Eurovestech Share Discussion Threads

[mangal] 10/2/2012 15:13

At last we have some real movement in share price & that graph looks promising.

[a0148009] 10/2/2012 14:39

Anybody know what the conversion terms are for the £12.2m Loan Notes and if EVT has the option of either taking cash or shares in June which I believe would be the case.

AO

[naked trader] 10/2/2012 14:20

Making the front page of the Toplist today might help awareness from more private investors, I like the look of the company and the way they go about their business.

[a0148009] 10/2/2012 13:21

Agreed, I hope they are always on the lookout for new opportunities with their track record doubt that they would have any problems in financing acquisitions through the market.

AO

[sbs] 10/2/2012 13:04

Yes - good point about institutions being put off. Perhaps they should buy a few more companies then and increase their market cap. There must be a few bargains around in this market for a cash rich and knowledgeable investor.

[a0148009] 10/2/2012 12:26

I know exactly what you mean because I was in a similar situation to yourself - but I was making the point it is unattractive to new institutional investors because of the lack of liquidity eg Artemis is the smallest insti with 4.5%.
£1.5m quid which for a fund would be the minimum to make it worthwhile, question is how many insti's could the float satisfy, barely one more I would say.

AO

[sbs] 10/2/2012 12:08

I never fully understood that argument. With a smaller free float, they can make a market in a smaller number of shares. How many people here want to buy a noticeable proportion of the 90m shares in the free float?

My company has institutional investors who are prepared to release a few shares when there is a big announcement to ensure enough liquidity for the PIs to get in at a sensible price and spread. This is not hard to organise.

[tanners] 10/2/2012 10:51

Bloody typical....I've been looking at this very closely since the KSS fuels update, having had them on my monitor ever since they took a stake in Net Dimensions a while back - thanks to IC I've had to pay 5% extra!

As mentioned it was the KSS update that really got my interest, growth of 90% in revenue and EBITDA for the current year....even if they only achieved say 25% growth for the following year, then I could see a valuation alone for that business which covers EVT's current 30M market cap.

I would expect another return of cash before June 12 if, as expected the Toluna loan note is converted, which as highlighted by IC would seem more likely than not.

Of course that still leaves a near 10% stake in a business which has grown at a tremendous rate over the past 6 years, and that investment could also prove very decent.

[kenmitch] 10/2/2012 10:50

I also added today (have held a stake long term for around 10 years) and wish I had done so yesterday!

I'm sure Investec are in for the long ride as they have been from the start.

What doesn't seem to be happening (happy to be proved wrong) is any significant new Institutional support/buying to give the shares a good lift. Hence no matter how good the news (like the KSS news this week) the share price doesn't change.

I guess it is the I/C article that has caused the spate of buys today. But how patient will they be if the shares now drift back?

My attitude is so what if the share drifts or does nothing for a good while. The value there is so obvious that in time patience will again be rewarded. And as I/C point out those of us who have put up with the boring share price have already been rewarded with far more cash returned than the original stake.

I'm NOT trying to get the share price down again, but should it drift it would be well worth buying more rather than selling on a stop loss since the (conservative) asset backing, including cash, is so clear. BUT EVT is only a buy for patient investors looking for a high quality investment. i.e it won't rocket next week - though no complaints if I'm wrong on that too!

[jambo172] 10/2/2012 10:46

AO

Woodford at Investec and Richard Bernstein are very close.
They have never sold a single share or likely to.
Also they appear to have common interests in Bernstein's other co, Crystal Amber.
Realisations being returned to shareholders through distributions and buybacks.
40% discount ridiculous esp with cash on the balance sheet.
Looks like underlying unquoteds are valued on a near 80% discount..

[a0148009] 10/2/2012 10:26

The market makers accumulated stock over the past few weeks on their books, eg 500k shares spread around them all is not very much.

I can see how IC got the proforma NAV as follows 30.06.11 NAV 19.8p deduct 4p div = 15.8p shares in issue 331m 47.7m. IC is also correct that this is conservative it did not mention the recent uplift in valuation of KSS from 9.5m to 13m ie 3.5m which is an additional 1p per share the updated NAV 16.8 per share, using IC market value of 29.7 gives 40% discount.
Investec's holding is so large, it would be difficult to sell as the market is not liquid, hopefully they are in for the long ride.

AO

[sbs] 10/2/2012 09:52

I added 100k today. I still find it hard to believe they can have all these buys in a row without an overhang. Let's see how it pans out.

[kenmitch] 10/2/2012 09:19

Agree about the overhang. As for the share price it needs investors to buy to move it up at long last. Maybe the fact that Eurovestech was included in the I/C list of bargain shares today will help? I don't think (and hope they won't) waste any more on buybacks. Better if really having nothing to do with the spare cash to return it (in cash) directly to shareholders again so that they actually see it.

Here's the I/C comment.

"Eurovestech (EVT)

Aim: pan-European development capital fund

Share price: 9.25p

Bid-offer spread: 9-9.5p

Market capitalisation: £30.5m

Website: www.eurovestech.co.uk

Long-term shareholders in pan-European development capital fund Eurovestech have been well rewarded for their loyalty. Since floating at 5p a share in March 2000, the company has returned 6p a share of cash to investors and they are still holding shares worth 9.25p each.

