Volvere Share Discussion Threads

[rivaldo] 03/7/2015 16:01

Exactly, as regards the latter point on the service charge.

I don't know offhand if there is a "formula" as to how any bonus on disposal is calculated. However, I have my doubts as to whether it would be a full 10% if for example Shire or JMP were sold for what might be termed a "bonanza" sum. Perhaps they would simply get a flat amount rather than a full percentage. If you're bothered then contact VLE, as they're extremely approachable.

[clacre] 03/7/2015 15:35

Thanks Rivaldo. Of course you are right about the Lander brothers not owning any of the management shares - I'd totally forgotten about the declaration situation if they did. That's a relief.

I take it you agree with EezyMunny about the Lander brothers getting a combined 10% of the profits on a succesful sale.

So your view is that the difference between the 2013 (£396,0000) and 2014 (£551,000) management charges was caused principally by their 10% profit on the sale of IPT right? And this was shown in the Accounts as an Administrative Expense of £177,000?

[rivaldo] 03/7/2015 14:15

Almost £10k just bought at 380p.

And online looks great. You can only buy 500 shares maximum at 379.9p, whilst you can sell almost 10,000 at a premium at 373p...

Cheers Melf, bb2.

[battlebus2] 03/7/2015 13:49

Yes great info and share movement today :))

[clacre] 03/7/2015 09:47

Thanks EezyMunney.

[clacre] 03/7/2015 09:44

Thanks Rivaldo.

Do you know 1) for a fact or is that just your interpretation? They are management after all! I just wouldn't want to see them getting two bites of the increase in the value of the acquired companies (well three if you include the share price).

I don't disagree that they are doing a good job - I just want them to be fair to shareholders on the spoils. After all the ball is completely in their court on the timing of the disposals and the ultimate winding up of VLE. If in the meantime they are paying themselves high remuneration levels (or service charges if you like) out of profits but shareholders get no dividend then is that fair? I'm sure they would argue that share buybacks are more valuable to shareholders than dividends but it appears that those are becoming harder and harder to make as the free float gets smaller.

Any idea what the percentage of profits the Lander brothers get on a succesful disposal?

[eezymunny] 03/7/2015 09:41

Indeed. The last big disposal was Sira in 2009.



It was bought for £1.4m and sold for £8.6m. The Landers took around 300k each for that AFAICS (see 2009 Annual report) on top of the service fee that Rivaldo mentions.

So wise probably to knock c. 10% off the profits on sale achieved (we have AFAIK no bonus scheme formally documented).

I suspect the reason for discount to possible NAV on disposals is Mr Market being slow to recognise the fab turnaround of Shire (but share price rising nicely to reflect that!) A disposal of Shire/JMP in the foreseeable perhaps required to really kick start things in more spectacular fashion.

Don't forget the downside risks. IMpetus could be a drain for a while. Shire/JMP could suffer worse trading...but really the risk reward here still looks exceptionally good to me.

[clacre] 03/7/2015 08:49

Rivaldo - I've been following your interesting analysis of VLE over the years and have 3 questions basically relating to fairness to shareholders.

Firstly, when VLE state that they give away 25% of their acquired companies to management does the term management include the Lander brothers?

Secondly, I see that the Lander brothers received £500,000 in remuneration in 2014. Presumably if the acquired companies do well then they will continue to take high remuneration levels. This could really be equated to them taking a dividend whereas the rest of the shareholders receive nothing, which doesn't seem fair.

And thirdly, I might be wrong on this but I seem to remember reading something about it somewhere - do the Lander brothers receive any pre-determined cut/share/bonus (call it what you like) when an acquired company is sold for a profit?

The answers to these questions may explain the huge discount to real asset value. Is VLE being run as a Lander brothers benevolent fund?

[rivaldo] 03/7/2015 08:42

Welcome Melf, good to see you here - and agreed.

Online it's looking as encouraging as I've ever seen it. You can sell 9,000 shares at 368.16p, whilst you can only buy a maximum 2,500 at 380p as I write.

[battlebus2] 02/7/2015 19:23

Yes great to see the tick up, sorry i didn't get round to buying more :))

[melf] 02/7/2015 15:27

That was me Riv. Thought I'd dip my toe in here as I like the ratio of cash to market cap plus the management seem to be sound. Plenty of upside methinks.

[shanklin] 02/7/2015 15:25

Many thanks rivaldo

I will take a look at the header and have a proper look at the results.

Thank you again, Martin

[rivaldo] 02/7/2015 15:07

Good to see a 1,500 share buy cause the price to tick up. Nice small 10p spread too now at 355p-365p, though probably even smaller than that online.

[rivaldo] 02/7/2015 11:48

Hi Martin. Ask me an easy question why don't you!

Have a read of the updated thread header post. With my rose-tinted glasses on, and looking forward to a time when JMP, Shire Foods and Impetus Auto have all been turned around and sold, it's possible to come to valuations of 700p+ excluding Impetus. Assuming a successful turnaround of Impetus this could rise to 1000p+. As ever, happy to accept corrections to estimates/calculations.

