X 19.8 =198 then add back the cash of 85.6 a value of 283.6 emerges. Is a PE of 10 too generous? Personally, I think not.

Teela

[wilmdav] 28/9/2017 10:45

Very optimistic.

Nothing from Canaccord but FinnCap and N+1 Singer are virtually identical. Consensus below from Sharepad.

. 5/18 5/19Turnover 80 95.5Profit 2.1 3.4eps 3.5 6.5Dividend 3.6 3.8

[wilmdav] 28/9/2017 00:25

HAYT made £5.15m pre-tax profit in 2016 and £4.55m after tax.
AVG'S current number of shares is 30.7m
Assume HAYT recovers sufficiently under AVG's management to produce the same amount of profit in their year to 31/03/19 without issuing any more shares.
This would result in an eps of 14.8p
Add Cannacord's forecast for the existing business in that year of 5p, which gives a total eps of 19.8p.
At todays share price of 216.5p, the P/E for 2018-19 would be 10.9.

In view of the tone of today's results and the necessary 'heavy lifting' this might well be over-optimistic but presumably we will soon receive an update from the broker.

[westcountryboy] 27/9/2017 21:08

I don't see it as a 'long haul' or particular challenge. I see AVG as it has always been - as a punt on management ability to add value. They took the aerospace division which in 2011 made £0.96m profit and even in 2015 only £2.75m of profit and they sold it for £52m. They had previously sold Jenatec for £12.4m.

Now they have bought Hayward Tyler at a knock down price. Several of us used to have shares in it. It is in principle a very good business but it was weighed down by debt.

Thus the results of the energy/medical division which reported today are almost irrelevant. I have the results of that division for the last seven years. In that time it has made a profit three years and a loss four years. On average it has made a small loss. But the turnover has grown by 50% in seven years so it is making some progress. The excitement will lie elsewhere.

You are paying for the potential, and the lack of debt to boot.

[tiswas] 27/9/2017 14:41

Pug

Yes, having a daft moment as been reinvesting my cape proceeds today which was an all cash offer and got confused. Apologies!

[pugugly] 27/9/2017 14:12

tiswas - I think you will find they were issued to purchase HYAT --
Westcountryboy - All dependent on a turnround at HYAT - Feels to me like a very long haul with porential/probable "heffalump" traps on the way to cause further falls when/if they materialise .