Volvere Share Discussion Threads

[jamtomorrow2] 16/4/2018 16:56

I wonder if Impetus is being affected by Vauxhall’s dealership restructuring announced today. Vauxhall say that they are suffering from reduced servicing and maintenance revenue due to the reliability of their cars!

[hpcg] 23/3/2018 19:55

Trade sales don't tend to go for 12x cash profits, but VLE in the comfortable position of being able to deal, or not, on its own terms.

[rivaldo] 23/3/2018 14:12

Indeed - 83% of a historic core PBT of £3.4m could be worth £28m on a post-tax reasonably conservative P/E of around 12, particularly in view of this unusually positive statement from VLE in the trading statement:

"there remain many opportunities for Impetus in what is a very large sector"

To be fair to Simon Thompson he does say £15m "or more".

So Impetus could alone cover most of the current £36m m/cap, let alone the £18.4m of cash, the £2.4m or so of freehold property, Shire Foods which made £0.64m core PBT and something for Sira Defence.

[russman] 22/3/2018 13:00

ST estimates Impetus is worth circa 15m.I value it higher. R

[rivaldo] 20/3/2018 22:46

FYI Simon Thompson (of the IC) has written this rather bullish piece on VLE:



"Volvere’s record results

Shares in Aim-traded investment company Volvere (VLE:1,000p) surged to within pennies of a record high after an eye-catching pre-close trading statement, thus justifying my buy recommendation, at 810p, last autumn (‘Exploiting hidden value’, 25 Sep 2017). I included the shares, at 419p, in my 2016 Bargain Shares Portfolio, so the holding is now up more than 125 per cent on an offer-to-bid basis.

The share price move is fully justified, too. That’s because the company’s latest NAV of £26m, or 656p a share, includes cash of £18.4m, so Volvere’s three investment holdings are effectively being valued at just £7.6m even though pre-tax profit for the 2017 financial year surged by two-thirds to £3.22m on record revenue of £43m.

The performance of Impetus Automotive, a provider of consulting services to the automotive sector in which Volvere has an 83 per cent stake, was the key driver. The business almost trebled its pre-tax profit to £3m on revenue of £27.1m, reflecting an improved client focus, staff efficiencies and a major contract for the management and delivery of a large automotive manufacturer's learning and development activities in the UK. Impetus is being chronically undervalued in Volvere’s accounts, accounting for only £3.3m of the company’s NAV, or just one times the subsidiary’s annual pre-tax profit. It could easily be worth £15m or more in a trade sale, or more than 400p a share in my view.

Moreover, Volvere’s businesses are cash generative, which is why the board was able to spend £3.46m buying back 10 per cent of the share capital last October. But cash on the balance sheet only declined by half that sum over the course of last year. Ahead of the full-year results on 25 May 2018, I would definitely run your bumper profits."

[rivaldo] 16/3/2018 10:27

Nice £11,700 buy at 999.85p this morning. Unusual for it not to have affected the price.

[rivaldo] 13/3/2018 14:03

All the (highly profitable) disposals to date have been to independent third parties. The same will presumably apply to Impetus, and to Shire Foods.

The Landers will want to fully dispose of these two at the right time and move on to new acquisitions. I'd say the chance of a float of Impetus is extremely low.

[russman] 13/3/2018 13:02

Float Impetus off into a shell.Bros can cream fees.That is the model.

[melf] 12/3/2018 14:06

I suppose a company that purchases its own shares, which VLE has on occasions, benefits from the share price being undervalued.

[russman] 12/3/2018 13:26

What is your estimate of Impetus current EV.I got base 30m.

[rivaldo] 12/3/2018 13:25

Simso, I agree completely and have raised the subject of research coverage on two or three occasions with the Landers. Their view is always that the share price will find its fair value over time and doesn't need any external help. I disagree, for the same reasons you've outlined.

The easiest route to gain coverage would indeed be a paid-for note from Equity Development, Edison etc, which would set out clearly and succinctly the profitability of the investees and the asset base in cash and property. It wouldn't have to even point at a specific fair value, but simply conclude that the value of the assets was likely to be some way north of the current share price. Then readers could come to their own valuations based on the evidence.

[hpcg] 12/3/2018 13:09

Looking at the chart it is difficult to say that the company doesn't attract investor attention.

