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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Victoria Plc | LSE:VCP | London | Ordinary Share | GB00BZC0LC10 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
27.00 | 11.37% | 264.50 | 261.00 | 264.50 | 265.00 | 237.50 | 242.00 | 752,692 | 16:35:25 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Carpets And Rugs | 1.48B | -91.8M | -0.7982 | -3.28 | 300.75M |
Date | Subject | Author | Discuss |
---|---|---|---|
05/5/2018 16:45 | Not sure I agree with 40harry’s bearish comments above. 1.The company has raised capital twice, not “constantly 2. EPS takes into account capital raising. The clue is in the name: “Earnings PER Share”. The analogy of doubling ones interest by doubling the amount on deposit is therefore erroneous. The reason EPS has increased over the last 5 years is that the earnings have increased much faster than the capital raised. 3. The analysis has failed to take into account the whole-year earnings impact of acquisitions completed part-way through the previous year. Assuming these acquisitions only continue to trade as they have in the past (and history shows they tend to perform better under Victoria’s ownership and management), the pro-forma PE is more like 17x 4. The benchmarking analysis is incorrect as it is comparing the ratio of profit before tax (for Victoria’s “competitors 5. Through a combination of above market revenue growth and margin expansion, Victoria’s organic earnings are growing much faster than competitors. That is why the market values it on the 40% premium 6. Ebitda margins have gone from 3% five years ago to 14% in FY2017. That is a very strong indicator of a well run company. 7. Really don’t follow the logic behind the insolvency point at all. And, Bouleversee, I cannot see much risk of the stock “plummeting | 1boston | |
04/5/2018 17:12 | 40Harry...not a bad analysis on the face of it. Company is rated as a growth (and consolidation) stock... Either they grow from here (and consolidate) or they don't. | gabrieloak | |
04/5/2018 15:40 | Who are you comparing them with? The likes of Carpetright? I doubt if the Royal family buy their carpets from them. Don't forget they now own a lot of foreign companies where there has not been a retail downturn like here but even here the wealthy buy expensive new carpets and it's quite likely they'll go to John Lewis and buy Victoria's. In April they said their revenue and underlying profits were expected to be ahead of consensus market expectations and I have read articles and brokers reports recommending them highly. I agree the p/e ratio does seem high and have wondered if they were overvalued but then I've always thought the same about Diageo so have never bought, which has been my loss. I owned VCP before the days of Wilding and as a result of the special dividend my shares have cost me nothing, now worth around £60k so I obviously hope they don't come unstuck. I suppose they benefit from having gone on the AIM register because people are looking for a way of avoiding IHT and as there is talk of doing away with that concession in forthcoming tax reforms, I suppose the share price could plummet in that event if people switched to income stocks or ones perceived to be less risky though with all the nasties that jump out of the woodwork these days even in what one would consider safe investments, I'd like to know what is without risk. All we can do is wait for their results and keep our eyes and ears open and possibly taking some profits which at the moment would mean losing the AIM benefit and probably paying cgt. I wouldn't myself add at today's price but am not in a hurry to sell either. In the context of the total value of my p/f, they are not really overweight though they are now the most valuable holding. It would be interesting to know what others think. I am no expert. | bouleversee | |
04/5/2018 12:02 | Warning signs: When a company's strategy is to "create wealth for its shareholders by constantly increasing earnings per share via acquisitions and sustainable organic growth" this is a massive warning sign.....as in my view as EPS says nothing about how well management are performing, particularly when the capital base of the company has been constantly increasing (to fund acquisitions). The equivalent is me saying: i've done a great job earning twice as much interest in my savings account, when all i have done is doubled my deposits. Valuation cannot be justified by revenue growth In my view, investors' fixation on EPS growth has driven the shares significantly further ahead of their intrinsic value, such that the company is now being value like a growth stock (high 20's P/E). However, the reality is far different, with LFL (organic) constant currency revenue growth of just 6% in FY17. Let's assume that this is close to the 'market' growth rate for the industry. Trading on 4x premium to peers, why? But maybe the carpet industry trades at high multiples? If that was the case, how come Victoria is trading at 4x its competitors (average P/PBT multiple of 7.2x for FY17 acquisitions) when their growth rates are probably similar and actually the acquired business in FY17 actually had a superior ROCE than Victoria (which should deserve a premium valuation). Why would all these business owners sell as such a significant discount to their businesses' intrinsic value? It doesn't make sense.... Valuation gap must come down to cost cutting post acquisition Given that Victoria is blend of acquired businesses, which together, don't have better growth prospects or ROCE characteristics, I don't think it's unreasonable to say that £1 of profit generated by Victoria should be worth a similar amount to £1 of profit generated by a competitor i.e. the profit multiple should be the same. If you buy this argument, then the rational investor in Victoria must be indifferent between investing in Victoria at 28x earnings and investing at 7x earnings in a competitor. The rational investor can only say this if Victoria's management can quadruple an acquired business' profit margin, such that £1 can be turned into £4. Does this happen or could this happen? Well, the acquired businesses in FY19 had (on average) a PBT margin of 18%, versus Victoria at 9%. I think that the answer is quite obviously, no. Wrap up Earnings growth is an illusion and does not reflect how well management are performing. It is ROCE that it a better reflection and to this end, Victoria earns about a 10% return on capital - about 50% short of what most 'quality' orientated investors would view as a 'good' company. Where is Victoria heading? Victoria's valuation cannot be maintained by its very pedestrian rate of growth. As such, expect management to make more and more (in my view, disparate) acquisitions (the cheaper the better(?)). This will build on the company's already significant debt. LT debt is already £125m or 6x FY17's FCF, so don't expect this to be repaid, meaning insolvency is the logical outcome when refinancing isn't an available option. D-day is October-2020, with an option to extended for another year. | 40harry | |
