Velosi Share Discussion Threads

[marvelman] 28/2/2010 07:40

This latest contract only announced on their website with no value mentioned.

[melton john] 27/2/2010 19:07

A nice delayed 45k buy and a tick up.

[melton john] 23/2/2010 14:33

Maybe one day:

$11bn agreed offer for oilfield services group Smith International by rival Schlumberger.

[yf23_1] 14/2/2010 13:37

You're a bit of a dotty goofball if u ask me
:)

[goofball25] 13/2/2010 12:17

:-) yep I get to the 'point and tell it like it is

[gargoyle2] 12/2/2010 22:05

Spot on with that comment, Goofy.

[oregano] 10/2/2010 09:23

Charles stanley need to pull their fingers out and market these guys after full year figures. it's cheap compared to comparable companies and is performing well.

They could maintain an impressive dividend from operating profits, it depends on whether the individuals who are the major shareholders want income or capital gain.

[bookbroker] 10/2/2010 09:11

Personally I thought C.Stanley had a higher target on this stock before, of about 170p rather than 110p.

[glasshalfull] 09/2/2010 22:31

Trading Update;

Trading update

"Results for the 12 months to 31 December 2009 are expected to be in line with market expectations, and we expect the business to continue to grow in 2010. While investment in some regions is slowing as expected, there remain a number of key regions which continue to attract high levels of investment, such as Australia, Brazil and Kazakhstan. We are confident of benefiting from these areas of activity and our current order book is well placed for 2010.

During the year ended 31 December 2009, Velosi continued to experience a good level of demand across the 36 countries we now operate in. New contract wins in South Africa, the middle east and elsewhere, in addition to signing contract extensions, ensured we have been able to continue to expand the business. As anticipated, customers have sought to trim expdenditure where practical whilst still looking to achieve their origninal plans on new projects; we have looked to assist them in this and have streamlined our own cost base, to help mitigate any impact on us.

Our cash generation and level of cash reserves remain strong, placing us in a secure financial position."


I thought the T/S portion was fairly unambiguous.
In line. Decent order book with demand in established markets having deteriorated with emerging markets picking up the slack. Enevitable cost cutting both by customers and Velosi trimming its own cost base. Cash generation strong.


Thanks to oregano for putting some meat on the bones re. todays deal.

Regards,
GHF

[bookbroker] 09/2/2010 22:21

I am in the real world, look at the rating, why do you think it is so low, why do not think there is more support from institutional investors, accepting that ok apart from a London listing this co. is effectively run from abroad, however it's appeal for all apart from retail investors is limited. With their growth there should be considerably more interest even for a small co., there is an issue with oil service cos. and the same could apply with Cape Plc. I try to be contrarian in my outlook, but you have to find reasons not to invest in a co. such as this when their metrics are so compelling. I am a holder, have been for a long time, nonetheless it is frustrating when the share price rating does not confirm the outlook. This co. on share price performance has been a dreadful underperformer, but that's the stock market, unless GS. is keeping the lid on it.

[marvelman] 09/2/2010 21:57

bookbroker

Cash is king and these guys are paranoid about cash...as am I. Your tone suggests that that trading update is less than positive but

" Results for the 12 months to 31 December 2009 are expected to be in line with market expectations, and we expect the business to continue to grow in 2010"...."....no indication of trading performance"..what are YOU on.

What detail? numbers,what company gives numbers apart from we will meet market expectations. Just sell and move on then if you have that view.

[interceptor2] 09/2/2010 19:28

Good to see the trading update and acquisition. I was waiting for confirmation of more bullish trading before investing, but the tone wasn't that upbeat really. Think I will seat on the fence until Finals 14th April.

[bookbroker] 09/2/2010 10:51

But why do they need to keep issuing more stock, large cash balances, maintained profits albeit at lower margin, what is their plan for this cash, it is not earning anything by sitting on the balance sheet. Not good enough to believe that it is required for working capital purposes, seems to be simply accumulating, valuations as we know are NOT configured on the basis of net asset value, they are based on how efficiently the capital within the company is employed.

[oregano] 09/2/2010 10:43

here is the Charles Stanley note.

