Venture Life Share Discussion Threads

[shanklin] 01/2/2021 12:35

QS99

Any idea how these Cenkos numbers have evolved please?

Stockopedia are not completely reliable in terms of the numbers they provide...

...but currently show 2021 revenue of £39.2m, up from 2020 revenue of £30.2m, with 5.31p EPS in 2021 up from 4.35p EPS in 2020.

Thank you, Martin

[qs99] 01/2/2021 12:08

Just accessed the Cenkos note...doesn't make bad reading IMO and leaves plenty of room on the upside. 11% organic growth should be more than doable, GMs are slightly lower than this year leaving room to over deliver and zero deals baked in from what I can see. EV/EBITDA at c.10 for this year may look punchy, but all depends on the deals.

I disagree with DD on the cash, high growth businesses just do eat a lot of cash up on development / working capital, but without doubt we should all keep an eye on it.

Sellers are out, depressing SP, some big volumes tho, so hopefully IR team can match those with new buyers.....

M&A and mouthwas/covid update required to produce a catalyst IMO

DYOR

[shanklin] 01/2/2021 12:05

dd45

I don't have an issue with the time taken to get acquisitions across the line.

K3C had a placing for the same reason and IIRC it was many months before they started getting acquisitions across the line. Similarly SRC have done a placing for acquisitions but are yet to announce any. In the case of SRC, their corporate communication is spot on and I am as confident as one can be that the acquisitions will happen.

No reason to doubt that VLG will deliver in due course.... ...then just give us the facts in an objective and complete manner.

[discodave45] 01/2/2021 11:38

Guys, sorry for slight rants but as Shanklin said: "Hopefully VLG management will be more honest going forward"That's my main issue here along with the way they went about the fund raise, the amount and the lack of progress with delivering an acquisition.Shareholders shouldn't "hope" that the people they have invested their hard earned money with will be "honest".All the best.

[discodave45] 01/2/2021 11:16

SimonThanks for the link, but not holding now.All this banter about their cash forecasts in relation to mk cap etc is complete nonsense. Again that's my point, they raised the money from shareholders, they are not generating any cash, the funds were also going to be used for working capital requirements (they've stated that) but as Rivaldo pointed out in their interims they mentioned that the "pace of growth" resulted in significant increases in working capital - but by Nov they needed to raise funds to use for working capital.They are not being straight IMO.

[shanklin] 01/2/2021 11:15

For the sake of clarity, I cannot see any issue with how VLG is trading currently as reported today and, in due course, acquisitions will no doubt be significantly earnings enhancing.

I would just like to see RNSes written by a downbeat accounting eyeore, giving us the facts in as clear and objective a manner as possible, as opposed to pot-smoking marketing tigger, trying to make things sound far better than reality.

[farnesbarnes] 01/2/2021 11:03

Take note. Using EBITDA numbers is a fudge.

Furthermore, Stocko and Sharescope/pad shares in issue are out of date (and why I ditched both of these services).

Anyone number crunching should use 125.8m shares in issue and not 84m which there were previously.

There has been substantial historical dilution.

edit - I'd expect ST to comment soon.

[simon gordon] 01/2/2021 11:03

Disco,

If/when VLG do an acquisition Cenkos will update their forecast.

As it stands today Cenkos forecast 14x ex-cash and net cash of £36.3m.

When VLG do an acquisition they will update their p/e and cash forecast.

If you follow this link you will find a way to access the Cenkos note published this morning:

[rivaldo] 01/2/2021 10:59

QS99, the new notes are on the Research Tree web site - subscription only of course.

Incidentally, VLG referred to "the pace of growth" in the H1 results leading to significant increases in funds into working capital. We know that in H2 they were also transferring further products and investment into the Biokosmes factory, including setting up production of what should be extremely lucrative sales of Kelo-Cote. There may also have been an element of stockbuilding prior to the year end in case there were any Brexit-related problems.

Cash outflows due to the growth of the business arent a bad problem to have. No doubt the prelims will have further detail.