IMO however, Shire will be sold relatively quickly, and possibly JMP soon after - in the next year to 18 months - assuming the two companies continue to progress as they are doing at present.

At worst, VLE is a marvellous sleep-easily-at-night share with a £12m-£13m cash pile not far off the entire current m/cap. At best it has potential to double or triple, but timeframes for this are dependent on news flow.

You can also be sure that management will not be spending shareholders' money on company promotion, PR etc - they will keep it back for further acquisitions or share buybacks.

[shanklin] 02/7/2015 08:07

Hi rivaldo

Thank you for your updates. Having attended the AGM, what is your hope for the valuation of VLE please, say 2 years out, based on the potential of the companies it currently owns?

Best wishes, Martin

[rivaldo] 02/7/2015 07:33

JMP continue to be busy:



"PTRC’s 13th Annual Transport Practitioners' Meeting
Submitted by JMP News on Wed, 01/07/2015 - 08:59

JMP’s team of transport planners will be out in force this week in supporting one of the UK’s leading transport conferences.

The JMP team has had five papers accepted for PTRC’s 13th Annual Transport Practitioners' Meeting, this year to be held on Wednesday and Thursday at London Metropolitan University. The five papers are:

On Wednesday morning the JMP papers kick off with Martin Higgitt, who leads JMP’s nationally renowned Influencing Travel Behaviour team, will present on “Lessons learned from challenging travel behaviour in York”

On Wednesday afternoon, Director Lynn Basford, from our London office, will lead a workshop on “Planning for Infrastructure through Construction Logistics Management”

Finally, to round out JMP’s contribution to the first day, our passenger transport sector leader Lee White’s paper is entitled “Development of the Iraq urban transport strategy”

For those of you who survive Wednesday evening’s awards ceremony and dinner, Thursday morning sees Leeds based transport economist James Jackson and transport policy specialist Martin Revill deliver a paper on the “Local economic benefits of investing in the East Coast Main Line rail corridor”

And last but most certainly not least, young professional James Rhodes will present his Transport Planning Society Bursary paper. James has won the prestigious award for best paper at the conference by a young practitioner for his paper, “An investigation of the relationship between transport and health”"

[rivaldo] 01/7/2015 07:27

Cheers sladdjo. You've jogged my memory - I also asked if, given the recent Impetus acquisition, whether VLE were now at essentially full capacity if another bargain acquisition came along.

JL confirmed that this was not the case - they could certainly handle another acquisition if one arose.

I do however believe that, with the new contracts ramping up, Shire will be sold first and hopefully within the next six months to a year. This would certainly free up management time.

[sladdjo] 30/6/2015 09:15

Thanks for your write-up, Rivaldo, covered all of the AGM points and good to meet up again.

Another aspect that may be of interest to others here is that JL said their focus is on acquisitions that require £2-4m of capital, but that even for opportunities that require a £10m investment there still isn't much competition so he feels that VLE still has significant room for growth.

[battlebus2] 29/6/2015 21:55

Yes thanks Rivaldo....

[plentymorefish] 29/6/2015 21:52

Cheers for the update Riv, much appreciated...

[rivaldo] 29/6/2015 13:52

Went to the AGM this morning, and very interesting it was too.

Four shareholders there - me, another PI (good to see you again mate), an.other PI, and Michael Marks, who said he spoke for around 10% of the shares (which if you add in Zimmerman's shares he almost would). Buchler was absent ill unfortunately (stomach complaint), so Board representation comprised the Landers.

We all noted our congratulations to the Board on the performance of the company, particularly re Shire Foods.

As regards the business itself, points of interest were:

- Shire Foods : the advance was due to winning new business and of course VLE's efforts in turning the business around. Shire's business comprises the "winners" in the supermarket battle, which I think we can take to mean Lidl, Aldi etc rather the Tescos and Sainsburys of this world, and Morrisons as well I think?

But the very noteworthy point was that the new contracts started only in July'14, so last year had only 6 months' maximum contribution. This year will therefore see a full year's contribution, so draw your own conclusions...

Shire still has more capacity available for further contracts.

And Shire's net assets alone were quoted at "more than £1 per share".

- JMP : the sector environment in general is "buoyant" for this company. It's worth noting the various framework and other wins for JMP outlined in the results narrative.

- Impetus : not much to say other than that, like the others, it's a very well-respected company with a good trading history. It lost a contract prior to VLE's acquiring it, with the holding company going into administration, resulting in a small loss pre-acquisition. The hard work of turnaround starts here.

There was a predictable discussion about the large share price discount to NAV (let alone the true value of the investee companies), and how it can be addressed/closed, share liquidity etc etc. Buybacks, paid-for research reports etc were talked about. I've raised these previously with JL and don't propose to write about this in detail here now as it's a well-worn path!

Hopefully the above is accurate, though naturally subjective.

[battlebus2] 24/6/2015 13:22

Thanks Rivaldo, may just add now :))