There should be more upside to come because other investors have clearly failed to grasp the significance of a complicated deal Eurovestech completed last year. It is only a matter of time before they do. That's because when ToLuna, a leading independent provider of online panels, communities and technology services to the market research industry, was bought by ITWP in a £161m takeover last April, Eurovestech's 29.5 per cent stake in Toluna was valued at £48m, an eye-watering 24 times its £2m investment back in 2000. As part of the acquisition, Eurovestech received a 9.8 per cent stake in ITWP worth £11.6m, discounted 'B' and 'C' loan notes worth £12.2m and a further £25m of bank guaranteed loan notes. ITWP is backed by Verlinvest, a Belgian family-owned investment holding company, which has a 44.9 per cent stake in ITWP and retains loan notes worth £10m. The other major shareholder in ITWP is Invesco with a 37.1 per cent stake and £8.5m of discounted 'C' loan notes.

Those loan notes are of great interest to me because having redeemed the £25m of bank guaranteed notes last year, the discounted notes are due to mature in June. In my view, ITWP controlling shareholders have every reason to use Toluna's strong cash generation - the company reported positive operational cash flow of £15.8m and had year-end net cash of £13.2m in 2010 - to redeem the loan notes otherwise they will automatically convert into equity. If that were to happen it would raise Eurovestech's stake in ITWP to 16.4 per cent, dilute Verlinvest's interest to 42.1 per cent and Invesco's interest to 34.8 per cent. It would also dilute the stake of Frédéric-Charles Petit, Toluna's founder and CEO, to 6.6 per cent.

The significance of this has clearly been lost on investors who have failed to grasp that £22.1m of Eurovestech's pro-forma net asset value of £46.6m could be in cash by end June this year. To put this into perspective, the company only has a market value of £29.7m. Moreover, it's not as if Eurovestech's other investments are not performing well as the directors have raised the carrying value of wholly owned subsidiary KSS Fuels, a global leader of fuels pricing and retail network planning solutions, from £9.5m to £13m on the back of bumper trading in November.

Trading 34 per cent below a conservative calculation of Eurovestech's pro-forma net asset value and on a bargain rating of 0.67, the shares offer great value at 9.25p especially since the company could be sitting on net cash of 6.7p a share by the end of June if the loan notes are redeemed."

[a0148009] 10/2/2012 08:43

Good to see some fresh comment.
I do not think there is an overhang, as the share price has done little for some time some small investors are impatient and bored. Company bought shares 600k on 15.12.11 and feel sure it would buy in any size, no point in picking up dribs and drabs supporting the price. The share price is at a huge discount to NAV with the recent uplift of the book value of KSS fuels, in the region of 45%. Half year figures due end of March, so far the management have an impeccable record and am confident that investors will be rewarded. Some activity today,possibly a mention in the IC or similar tip sheet, have added to my holding recently.

AO

[sbs] 09/2/2012 20:35

I assumed there was an overhang, which was also the motivation behind the buy backs. If so, when that has gone, the price could rise quite swiftly.

[kenmitch] 09/2/2012 19:00

Good update on KSS Fuels. Audionamix and Maxifier both look promising too. And Toluna featured at number 16 in The Sunday Times list of 100 private equity backed companies with the fastest growing profits.

The share price hasn't noticed yet.

[ozz2] 21/12/2011 13:22

Thanks kenmitch, and I will look out for that entry point-once again-

[kenmitch] 20/12/2011 20:28

sbs.

True if taken to that extreme, and I've also pointed that out at times.

[sbs] 20/12/2011 18:24

kenmitch - if the shareprice didn't rise following heavy buy backs, NAV would rise indefinitely. At some point the share price would rise, as they could liquidate the company and distribute £100/share.

This assumes the NAV was realistic, of course, and wasn't in illiquid stocks with unrealisable market prices.

[kenmitch] 20/12/2011 17:56

sbs. You haven't named your Company so we can't know whether your claims are for real. There have been plenty of examples of EVT investing when the pay off was years away so that won't have been the reason. Do you talk more than you listen? EVT are shrewd and would notice that, as they would claims with little to back them up.

e.g The disadvantages of buybacks have been well covered here. You haven't countered any of them by persuavive argument. Instead you claim that the EVT share price would rise a lot if they bought back heavily.... at least I think that's what you mean by "They could easily push the price up a long way by buying." With far fewer shares in issue then NAV would of course be higher - but that alone doesn't guarantee a higher share price. It could instead just give an even bigger discount to NAV than now - at least until investors decide the shares are an irresistible bargain. Serious buying would lift the share price.

ozz2

The big discount to NAV simply shows that the share is very cheap. That's reassuring rather than worrying. What's more their NAV figures are conservative - which makes the share even cheaper. There's not much EVT can do about it - and as explained I don't think buybacks are the answer. They already have very strong Institutional support including two top Fund Managers in Neil Woodford and Colin McClean and Institutional share holdings in EVT are large.

I agree the share price performance has been very disappointing but newsflow has been good - including the recent KSS update. Further good news/NAV enhancing news will make the shares even cheaper, and some of their investments are showing great promise. At some point this will attract new buyers of the shares and get the share price moving up again.

Meanwhile in a bear market this is one to hold and lock away for very good returns again in time imo. It is certainly a worry free investment for me and in the unlikely event of the share price falling further - unless because of bad news - one to top up on any further weakness.