[discodave45] 01/2/2021 10:57

Ps I don't want to put my money into a business that taps me up for more dosh and then basically just sits on that money for 12 months.Have posted previously that IMO the fund raise shouldn't have happened on the off chance of an acquisition, it should have been because they are going to make an acquisition......but it wasn't just for that purpose was it, it was to provide working capital and to strengthen their BS, ergo they are not generating cash they are burning it at some rate.

[discodave45] 01/2/2021 10:49

SimonMy point is how are they going to be in a net cash position FY21 of £38.5m when they are burning nearly £1m/month and have, as they stated, going to use the funds raised (c £36m, probably net £34m after costs?) for acquisitions/working cap/strengthen BS?.It doesn't add up, if they can be in such a strong cash position by Dec 2021 then why the chuffing hell did they feel they needed to hand round the begging bowl?. Will repeat, they are currently burning cash.

[qs99] 01/2/2021 10:49

DD, without doubt the management could have handled things slightly differently IMO, messaged their sales for instance slightly better, but if they continue delivering, as they have in 2020, then we will be a materially bigger business by the end of 2021, possibly with a decent yield as well, let's see.

The areas I mention above, they need to deliver on, I'll judge them on those things for the time being.

Where can you find the Cenkos note Riv please is it on the VLG web-site or behind a subscription firewall somewhere?

Cheers
QS99

[simon gordon] 01/2/2021 10:42

Disco,

The Cenkos forecast is without acquisitions because none have happened to date. They are forecasting the figures as the business stands today. No doubt when VLG do an acquisition they will update the forecast.

[discodave45] 01/2/2021 10:24

Am I missing something?They raised £36m in Nov.....for acquisitions. Their cash burn is currently about £1m/month.....how are they going to deliver acquisitions with raised funds and still generate c £36m cash?.

[simon gordon] 01/2/2021 10:15

On the Cenkos note I've just noticed they have the cash forecast at £33.3m for 2020 and £36.3m for 2021. They've actually come in at £35.5m so maybe 2021 forecast should be more like £38.5m?

They are scaled up and cashed up for the next stage of growth.

[rivaldo] 01/2/2021 10:10

Cheers.

I'm confident that VLG will continue to grow. There should certainly be lots of news flow to keep things bubbling over the coming weeks and months.

[discodave45] 01/2/2021 09:58

It's a free market.My choice and have sold up as don't trust the BOD, simples.Good luck to those holding.

[discodave45] 01/2/2021 09:56

They are burning cash at about £1m per month.

[simon gordon] 01/2/2021 09:55

Cenkos have issued a note. Cash adjusted 14x 2021. 2021 year end cash £36.3m.

They delivered on expectations.

I don't see the big issue with raising cash, they are in the business to grow and business changes and opportunities arise. Being agile and flexible is a positive not a negative.

Some China sales have moved into H1 2021 and they still met expectations.

I'd judge them more on the next trading update, it's far too early in the year to throw mud at them.

Slater going from 5% to 15% in the placing shows one of the best small cap investors in the London market having conviction in management, the business and future growth drivers.

[rivaldo] 01/2/2021 09:53

Agreed QS99. I'm happy to stay invested here for considerable upside.

N+1 Singer this morning presently have a 114p fair value target here.

Worth noting that they see a £35.5m cash pile at 31st December just gone - 32% of the current m/cap. They forecast 3.2p EPS for the current year, so if you strip out the cash that's a current year ex-cash P/E of around 18 or 19.

And that EPS forecast includes a conservative reduction in terms of forecast Chinese sales balanced out by increasing growth in VLG's other core markets and products.

When VLG eventually conclude any or all of their three mooted acquisitions, then the earnings-enhancing aspects will likely bring that P/E down substantially.

[discodave45] 01/2/2021 09:49

Ps Forgot, their ex business partners and major shareholder appears to be well informed too!.....better informed than pi's anyway.

[rivaldo] 01/2/2021 08:45

Shanklin, in that statement in the H1 results VLG may actually be talking about the "strong order book for H2" in general - completely separate to the comment about China.

It may be that the sentence is simply poorly worded, combining the Chinese H1 orders with the additional info about orders in general being strong.

Anyway....we'll never know for sure!