Victoria Share Discussion Threads

[tr200g] 03/8/2022 17:59

GT are in fact responsible for perhaps the easiest to spot fraud of recent times


Patisserie Valerie

[drk1] 03/8/2022 16:34

Topvest - GT are a prertty reliable & straight laced auditor (few historic scandals in their books when compared to the Big-4), so probably best to keep an open & cynical mind here on these tweets and reports.

We know that the company are aware of these allegations and if things escalate, I'd expect/want to see their robust response. With that in mind it's also worth remembering that the last time VCP came under a massive short attack (led by the notorious George Soros I believe) the end of the attack also saw the emergence of several online rumours concerning the management of the business (all of which proved to be totally unfounded). Coincidentally, the latter corresponded with the shorts closing after which the share price recovered swiftly and substantially meaning that the funds won big time (very big time) both on the way down and the way back up.

Only goes to underline the importance of doing by your own research as opposed to relying on others & remember that there are now plenty of parties with a vested interest of the share price going down at play here (in addition to those that would like to see it go back up)! I remain highly cynical! ;-)

[topvest] 03/8/2022 15:23

Paul Scott has covered the allegations on Stockopedia. Bear attack paper linked. hxxps://iceberg-research.com/2022/08/03/victoria-plc-vcp-ln-mites-under-the-rug/

There is very rarely smoke without fire.

Just a quick look at the Hanover subsidiaries listed reveals an immediate inconsistency with Companies House.

Hanover Carpets Ltd is listed as a carpet distributor in the annual report, but Hanover Carpets Limited is a dormant company as per Companies House and was previously controlled by Karim Batash.

Hanover Flooring Ltd is listed as a non-trading company in the annual report, but is possibly now a trading company as its year-end has been extended to March 2022. Accounts not available yet though so difficult to conclude.

I think the explanation surrounds this being an acquisition of a trade and assets. In that situation newco's are often created. It's a bit odd though that you can't really track down the Hanover Flooring results pre-deal. That's the question I would ask - point me in the direction of the statutory entity in the UK that showed the results of Hanover Flooring for 2020 ?

It is also rather odd that this acquisition was done without an RNS at the time. It was not insignificant. Obviously, its easier to not draw attention to something if its not announced in a separate RNS.

There is no separate income generating unit for this acquisition, so no future test for impairment which is helpful if they were trying to hide something.

Just 30 minutes or so from me, but does pose a few more questions for anyone interested in pursuing further.

It's also a bit of a stretch to run a $75m yacht on a £64k per annum salary, so if its his then he needs about 10% of the purchase cost per year to keep it on the water!

I'd be getting a tad worried if I were Grant Thornton.

[mysteronz] 03/8/2022 10:29

Thanks Eric, just spotted - no doubt recent noise has been a forerunner to this.

Some amusing thoughts around inventory write offs in an environment where demand is, for the short term, good and many companies have held excess stock to meet said demand and be a reliable supplier.

[pireric] 03/8/2022 10:24

Cheers Mysteronz, kind of you to share

FYI "Iceberg Research" have published a negative piece today, easily findable on google.

Eric

[castleford tiger] 03/8/2022 09:44

cheers

I had conversations with the guy in the early days when we had a big holding.

Some of the stuff on twitter is well extraordinary

tiger

[mysteronz] 03/8/2022 08:11

Castlefordtiger referencing Geoff Wilding he has been pretty successful.

Before his time at Victoria, Geoff Wilding had numerous successes in his career executing roll-up strategies in different industries.
• Originally from New Zealand, Wilding began his business career in the 1980s at a New Zealand-based investment bank.
• Wilding later started his own transport business in NZ in 1990 and began rolling up the space. He later sold the business to
management-backed PE in 1996 and made 12-14x his initial investment of $1M.
• Shortly thereafter, Wilding invested in Commsoft, an existing tech services company that he helped grow. Unfortunately, the business collapsed after the .com bubble burst as some of their major clients such as Worldcom went out of business.
• Wilding’s next venture was in the Australian/New Zealand Newspaper & Magazine industry with Pacific Print in 2002. He began rolling up the industry, leveraging economies of scale. Wilding sold the business to PE in 2005 for $190M AUD, making a 20x return on his initial investment in <5 years1.
Wilding later moved to the UK in the late 2000s and bought 42% of Simplify, a legal process services business. The business was sold to PE in 20142, and Wilding again made multiples of his initial investment.