Velosi is effectively consolidating its operations in Southeast Asia with the
acquisition of the trading name of Velosi Malaysia. We forecast the acquisition
to be 8% earnings enhancing. With the group also confirming that the outturn
for the 2009 year is in-line with expectations and the industry outlook
beginning to improve, we increase our target price to 135p (from 110p).
�� Consolidation of operations in Southeast Asia – Velosi has acquired the trading
name of Velosi Malaysia ("VM") for a consideration of up to RM23.3m (£4.3m/
US$6.8m). The consideration is payable in shares in three tranches with an initial
consideration of RM7.9m and then deferred consideration of up to RM15.4m, spread
over three years and depending on cumulative profits to 30 June 2012. In return
Velosi receives a licensing fee equating to a percentage of VM's annual revenues
which, while not disclosed, is estimated to be in the range of 5% to 7% (we assume
5%). The pre-tax acquisition multiple, based on the acquisition achieving the
minimum cumulative PBT for the earn-out, is 4x.
�� Earnings enhancing – The deal will enable Velosi to gain access to a new geography
and a number of new clients for which VM has already pre-qualified. Similarly, the
license agreement will provide VM with access to the group's global market network
and an increased range of services, as well as Velosi's international licenses and
worldwide accreditations. Following the issue and allotment of the initial
consideration, the two VM vendors will have c.23% of Velosi shares, increasing to
28% should the full consideration be paid (noting that they held c.21% previously).
We are increasing our 2010 PBT forecast by 8% to US$18.4m (from US$17.1m). Our
2010 and 2011 EPS forecasts increase by 8% and 7% respectively, noting that VM
will be consolidated for a full 12 month period in 2010 but the initial share
consideration has been issued today.
�� Increase price target to 135p from 110p – Against a challenging backdrop, Velosi
has continued to perform well. While there is margin pressure across the industry
and some projects have been reined back, Velosi has still been able to grow profits
during 2009 while we expect market conditions to improve as we go into 2011.
Given sector rating expansion and the earnings upgrade we increase our price target
to 135p (from 110p) which equates to a PEG of 1x and a 2010 PER of 8.5x; still
undemanding in our view. We reiterate our Buy recommendation.

[taylor20] 09/2/2010 10:29

FWIW, Charles S Have increased their TP to 135p.

I must be reading it wrong, but they are not disclosing the percentage of the profits they are earning are they?

"The annual licensing fee payable to Velosi is based on a percentage of Velosi Malaysia's audited annual profit before tax from operating activities ("PBT"), which the directors of Velosi (the "Directors") estimate will be in the range of approximately 5.0 to 7.0 per cent. of Velosi Malaysia's annual revenue."

i.e. the PBT is expected to be 5-7% of the revenues (Rev = £18.65m, so PBT = ~£.9m.)

How much of that is going to Velosi?

[goofball25] 09/2/2010 08:06

agreed bb, a lot of repetitions and too generalised

[glasshalfull] 09/2/2010 08:05

Don't have time to post in detail....multiple announcements to interprate this morning.
Trading in line but they caution that markets weak.

Need to re-read purchase of "name". Does moot earnings enhancement, but...

Regards,
GHF

[bookbroker] 09/2/2010 08:04

Marvelman - tell me , in what way does the RNS help you as an investor, light on detail, and no real indication of trading performance, what the hell are you on man?

[bookbroker] 09/2/2010 07:59

Find it difficult to understand why they have to keep issuing shares tomake these acquisitions when so much cash on balance sheet, diluting existing holders, again a co. that should either management should buy in or put itself up for sale, they seem to be running it for their own benefit, last co. that I knew of buying its franchises looked to be RAY, ended up with no money, time VELO started to either provide a dividend or cash back if they can't find a suitable acquisition. Trading statement far too vague, Charles Stanley should advise better, tin pot broker.

[marvelman] 09/2/2010 07:50

Worth waiting for guys. They havn't let us down and what an RNS.

[koolio] 07/2/2010 16:45

An interesting article in Next Generation Oil & Gas.

[glasshalfull] 07/2/2010 10:13

Thanks Koolio. Suggests strong relationship.

Foodcritic - Agree, not much news from VELO and reckon T/S fairly imminient.
2009 should meet expectations or I would have expected news before now if materially different. Conversely don't think they'll exceed.

All important will be outlook for 2010 and beyond.
I'm slightly concerned at lack of contract announcements. We had considerable wins in the 1st half 2009 but since AGM statement little news. Could be that at VELO's turnover increases the size of each contract is not material in relation to overall turnover and hence no notification required. With my other hat on I note little in way of
news updates on their web site and wonder if contracts in general are being deferred. Again, don't necessarily think it VELO specific but industry specific.
I'd therefore appreciate a T/S purely to determine whether I'm off the mark here.

Irrespective VELO is still inexpensive given strength of offering, b/s and value attributed.

Regards
GHF

[koolio] 06/2/2010 17:36

VELOSI beats five competitors to Saudi Aramco Award

Thursday, Feb 04, 2010

In July 2008, VELOSI Saudi Arabia was awarded a five year General Inspection Services contract by Saudi Aramco. At the end of 2009, Saudi Aramco recognised VELOSI's commitment and success on this contract by announcing them as the winners of the 2009 Best Performance Award.

This award gleams even more than others in the VELOSI trophy cabinet, as VELOSI Saudi Arabia was only established in late 2007. The Board of Directors and colleagues worldwide would like to congratulate Mohammed Al-Khalifa and all those involved in this great success.