Volvere Share Discussion Threads

[melf] 25/9/2017 15:32

Thanks simso and Riv. I'll probably help myself to another lot when it drifts back below £8 as investors get bored waiting for news :-)

[simso] 25/9/2017 14:40

Melf: You sound in a similar position to Graham who writes the Daily SCVR alongside Paul on Stockopedia. His job means he must analyse more companies in detail that I could shake a stick at, yet I think Vle is one of only 4-5 actual holdings, so he must really believe in it!

Rivaldo, thanks for highlighting that blackthorn focus event I will try and come! ref the selling, it seems a feature for a few shares in our remarkably similar portfolio's at the moment...but I think its a mark of how far a lot of these things have risen this year and some wanting to top slice and trouser a bit of the money. It will be interesting to see what PTSG and TAP have to say tomorrow!!

[melf] 25/9/2017 12:28

I keep saying that's my lot, as VLE is a third of my portfolio and by far my largest holding. However, when the dips come, such as the recent dip below 700p, it just becomes too tempting!

[rivaldo] 25/9/2017 12:19

Cheers simso - 1458p per share represents a nice 75% upside from here.

Agreed re the underpinning. It's amazing to me that there's been a few sells this morning - can only be (1) profit-taking (2) overweighting in portfolios or (3) impatience, since for anyone with an iota of patience the high upside and lack of downside here is patently obvious.

VLE are presenting on October 11th in London as follows along with Creightons and probably one or more other companies - it's free to register. The downside is that I'll probably be there :o))

[simso] 25/9/2017 11:56

Hi Rivaldo, if I removed those 3 levels of prudence, then the NAV would increase to £59.4m (£14.58 a share).

This just feels so well underpinned, and also a great each way bet on the economy: if the next couple of years are better than most commentators predict, then one could see Impetus and Shire steadily improve further...and perhaps Impetus might get another big contract or two if they prove successful in delivering this one. If the economy is worse, then more distressed opportunities will come our way, with a huge cash pile at the ready to exploit them.

[rivaldo] 25/9/2017 10:57

Simso, out of interest, what's your NAV if you factor in say 10% growth for Impetus and use the correct minority interests and bonus calculation?

[simso] 23/9/2017 13:39

nfs..thanks, still stand by the £13.89 as the right final answer, but I miss-typed one number from my model into the post when explaining the calculation. Gross Value of £47.2m, take off minorities (say 20%) and bonus (say 10%) and the Net Net is £34.1m. Add my forecast cash of £22.5m and you get £56.6m (£13.89 a share).

I think some prudence here in assuming no organic growth for Impetus in H2 (H1 was +20%), also I have rounded up the Minority on Impetus from 17% to 20%. The Brothers bonus would only be 10% of the INCREASE in NBV and not the TOTAL NBV as my crude model assumed. Prudence everywhere!!

[nfs] 23/9/2017 12:11

Simso post 2580-a small pointThe total value shown is unfortunately arithmetically incorrectAn error or around £2m to push the share price estimate towards £13Still a wide margin from the actual price!

[nfs] 23/9/2017 11:54

A small maths pointSimso posted above a calculation and got a value of £56.6m but that's not the sum of the 2 numbers he's adding. The resultant share price is thus nearer £13. Still a wide margin from the current price!

[zoolook] 23/9/2017 11:46

As long as VLE keeps ticking up on positive updates then in a strange way I hope that the market continues to price this below its "real" value as it prevents me agonising over whether to sell or not

[rp19] 23/9/2017 11:43

Although not anything the above posters don't already know, there is some positive attention on the following blog which might help to garner a bit of wider interest.

[modform] 22/9/2017 16:38

It's being noticed slowly, the cheapest stock you will find in this market.

[hpcg] 22/9/2017 15:56

I can't really understand who was offering the stock at 800, and today just shy of that, but it looks like its cleared. I was able to increase the value of my holding by 50%, though alas not the share count. Or is that alas, I'm not sure. Anyway I'd expect this to settle at a tenner?