26/4/2018 16:46 | Yes, I saw that. Presumably, it's just for one or more of their funds; wonder which. | bouleversee | |
26/4/2018 16:24 | should read Invesco. | nivison | |
26/4/2018 16:23 | Invest increased shareholding again, now up to 16% | nivison | |
23/4/2018 18:05 | I have bought in here. It is a breath of fresh air to hear management talking actively about their desire to benefit shareholders - although of course that's what it all should be all about - but usually isn't! I also like the fact the incentive scheme only benefits member/staff if the share price goes up by more than 20% p.a. I would happily settle for 20% p.a., but their implication is that they should obtain this and more. Good to see Invesco steadily accumulating and management having considerable stakes in the business. I agree reubencash - could look cheap in two years time. | gargleblaster | |
06/4/2018 20:10 | P/E of 56 !!!! | tradejunkie2 | |
05/4/2018 10:30 | Berenberg buy target reiterates to 950p | gabrieloak | |
04/4/2018 21:51 | Many thanks, gabrieloak. Will have a look. | bouleversee | |
04/4/2018 21:37 | As requested B hxxps://www.thefurni | gabrieloak | |
04/4/2018 20:06 | Reading back over the furnishing report news (not logged on for a few months)...I had missed the news on Headlam seeing UK weakness and European flooring imports being strong... I think the read across from Headlam (along with Carpetright irritating comments on market conditions as a poor retailer) explains the recent weakness in share price...however: (This morning) Geoff Wilding, Executive Chairman, commented: "We are now seeing the clear benefits of our strategy to develop a broadly based, resilient flooring business, where operational and manufacturing synergies lower costs, whilst also providing a robust platform for organic and acquisitive growth. This is in no small part due to the excellence of our wider senior management teams who continue to drive the business and create opportunities to grow market share while maintaining margins. The Board is encouraged by 2018 trading to date. Together with progress on ongoing internal initiatives to deliver synergies and revenue growth, and the very attractive acquisition prospects already identified, the Board is confident it will deliver another year of significant, earnings-accretive growth in the 2018/19 financial year." Board is encouraged by trading so far in 2018! What is not to like...? GO | gabrieloak | |
04/4/2018 13:46 | interesting logic AB...thanks | gabrieloak | |
04/4/2018 10:21 | FWIW I've kept hold of my 27/3 purchase today. I think there is an acquisition or two imminent. My thinking is: 1. From today's statement: 'Additionally, the Board of Victoria has invested a significant amount of management focus during the past year identifying additional suitable acquisition opportunities. Shareholders should anticipate further acquisition-led growth focused on Europe.' Later they talk about 'very attractive acquisition ops already identified'. This gives a clue IMHO that they are fairly well advanced. 2. Around the last acquisition 15/11 they said they kept back £21m for more acquisitions and there is now circa 5 months extra cash, helped by the Karaben and Ceramiche acquisitions. 3. Four acquisitions were completed last year, from Feb there was a gap of 8 months and then two in quick succession. If there was one within the next month that would be around a 6 month gap. I expect there is currently c£50m cash to play with, on a pe of 10 this would add c9% to forward earnings, or about 70p on the current share price. GLA | alphabeta4 | |
04/4/2018 09:14 | Very reassuring. About the only bright spot at the moment. | bouleversee | |
04/4/2018 08:10 | Very positive trading update. More acquisitions planned and performing ahead of expectations. About as good as I hoped for. Excellent new website too. | nivison | |
04/4/2018 08:05 | B...it’s out...what do you think? | gabrieloak | |
31/3/2018 21:27 | Mnny thanks. Let's hope it will be equally positive this year. | bouleversee | |
31/3/2018 21:13 | If you note...I was explaining what a tree shake was...I did not suggest it had happened or that Invesco caused it. I think a fully intentional tree shake is unlikely but it cannot be ruled out. This was what came out last year on April 11th (trading update): 11 April 2017 For Immediate Release Victoria PLC ('Victoria,' the 'Company,' or the 'Group') Positive Full Year Trading Update Trading Ahead of Market Expectations Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, provides the following positive trading update. The Board is pleased to announce that the Group's underlying profits before tax will be comfortably ahead of current consensus market expectations for the financial year ending 1 April 2017. etc GO | gabrieloak | |
30/3/2018 10:47 | Gabrieloak - Thanks for that. Do you mean by shorting? Are you suggesting that Invesco would tree shake? Are the results out on April 10? | bouleversee | |
30/3/2018 10:06 | I assume that the two largest shareholders control the company. Are they talking to each other? Do they have an agenda? | countryman5 | |
29/3/2018 16:25 | Tree shake: Pushing the price lower to ignite fear, compound that fear and drive the price lower...which in turn drives the price lower still...the cynic says that this is a classic technique to loose shares from the hands of unwitting investors who sell in a panic to those who know / are betting (normally market participants like market makers) that there is nothing wrong and that the company is round the corner going to be announcing that all is well! (usually on 10th April)... This does happen (normally on a much smaller basis) though in this case it would take some serious engineering and there was also a buyer out there mopping up. GO | gabrieloak | |
29/3/2018 15:37 | OK. I only rec'd the alert this afternoon. Could you please explain exactly what is meant by the expression "tree shake" in this context. | bouleversee |
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