Source Alta Fox

[mysteronz] 03/8/2022 08:09

The response from the company is as follows, to confirm this was via a direct question from me:

Victoria acquired an underlay manufacturing business called Ezi Floor in October 2016 from Saqib Karim and family (his full name is Mohammed Saqib Karim but he calls himself Saqib). At the time it had revenue of c. £10m

Victoria acquired a carpet wholesale / distribution business called Hanover in February 2021 from Batash Karim and family. At the time if had revenue of c. £16m. Batash and Saqib are brothers (they started separate businesses in the same industry a number of years ago, albeit Ezi Floor and Hanover are clearly different in nature)

Both of the businesses are based in the same business park on the outskirts of Keighley, Yorkshire. They are distinct businesses with separate premises (one is a factory, the other is a warehouse), plus Hanover also has a warehouse site in Birmingham

Both of these deals were structured as “business and asset” acquisitions, whereby the purchaser doesn’t acquire the legal entity itself from its owner(s) but instead acquires the going concern business into its own legal entity (either one that it already has or a newly formed legal entity, it doesn’t really matter). There are different reasons why a seller or purchaser may want to structure a business transaction in this way or alternatively as a purchase of shares in the target entity. Most of our other past acquisitions were acquisitions of shares, but a few of them were also structured in this way (one is Australia, one in Spain). Both structures are common practice in M&A

When we acquired the business of Ezi Floor there was already a legal entity owned by Saqib called “Ezi Floor Limited”, so as is normal in these circumstances we set up a new legal entity to be the purchaser (at the time it was called Victoria Newco Limited and was registered at Victoria’s head office address in Kidderminster), and sometime thereafter Saqib was contractually obliged to change the name of his legal entity (as we had purchased the brand name), which had become a non-trader as it no longer held the business. We then renamed Victoria Newco Limited to Ezi Floor Limited

When we acquired the business of Hanover, rather than set-up a newco as the purchaser we decided to use an existing legal entity that we had in the group for practical reasons (existing bank account and other company infrastructure). The legal entity chosen was “Carpet Line Direct Limited”, which was a non-trader at the time. This entity had previously housed a carpet wholesale / distribution business trading under that name, which was part of the Whitestone Group that was acquired by Victoria in January 2015, but for administrative simplicity we decided back in 2017/18 to consolidate the Whitestone businesses into one of its legal entities (View Logistics Limited), which left a number of non-trading subsidiaries including this one

Once the acquisition of Hanover was completed, we changed the name of that entity to Hanover Flooring Limited. In order to protect the “Carpet Line Direct” tradename (given this is still a business operating from the View Logistics Limited entity), we decided to set up a completely separate newco with this name, which is again a non-trader (but doesn’t have the bank account and other infrastructure that existed in the old one, it is simply an empty shell company whose only value is the legal name)

To be clear, these entities are all subject to statutory external audit

[drk1] 03/8/2022 08:08

Pireric "Victoria need to give a proper response and rebuttal"..............to a couple of tweets that refer to historic information readily available in the public domain?? Get real.

Victoria needs to focus on getting the business back on track & countering this unprecendented short attack.

[mysteronz] 03/8/2022 08:06

Eric, appreciate your view, i think its clear they will continue to run the business regardless of whether they respond or not but i get the sentiment.

Personally i dont think it warrants a formal response via RNS, but i appreciate their speed and detail of their response to me as a PI. It was not a ‘everything is ok dont know what they are talking about’ response.

