Nothing's like Nvidia :o))
Shire's PBT margin last year was almost exactly 9% - and was 13% in H2. Margins in this H1 improved to 9.4%. I imagine with the H2 weighting that margins will be considerably better than even that in H2.
And with Shire on course for over £50m turnover this year and say £60m-£65m next year, with economies of scale continuing to grow, £10m PBT becomes a viable target over time assuming ceteris paribus.
Whatever the case, VLE is still very undervalued despite today's rise. |
Very simplistic indeed IMO Rivaldo.
Even if Shire makes an historically high 6% margin, to make £7.7m PBT would require revenue of c. £128m. That's an increase of c. 150% on this year's likely number. They might do that over 5-10 years but not 1-2 IMO.
Big increase in H1 profits is down to operational gearing, increased investment returns, not magical pie performance.
Great stuff from VLE and should be north of £20/share IMO but this isn't Nvidia! |
A very simplistic extrapolation shows that £10m PBT isn't so far off in time (I too had similar reservations initially about this!).
Shire made £2.1m PBT in H1, up 180% from last year.
It made £3.1m PBT in last year's much seasonally stronger H2. A similar 180% rise this H2 means £5.6m H2 PBT.
That's a total ££7.7m PBT this year. At the current rate of growth it's possible to see £10m PBT for Shire next year or the year after.
As an aside, there's been an early cold start to September, which will also be beneficial to Shire. |
Bit undercooked that. Try 12x |
Bit fanciful.
£5 million seems possible x 80% (to reflect ownership) x 75% (tax)= £3 million. Stick it on a mean PE of 8 = £24 million
Add £24 million cash and investments.
Ignore interest on cash and PLC management charges and costs.
Total assets = £48 million / 2,219,000 shares = £21.60 per share. |
Just a pre coffee look at Table A Shire stepped up from 0.6m to 3.5m last year. We just did 2.0m H124. |
Could be on track for 10m full year pbt from shire alone.
REALLY! How so? |
I genuinely believe Shire is worth far more than VLE's entire marketcap to a predator. The H1 performance in Table A is astonishing. Could be on track for 10m full year pbt from shire aloneThese remain in the bottom drawer, very dull but significant upside for patient holders IMO |
Congrats to everyone who's stayed the course with VLE |
Today's H1 results deserve a "Wow". Terrific stuff.
And this is the seasonally much weaker period for Shire!
Net assets are up to £15.85 per share, and group cash has increased by almost £3m to £24.3m - despite paying for substantial share buybacks.
Industry leaders must surely eye up Shire at some stage and conclude it's worth a great deal given these results and its consistently good track record: |
Second half of September for interim results - 29/9/22 & 19/9/23 were the dates in the last 2 years |
When are the next results or trading update due? |
Possibly, but there may be a question about the amount of cash (as a proportion of NAV) and the length of time it's been there. |
I thought that Volvere was an 'industrial holding company' and can have cash on its balance sheet like any other. It is not as if they are an Investment Trust or similar: the cash is there to buy real, trading businesses when the opportunity arises.
This leads me to believe that the shares would qualify for full business relief.
Asagi (no position) |
I suspect it may partly qualify - the business would qualify and the funds held for investment would not. I'm not sure how HMRC deal with that, given that the share price is independent of the value of the assets. |
Thanks for relaying those helpful comments. The 'risk adverse' one probably explains the absence of recent acquisitive action.
A side issue which assumes increasing importance in my advancing years is the AIM qualification for IHT relief. Although it currently has food manufacturing as its principal (only?) activity its objective is to buy, turn round and sell off companies. As such I think it may be disqualified as a búsiness asset.
Anyone have a view on this? |
Jeff256 has posted some notes from the AGM elsewhere - hope he doesn't mind me pasting them here...it all sounds promisingly efficient and sensible as ever:
"Summary of my AGM Notes:
Commodity costs stable which is helpful for margins
Investing in capacity and efficiency improvements.
Increasing size of mezzanine floor.
Have invested in packaging to remove bottlenecks & increase line speed.
Priorities are maintaining and building long term customer relationships, with quality critical & new products important
Has been consolidation among competitors in recent years. Not all have strong balance sheets, so that can be an advantage with customers.
For acquisitions, looking at all types of business, not just food. Like people businesses.
As usual, they seem to be honest, capable & very risk averse." |
VLE never issue any AGM updates! So it's difficult to be disappointed.
Only just over two months until the interims anyway. |
Rather disappointing to have no AGM statement…R30;unless of course things are going on behind the scenes 🤞🤞🤞 |
Another £147,500 of shares bought back at 1475p:
That's around £1.29m now bought back since March. |
Anyone have any thoughts on what price they would pitch if they did a tender offer? |
A further £74,250 of shares bought back - at 1485p, the highest price to date if I recall correctly: |
I think you are missing my point. According to their stated investment strategy they shouldn’t be buying back shares at this price. |
For the record, another £74,000 of shares bought back at 1480p:
Remember that VLE bought back a further £916,000 in March, as well as the £148,000 in the last few days. So the cash pile will have reduced by over £1m, but the true NAV per share will have increased nicely since the year end.
Zoolook, a stated true NAV including a sensible valuation for Shire would indeed be extremely helpful! But it isn't going to happen without a value-defining event as it's subjective. Perhaps the market should take its cue from the normally very conservative Nick Lander's willingness to buy back large quantities of shares at 1480p.... |
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