[rivaldo] 22/9/2017 07:22

New highs now, despite VLE being so far under the radar that this bland summary is almost the only coverage I can see anywhere:



This has to be a combination of one of the most undervalued, one of the safest in terms of downside and one of the best-managed companies on the market imo.

Simso, nice summary. I'll update the thread header when I get time.

We'll call VLE's current value a nice round £14 per share for the time being including something for Sira.....

[eezymunny] 21/9/2017 21:23

Maybe melf. Berkshire Hathaway paid one once, while nice Mr Buffett was in the bathroom...

www.investopedia.com/ask/answers/021615/why-doesnt-berkshire-hathaway-pay-dividend.asp

[melf] 21/9/2017 21:11

If IAL continues at this rate I wonder if we could be nearing a maiden dividend. Perhaps even when the full year's are announced. Any thoughts?

[simso] 21/9/2017 12:21

A "sum of the parts" valuation as follows:-

1. Shire: My profit assumption for H2 is that it will match last year's H2 of £1.02m. We are now past the anniversary of sterling devaluation, so the negative impact on margins has worked through. The re-pricings they have progressively done through H1, and also the fact that sterling in H2 may actually be better than H2 last year, may make the out-turn better. A full year out-turn PBT of £0.78m, I apply a lowly rating of 5* Post Tax Earnings to derive a value of £3.1m.

2. Impetus: I am hoping for at least £3.7m PBT as already explained. I would value this much more highly, and think a market average P/E of 14 times is prudent given the growth and contractual backing for the earnings. Value £41.4m.

3. Perhaps harshly I give no value to Sira.

4. £2.6m of NTAV given that it is mostly freehold property.

That gives a Gross Value of £47.2m, from which I deduct 20% for Minorities and a further 10% for Bruvva's Bonus for the increase in value created....so net net £31.2m. I would expect year end cash to be at least £22.5m, so my total SOTP valuation of the business is £56.6m (£13.89 a share).

I bought some more this morning on the basis I am always happy buying £10 notes for a fiver!

[russman] 21/9/2017 12:14

Impetus sums it up.

[nfs] 21/9/2017 12:02

Joined you all todayThe market has not, in my view, caught up with the impact of the new acquisition -yet

[simso] 21/9/2017 11:27

I have updated my own model on this to come up with what I think is a conservative/realistic valuation, and will detail that out later in a separate post. However, its fair to say that Impetus now appears even better than I had previously thought, and I will explain below:

THis is an important point in teh narrative on Impetus:

"The revenue growth against the comparable period is due partly to the commencement of the contract noted above. However, combined other activities grew by just under 20% too, which was very pleasing. The combined effects of these significantly increased profitability by more than £1 million in the period".

By deduction this means that £1.6m of the £4m Sales growth must relate to the "other activies" (ie 20% of £8.2m), meaning that £2.4m is new contract. If we assume that the profit growth can be split in proportion to the sales...then £0.6m of the £1m growth is the new contract. THE POINT IS THAT IS ONLY 3 MONTHS WORTH, as the contract only started in April. The second half growth from new contract alone could therefore be £1.2m. Even if I prudently assume no other growth at all, then the second half would be profit of £2.2m, and the full year could be £3.7m.

Nice.

[greenroom78] 21/9/2017 11:08

That's been my view. ST can be good for trading if you catch him bang on midday and operate first in first out, but I don't get time nowadays - hence holding things like this that I can almost forget about.

[hpcg] 21/9/2017 10:55

Ha, I have had the same thoughts! I figure it just needs one good idea a year and it pays for itself.

[greenroom78] 21/9/2017 10:38

Thanks, I do subscribe but very rarely find time to read it. I should either find time or cancel it.

[hpcg] 21/9/2017 10:12

Greenroom - yes he does, it was in his bargain share Portfolio of 2016 and he tends to keep in touch with companies he has followed before. So ... I have added as he is likely to point out the still large gap between the intrinsic value and the market cap.

Edit: Seems like a reasonable line available at 802, no trouble buying.

[greenroom78] 21/9/2017 10:03

Blimey - Loads of posts. Lovely set of results to catch up with, I'd love to see a broker cover this for a real valuation. Does anyone know if Simon Thomson from IC covers this at all - this would be right up his street?