Ensor Share Discussion Threads

[shanklin] 26/7/2016 09:33

Thank you carcosa

I agree there could usefully be a great deal more transparency here.

Best wishes, Martin

[carcosa] 26/7/2016 09:28

Shanklin: Just short of 25k Averaged a sale price of 67.5p and an overall loss

Sorry once again for the share price action but at least you guys can largely attribute to me; and I made a mistake. I had a negative expectation because of the planned delay in releasing the prelims and rapidly scanned reading the prelims I homed in on a phrase that confirmed my self-bias.

Personally management could have been considerably more transparent on total valuation at the end of the process but trawling through these prelims I'm of the opinion that the ultimate base valuation is around 75p acknowledging that is quite some way off the 100-115p/share that has been mentioned on these boards. I hope I am wrong (again!). I do, however, think that the final realisation could be quite a few months aways.

FWIW my valuation is largely based on a multiple of the profits of the remaining businesses as detailed at Companies House; albeit this year's accounts are not available as yet. Was pleasing to see they got the pension issue resolved at the lower end of their initial estimate.

Should the share price fall back a tad then I'll be tempted to buy back in, if there is a subsequent tip in the press regarding the company that sends the share price above 75-80p then I'll probably sell at that level.

[shanklin] 25/7/2016 13:48

EM

To some extent, I think we are all pottering around in the semi-darkness trying to work out what is going on. From my point of view, I think the NAV is easier to use as a basis for valuation than the cash position where I have no clue what is going on.

I suspect the situation is a little better than the one you describe but I certainly have little idea of where we currently are cash-wise.

Cheers, Martin

[eezymunny] 25/7/2016 13:10

Net cash about £12.5m after disposals plus anything they've generated since year end. Does that sound right? Maybe £13m today.

Market cap at 73p is c. 21.7m?

So Ellard/Woods must sell for c. £8.7m to break even here? Op profit was a combined c. £1.5m

Sounds like it's priced around the right area here to me, with two decent disposals offering a bit of upside vs no disposals and a cyclical earnings decline offering downside.

Tricky!

[zimbtrader] 25/7/2016 11:59

I think we can all agree Ensor are very "creative" with their accounts forsaking the clarity and granularity that could be gained by clearly stating each business separately. One wonders what's actually gained by doing this other than to keep investors in the dark!

I have re-crunched figures a number of ways and built in several assumptions ranging from extremely conservative to highly optimistic and have a range of values between 68p and 91p with a figure around 80p occurring most often.

I guess all will be revealed in time.

[eezymunny] 25/7/2016 11:54

I suspect you are both right, looking again. The 2015 assets are very similar to 2016 for discontinued ops. As I said, a pro forma would have taken 5 mins and given everybody what they need :) Useless bar stewards.

[cockerhoop] 25/7/2016 11:25

I'm with Shanklin here, I think it reflects the status at 31st March 2016. I don't think the substantial uplift (approx £7.4m) for Technocover is included.

Edit

I get NAV at Ellard of £5.044m and Woods at £1.456m

[eezymunny] 25/7/2016 11:11

It's too confusing to know whether you're right or wrong (for my Monday morning head) but "Discontinued operations comprise the results of Technocover Limited, which was disposed of on 13 July 2016". That makes me wonder if the note 3 NAVs include the uplift from Technocover disposal. Probably worth you calling the company to clarify. Clearly target prices vary wildly depending on this.

[cockerhoop] 25/7/2016 11:11

EM,

Isn't Technocover listed as the only Discontinued Ops business in Note 3?

[shanklin] 25/7/2016 11:03

EM

I certainly agree with your first paragraph.

IMHO the figures in Note 3 are all as of end-Mar-16. So, yes, my belief is that Note 3 and the rest of the results do not show the effect on NAV of the sale of either OSA or Technocover. Hence I have guestimated what I think the NAV is post the sale of both of these.

Cheers, Martin

[eezymunny] 25/7/2016 10:55

I'd say it's rather confusing. Why on earth they didn't issue a pro-forma balance sheet with all disposals reflected is beyond me.

Shanklin, do you think the note 3 assets/liabilities reflect the sale of Technocover (and therefore NAV uplift)? I'd say your sums suggest you think not, but I'm wondering if they do.

[pavey ark] 25/7/2016 10:29

Shanklin, I'll be rather lazy and take your figures but they do seem in line with my previous calculations.

Let's approach this from the other end and say we have a takeout price of 85p/95p.

The 85p would mean £25.5m and 95p would require £28.5m.

If we take your figure for the book value of Woods and Ellards as £4.5m it looks like the upper figure of £28.5m is possible but the lower figure of £25.5m is certainly achievable.
(my guess is that they are looking for £12m/£15m for these businesses but even £10m would secure my lower figure)

That most important point for me is that no matter what was suggested/promised as a breakup valuation, 85p represents a 20% gain from here and 95p represents a 34% gain with little downside risk.