If i can share i will, if not if anyone is interested or have specific questions then email IR who will put you in contact with VCP

[castleford tiger] 03/8/2022 08:04

Some pretty damming stuff being quoted.,

65m for a boat and 6.5m a year to run it looks beyond the income of GW.

All very odd

tiger

[pireric] 03/8/2022 07:51

Mysteronz,

While the company's take may be completely accurate/better informed, where there have been unscrupulous companies in the past, the response is often the same. That it's all OK and the writer did not make contact (the writer normally concerned by some offensive litigation from the company ahead of being able to publish anything to try to shut them down)

Victoria need to give a proper response and rebuttal or say absolutely nothing and just keep running the business in my opinion.

I have no view on whether what has been written is accurate/incriminating or not. But the status quo should be to take a neutral stance, even if you're a shareholder, as what companies say is not always helpful

Eric

[topvest] 03/8/2022 07:48

The price action is magnified here as its subjet to the 30-50% small cap growth bear market rout + its magnified by the very high leverage with very few small caps having more debt than them. Obviously, high debt is not attractive when rates are being aggressively hiked. It's only back to where it was in October 2020 so could bounce back strongly again or continue on a death spiral...time will tell!

[mysteronz] 03/8/2022 07:36

I have had a very comprehensive response from Victoria last night on the matter.

Safe to say i am completely confident that there is nothing untoward here.

Awaiting to see whether I can share (as this is courteous to do).

What i will say is unsurprisingly the individual making accusations did not make contact with VCP, if they did they would realise there is no issues. But this doesn't suit their agenda.

Better to throw unsubstantiated ideas around without any form of due diligence in order to profit.

[spectoacc] 02/8/2022 20:30

Interesting times - also bought in, made a loss, got out, but if I were still a shareholder the price action would be a big concern.

[topvest] 02/8/2022 20:15

It certainly will be interesting to see what happens. I was taken in by Wilding's Buffettology talk in the Annual Report, but started to get cold feet and sold out at break-even in April 2021. I sold because it was a poor buy in the first place (using my criteria); I then didn't like the leverage involved and I just had a feeling that Wilding was not the Warren Buffett role model he was trying to immitate - a tad cynical I know. Just seemed a bit too clever for his own good. What he has done here is very impressive, but whether he is a real genius or a shifty individual has yet to play out. I am not sure at all to be honest and genuinely interested in how this plays out.

[arthur_lame_stocks] 02/8/2022 19:14

Well Alta Fox have clearly moved on from when the VCP report was written when they were a one man band. They now have a small fund investing on behalf of a few clients. They're still hardly a major outfit and Connor has been spectacularly wrong about VCP.

[mysteronz] 02/8/2022 18:19

Exactly drk1 no surprises there. Probably paid stooges.

Why do they care about a yacht. There is no a analysis. The revenue is less than acquired businesses, maybe they discontinued some low margin work, consolidated etc. figures to suit narratives

[drk1] 02/8/2022 18:13

I also find it more than a tad of a conincidence that the tweets suddenly appear at the back end of a sustained short attack (which has been ongoing for weeks), even though they refer to events that transpired (and where reported to the market) some years back.

[mysteronz] 02/8/2022 18:05

So they have someone doing M&A advisors… ok.

They have sensitivity to energy

The CEO has a yacht…… ok

The CEO has lent out shares…. Ok (in the public domain)


I’ve emailed IR to see what they say about the rest!

[drk1] 02/8/2022 17:55

Not quite Arthur, but hey-ho. ;-)

[arthur_lame_stocks] 02/8/2022 17:50

FWIW ALta Fox is not a broker or a bank it's a one man band investing his own and his family's money as indeed most of us do. He was just talking his own book with a flash looking website which has suckered some of you in.

His opinions are no more credible than anyone else's here.

[ldrcvm] 02/8/2022 17:25

See also @milesdyson1960

[ldrcvm] 02/8/2022 17:23

Money laundering mainly

[drk1] 02/8/2022 17:22

Twitter??? I'll stick with Alta Fox. ;-)