Well the cash pile is now close on £1m lighter after the 79,000 share buy-back! |
Re the above valuation, he's used a straight 25% tax charge on Shire's £3.64m contribution to VLE after intra-group management charges et al.
Firstly, the tax charge is unlikely to be precisely the full 25% due to capital allowances and super deductions. Let's call it a conservative 22%. Secondly, imo we should use Shire's PBT before intercompany charges etc, which is £3.86m. Thirdly, let's be a tad more generous and use a P/E of 8 given Shire's terrific track record and apparently excellent competitive position.
That gives Shire a £19.3m valuation. Add in the £23.74m cash and the total is £43.04m, which is around £18.50 per share.
Happy to be corrected/struck down! |
A starting point for discussions re valuation posted from Jeff256 elsewhere - will have a think myself about this tomorrow:
"Well, the pie business is making £2.73m after tax. Apply a PE of 7 on 80% ownership and we get about £15.3m. Add £23.74m cash and we get £39m
Approx £16.90 per share." |
Agreed - I'd certainly consider a tender offer at the £15 or thereabouts NAV for part or all of my holding. |
I don't often get my timing right, i have also topped up managing 11.20 i would hope for a tender offer at NAV once they have executed the identified M&A. |
Fingers crossed they will sort out the ridiculous cash situation….the patience of shareholders has been greatly tested so either make a acquisition, hand back the excess cash through a divi or tender offer, or sell Shire and distribute everything 😂 |
The final sentence is also interesting - perhaps they're suggesting special dividends here?
"we are focused on enhancing shareholder value and, inter alia, continue to monitor and review our ongoing requirements in terms of the cash required to deliver our strategy" |
Indeed it is very good…..although why couldn’t they issue the RNS at the normal 7.00am 🤔
Have topped up…. |
The trading update is out - and it's terrific:
- a PBT of £4.75m! Including the £1.1m gain on Indulgence's properties, but it's a great headline....
- Shire Foods made a core PBT of £3.86m (up from £2.78m), up almost 40%....
- the cash pile is up to £23.74m, against a £24.8m m/cap!
- NAV is up to £14.82 per share and £37.5m
Even better:
- investment opportunities are improving
- and re Shire:
"We have been encouraged, however, by the levels of new business opportunities we are seeing in Shire and remain cautiously optimistic for the remainder of the year"
In the year when JL so sadly passed away, congrats to Nick in particular. |
I bought in last week for the first time, sucked up the spread on the basis that the marketcap is in cash and shire is essentially free. Downside is the illiquidity and lack of corporate action, a trade sale and company wind-up would add a lot of value here. |
Worth noting that in the last week (assuming that the 1075p trades are buys) there's been 5,652 shares bought and none sold, i.e around £60,000, with no effect on the share price. Which is most unusual for this stock. Presumably there's a seller in the background, but it's also good to see the stock getting bought up.
Hopefully this'll clear the way for after the results - or perhaps a trading update soon given last year's was on 14th March. |
News that Aldi is spending £550m this year expanding its store network, and wants to grow it's current 1,000 stores to 1,500. Which should be good for Shire: |
I saw Naughty Vegan as moving Shire up the value chain rather than being just a contract manufacturer. |
Yep, they lost their main listings in Morrisons. The No Chicken Chip Shop Curry Pies were actually pretty good. Disappointing as there could have been some really nice hidden value in the brand. Obviously Indulgence failing meant the Naughty Vegan Cheesecakes also hit the buffers undermining the range. |
I think the last time the “Naughty Vegan” brand was mentioned in an RNS was in the 2022 finals: “A number of products manufactured by us won awards in 2021, not least the BBC Good Food Christmas Taste Awards 2021, in which our product won the Best Vegan Main category. Naughty Vegan, the Group's own vegan brand, won The Grocer's Best Vegan Party Food Award for its No Piggy in the Middle sausage rolls. Whilst we continue to develop Naughty Vegan, we have a limited budget for brand development, which means that progress is inevitably slow”
I’m guessing the brand hasn’t taken off enough to warrant a mention. If so this is a shame as a successful brand obviously has value to prospective purchasers over and above that of a pure contract manufacturer. Maybe as a contract manufacturer they lacked the ‘appetite̵7; and brand development expertise to invest nor the customer demand for it to grow fast of its own accord. |
elsa, what you're saying seems like saying "vegan stuff isn't selling well so Tesco is a poor investment". Companies make and sell what's in demand. It changes all the time. |
Do you suppose the reduction in demand for vegan food means that vegans are choosing not to eat? Maybe they've gone over to the dark side. |
And if the demand was there would they not be producing as many pies as possible already. You only switch when you have the orders.
Where's that education minister......... |
Exactly Zangdook
Elsa is being simplistic. Products come and go... |
Shire make pies and pasties. They don't look vegan to me. If the vegan range doesn't sell they can ramp up the meaty side. |
But vegan ranges have seen large falls in sales.....Are these guys bucking the trend? |
HNY to all here.
Both Aldi and Lidl have today reported their best ever Christmas sales. Which hopefully augurs well for Shire Foods: |
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