As ever in this game, time will tell.

[shanklin] 25/7/2016 08:31

From what I can gather from the results, particularly the numbers in note 3, after selling Technocover and OSA, I think shareholder equity is now circa £19.5m. The book value of equity in Woods is 1456k and the rest of the equity (including Ellards) has a book value of circa £3.7m.

How much of the above £3.7m book value relates to property and what uplift in value there be on that? Rather simplistically, I have assumed:
- Brackley's current book value is 750k and no uplift is achieved there
- There is no other land or property to be sold

This leaves the book value at Ellards as £3m and for Woods of £1456k. What uplift on these numbers and hence on the £19.5m might be achieved?...

In 2016, Woods sales were £3.6m with op profit of 628k & Ellards sales were £8.5m with op profit of £890k.

The other moving parts include:
- ongoing management charges
- any redundancy payments

This is all IMHO.

Cheers, Martin

[zimbtrader] 24/7/2016 13:33

Tiswas,

My view is the same as Shanklin - the directors initiated the process, so should not be entailed to any excessive redundancy payment. With respect to the remaining "ordinary" head office employees, plus those at the Chinese office will receive some redundancy unless they are subject to TUPE when the remaining group businesses are sold off. Even then, allowing £600k reduces by NAV by 2p.

My calculation does err towards the highly conservative but I would freely admit a) I am relying on a fair amount of guess work in trying to establish a fair value and b) have relied heavily on the accounts filed for each group company for Y/E 2015. I will update again once the 2016 accounts become available.

Certainly welcome any other views from you good people and, of course, I "look forward" to ST's update which should come fairly quickly. Hopefully he'll not suggest its time to bolt for the doors as he did with Tristel (a mistake given last weeks trading update!). Mind you, I bought more Tristel when he said sell, so maybe "sell Ensor" might be desirable. ;-)

Z

[shanklin] 23/7/2016 18:00

I will post my calculations next week when I am not having to used an iPad but would hope we are heading somewhere well above current levels but quite probably less than £1.

[shanklin] 23/7/2016 17:54

The directors are the people who initiated the sale so I cannot see any notice period being necessary there. Indeed as the subsidiaries are sold I would have thought the costs on that front should be reduced proportionately unless very strong arguments to the contrary exist. Given the subsidiary employees will move across to the buyers, no redundancies there. So redundancy costs perhaps relate to HO non-director staff. AIUI that comprises a very small number of people.

[tiswas] 23/7/2016 17:17

Hi Zimbtrader

When calculating your nav can I ask what sort of sums you built in for shutting down HQ? I presume that employees and directors alike will be entitled to some sort of pay off when their job function no longer exists. Assuming that they do not move with any of the subs.

Aggregate directors remuneration was £592k in 2015. Are they all going to be on 12 months notice once the final sub is sold?

[zimbtrader] 23/7/2016 16:33

I too have spent a considerable period of time evaluating Ensor and feel more comfortable than I did yesterday! I will continue to hold at his level and, perhaps, might buy if there is any further drift.

Of course the next thing to watch out for is the inevitable ST article! His "fair valuations" always err on the side of highly optimistic but it'll be interesting to see if they come any where close to mine at around 80p (which I calculated in a far more conservative manner).

I note that the Brackley site has gained approval and is being marketed at £750k. Don't know if that's already factoring in the slow down in the housing sector post-Brexit but it is certainly less than ST's "well north of 1£m"!

[pavey ark] 23/7/2016 11:03

I've just spent a considerable amount of time going over the accounts and I am certainly more than happy to hold at this level.
The dividend payment takes me neatly to 70p and I can see plenty to go for from here.
I always thought that ST's valuation was a bit rich but we are where we are so perhaps it would be a good idea if holders spent some time going over the results.

The two remaining units are increasing market share and profit and made a combined profit of almost £1.4m last year.
It is obviously a good move to say that these businesses will not be sold cheaply just for a quick sale.
Good to see the pension situation sorted at a good price and in a tax efficient manner.

[blueliner] 22/7/2016 20:12

No longer a holder, can't believe how they have dragged their feet here. The first disposal to a management buy out was an underachievement.
Feel fortunate I sold some @ 114p 111p & 95p with the rump going in April at around this weeks price. Needed to free up ISA funds.
Good call by davidosh in 2013 initially, sorry it's not worked out recently.

[jaf111] 22/7/2016 16:51

Brexit is hardly an excuse.....this sale process should have been wrapped up months ago.......

Frankly a shambles, and the longer it goes on the less likely that they will "pull a rabbit out of the hat".

Very disappointing

[shanklin] 22/7/2016 16:14

Blimey carcosa

How much of that 35k+ of sales post the results is you?

Thank you, Martin

[carcosa] 22/7/2016 16:00

Oh, If I did wrong... sorry I made the share price tank. Sure it will be better Monday