[zoolook] 12/3/2018 12:25

I guess there is no benefit to them or the company to push the share price

[simso] 12/3/2018 11:40

If the Landers wanted the share price to be higher / increase Liquidity, I think one route to achieving that would be the commissioning some paid research.

As things stand, busy Fund Managers and also PI's who scan conventional metrics like PE Ratios (VLE is 25 on LY numbers), Dividend Yield (0%), PTB (1.4), ROCE (8%), FCF Yield (4%) etc etc. None of those convention metrics would point you to the exceptional value on offer here. It is a Unique company, and it takes some work and proper analysis, specifically a SOTP style valuation, to properly appreciate it. I suspect the Landers are not that bothered and would not want to spend the money on a piece of paid Research from an Edison or Whatman Howard, but I do think this is a company whose share price would benefit from one.

[rivaldo] 12/3/2018 10:45

Interesting that Graham Neary says VLE is "my largest personal holding by some distance, currently almost 20% of my portfolio".

Quite a vote of confidence in what is still an illiquid and small cap company. I wonder if he's ever met or even spoken to either of the Landers.

[glawsiain] 12/3/2018 06:42

Just in case some haven't seen the report by graham neary it is here:



He signs off with this (which hpcg also noted), which I rather like:

"When the results arrive, it will be interesting to see what are the £6.3 million in marketable securities which Volvere has purchased over the last year. The boost from rising short-term interest rates could have a lovely effect on the cash pile's profitability."

[zoolook] 10/3/2018 17:21

Seems hard to pigeonhole VLE. Possibly why it gets such a low rating.

[hpcg] 10/3/2018 13:51

For a true private equity model can I suggest we load it with debt before floating? Its not like fund managers like Woodford ever notice, and its other people's money they're playing with anyway.

[russman] 10/3/2018 11:26

It is a private equity model.General market is toppy.Maybe a small bolt on to Impetus to give it mass.Then float it off. Payday.

[boadicea] 09/3/2018 21:46

zoolok - I understand what you are thinking re. investment companies.
I am no expert but my limited understanding is as follows -

The point here is that Volvere takes a majority stake and necessarily consolidates and publishes full audited accounts of all its subsidiaries. There is usually no separate market in their subsidiaries' shares, only other minority holder or holders. They therefore do not need (in fact cannot) 'mark to market'. However, the accounts supply all the necessary information on which to value the company.

In contrast, most Investment cocmpanies are set up as Trusts that take only minority stakes in other companies and are required to publish their investments but not the accounts of their investments. They therefore produce (usually daily) a 'mark to market' valuation of their portfolio described as 'net asset value'. The market will take a view of their portfolio, strategy and management expertise and apply its own premium or (more often) discount to that figure.

In relation to Neary's throw-away comment, I don't think he would be so heavily invested if he didn't basically believe the figures to date. He may possibly wonder whether they can continue to buck the trend. But that is something the Landers seem to make a habit of!

[zoolook] 09/3/2018 16:07

Graham Neary has posted an analysis of the results on Stockopedia and reveals that VLE is now his largest holding comprising 20% of the value of his portfolio.

He describes Volvere as an investment company which doesn't sound right to me as I thought that would mean they would put a market value on the subsids but happy to be put right.

Also he says "..Impetus is bucking the trend and performing extraordinarily well, if these figures can be believed" which seemed a strange throwaway comment but then it is friday afternoon :-)

[boadicea] 09/3/2018 12:02

Paradise regained!

[rivaldo] 09/3/2018 09:15

Hello 1000p - good to see you again :o))

[hpcg] 08/3/2018 21:37

The cash pile isn't all cash:

... of which marketable securities represented £6.3 million (31 December 2016: £nil million).

Presumably money market funds or similar short dated notes, but it should be doing something.

[jimmywilson612] 08/3/2018 17:20

I guess the issue is that whilst they have the cash to invest in businesses, they only have a limited amount of time. If they take their eye off the ball, would Impetus suffer as a result for example?

Buybacks are good, but the share is so illiquid at times and it has taken me a while of getting a decent stake in the business as it has to be timed well.

It would be nice that they put the cash to some use whilst it's just sitting there, but it's hard to know exactly what without their being pro's and con's.