Venture Life Share Discussion Threads

[qs99] 09/6/2021 09:46

Nice to see buying continue with this tightly held stock this am....DYOR

[qs99] 08/6/2021 12:26

Boom through a quid
Lovely stuff

[disc0dave45] 08/6/2021 09:18

Cheers QS, looks like a good day!Interesting profit forecasts for BBIH, mind those depreciation charges!. Any taxable profit 2020?, couldn't manage any 2018 & 2019.All the best and good luck to holders.

[rivaldo] 08/6/2021 09:07

Here's a link to Simon Thompson's new article:



Conclusion:

"The point is that although housebroker Cenkos Securities is holding fire on upgrading its estimates for now, then we are guaranteed some hefty uplifts later this summer. Analysts currently expect Venture’s cash profit (pre-BBI acquisition) to increase 14 per cent to £7m on 10 per cent higher revenue of £33.3m. However, a six-month contribution in 2021 from BBI would increase Venture’s cash profit to £9m, implying 50 per cent year-on-year growth. On an annualised basis, group cash profit run rate will be closer to £11m, or 83 per cent higher than in 2020.

This implies Venture is being valued on a multiple of 10 times annualised cash profit to enterprise valuation, a modest rating for a company that is set to generate further revenue and cost benefits from BBI and has a cracking track record of integrating acquisitions.

The key reason why the shares have doubled since I initiated coverage, at 45p, in my May 2019 Alpha Report is management’s ability to outperform. The BBI acquisition and imminent news of further bolt-on deals are set to support further earnings upgrades, and that’s simply not being priced in. I maintain my 130p target price (‘Bagging value stock hatrick’, 23 November 2020). Buy."

[qs99] 08/6/2021 08:44

Cheers Dave, good day to you.

[disc0dave45] 08/6/2021 08:39

Oh, thanks for that.
Here comes the pump, yep it’s hard work!.
All the best

Ps oh you mean the fund raise last time that they said they didn’t need, despite £6m historic EBITDA (bull).

[qs99] 08/6/2021 08:16

great thanks Riv

[rivaldo] 08/6/2021 08:08

Great to see Simon Thompson weighing in again - he concludes with a 130p target and Buy....

[qs99] 08/6/2021 08:04

Great re ST, thought he may as he's been a fan.....any clues on the story please?

[qs99] 08/6/2021 08:04

Blimey Dave this is hard work, NO VLG is at £6m EBITDA read the post mate as in no way was I ever talking about BBIH!

[mfhmfh] 07/6/2021 23:45

Tipped by ST in IC

[disc0dave45] 07/6/2021 21:18

Sorry are you saying BBIH are at £6m historic EBITDA?, they didn't make any taxable profit in 2018 or 2019 and reported £2.3m EBITDA for 2020 - what taxable profit did they make?.....not a lot, if any IMO.

[qs99] 07/6/2021 20:03

they are at £6m EBITDA historically so no they couldn't afford £35m, hence the placing last year....the RCF should help further deals IMO as they will no doubt be forking out another £10m or so.....THEN we will have to see whether they can generate the cash to pay down the debt and/or pay a yield while also investing in the business. THAT is what I am saying.

[disc0dave45] 07/6/2021 15:36

Fair enough.

[effortless cool] 07/6/2021 15:19

Having a different view from yours hardly equates to wearing rose-tinted glasses.

[disc0dave45] 07/6/2021 15:10

The RCF shouts "we need more cash" to me,....what else can one conclude!. It further confirms they have not been generating oodles of cash to support their growth and don't see that changing IMO.But hey, I don't hold anymore and clearly some premium poster/s here have rose tinted glasses about their investment/s.All the best

[qs99] 07/6/2021 14:37

My point dave was that they should be generating material levels of cash from their earnings each year......but yes you are right, the RCF should provide more fire power.

Only time will tell whether they can keep delivering decent growth. Let's see

DYOR

[disc0dave45] 07/6/2021 13:20

Yep, just like they said the last time, namely no fund raise required, then the pump and sell off and fund raise.

[disc0dave45] 07/6/2021 13:18

Ps basically they've blown the last fund raise on a single acquisition where they paid way too much for it......ask yourself this, if you'd just spent a fortune on your prime factory facility to enhance its capacity by c 80%, why sell up now?, the cynic in me says it's because the demand you thought was there isn't anymore.Sorry but cant get myself to think positively about VLG as an investment anymore due to the BODS previous bull.Good luck

[thedudie] 07/6/2021 13:17

The acquisition will initially utilise the cash raised in December 2020 and afterwards we intend to put in place a revolving credit facility to repatriate some of the cash back onto our balance sheet, which will still leave significant firepower in our resources for further acquisitions, such as Project Vulcan, which is still in progress and we expect to update the market on soon

[disc0dave45] 07/6/2021 13:04

What Cash?When they did the last fund raise (£34m) two months prior at interims they had £6.6m.As it stands now, at year end they had £42m and have just spent £35m, so excluding working capital requirements, cash generated from ops, etc, they have £7m. They did a fund raise at £6.6m net cash balance to implement their growth by acquisition strategy (albeit for potentially £31m of acquisitions), so now Vulcan (£5.5m) and possibly Target A (£5m) is going to be funded how? - debt or fund raise or both!.They've already said they haven't sufficient cash, hence they "expect" to have an RCF in place after completion of the acquisition.

[qs99] 07/6/2021 12:34

I hear you but having worked in a plc, the house broker angle works both ways and these days brokering is a tough gig IMO and Singer have a good brand to keep

I think the 2021 FY "effective" EBITDA at "high single digit EV/EBITDA" is acceptable for a quality/scale asset. 20% capacity on the new factory also provides them room to utilise that for other products / deals

with margins currently c.26% on this, before cost savings and revenue synergies an EV/EBITDA of say 9 gives near £4m of EBITDA for FY21 IMO/DYOR

Throw in a few more deals, use of cash rather than dilution, then no reason This business shouldn't be chucking off an annualised EBITDA of £12-15m.....paying down debt along the way.

I'm as frustrated as anyone that it has taken c.6 months to get the deal done, but it's now in the market, let's see how it is digested and whether Singer's can rustle up more insti interest.....

GLA/DYOR
Cheers
QS99

[disc0dave45] 07/6/2021 11:57

Singer, you mean their house broker!.The earnings whether historic or not are the only facts we have as to how much they paid, and they've paid way over the odds based on what we know. I do believe this was "Target B" (using their stated 4x to 7x EBITDA - plus costs is on par) and they've paid nearly double what they originally hoped - that's what happens when you tell a PE company what you hope to pay and that you have £34m in your pocket!.Sorry but sold up here a while back as don't trust a word the BOD say and from today's news nothing has changed in that regard.Good luck

[qs99] 07/6/2021 10:28

discodave, the multiple is on historic numbers. I reckon with what they mention in the RNS, it is above the 7X top of range I agree, the historic number is irrelevant if they have acquired a scarce asset with the synergies they can get IMO....throw in other deals that they can then put through an under utilised factory and IMO the deal can be well justified. Singer upgrade says more to me as to the potential.....more deals should see more upgrades IMO and will be holding VLG for £2+ over the next year or so....

DYOR

[hpcg] 07/6/2021 10:27

N.B. chart still looks pretty good though, but a bigger bump of news day would have demonstrated some investor enthusiasm.