Volvere Share Discussion Threads

[cockerhoop] 05/10/2018 11:40

Zoolook,

The company currently has shareholder approval (until Sept 2019) to issue up to 545% of the outstanding share capital so whether in treasury or cancelled makes no significant practical difference.

[rivaldo] 05/10/2018 11:14

Exactly zoolook. Or in issuing shares to satisfy the exercise of share options (although from memory VLE has no or at most de minimis options in issue at present).

I agree Simso, a tender would probably be the easiest way once again of extracting further NAV-enhancing value and satisfying anyone who fancied an exit.

Interesting to see how Impetus' acquiror views their purchase - I didn't realise Impetus operated in Australia, China and Japan as well as in Europe:

[zoolook] 05/10/2018 11:07

Thanks hpcg. Didn’t realise that the issuing of new shares always required shareholder approval.

What scenarios would it be useful for then to do them to do this? Maybe when buying a company speedily with a mix of cash and paper?

[hpcg] 05/10/2018 10:05

zoolook - they can be issued again without seeking approval from the members. When I say issued, I mean sold or distributed, they would not be new shares but existent ones.

[zoolook] 05/10/2018 07:45

Quick question on something I don’t understand. What is the advantage in a buyback to holding shares in treasury (which I think Volvere does)as opposed to cancelling them?

[shanklin] 05/10/2018 07:17

simso

I see there was minimal time to respond to the last buy-back announcement. So presumably this was aimed at institutions and insiders not PIs?

At the least the tender price, set on 11-Oct-17, was equal to the closing price on 10-Oct-17

Cheers, Martin

[simso] 05/10/2018 07:10

Delighted with the news yesterday.

In my valuation, the most subjective number was the multiple for Impetus. I had plugged in 12* a projected £4m PBT, and it looks like the Sale was for just under 10*. Everything then works through, confirming that £23.1m will be net of a Lander Bonus of around 10%.

After the deal completes, we will have at least c£43.5m Cash, based on June Balance Sheet + Impetus Sale (although note that almost £3m of this is held back for 18 months). I suspect we will have generated a further £1m+ Cash from Trading since June, so Cash should be north of £12 a share. Given the Landers' impeccable record of deploying cash (Impetus has almost 20 bagged their initial investment in 3 years, and every single investment made over 15 years has been profitable), it seems bizarre that the current market valuation is still at a discount to cash. Personally, I would value cash with the Landers at a premium! Shire (incl Freehold), plus Sira and other working capital must be worth £1.50 a share on the lowliest valuation multiple.

I think the Landers will continue to be extremely careful. I remember Jonathan saying at the Blackthorn event last year that they were not about to risk 15 years of hard work building up the business by making a sizeable acquisition which didn't work. I predict they will continue to look for extremely cheap (certainly sub £5m) targets, be incredibly selective, and that £43m-£45m on Balance Sheet is far too much for our needs. Dividends are a non-starter given the marginal tax rate, and traditional buy backs impossible given liquidity. I predict a big Tender Offer to buy back shares....similar in nature but larger in scale than the one we did last year.

[jimmywilson612] 04/10/2018 16:04

The share is pretty illiquid as things stand so both the dividend and buyback has its drawbacks.

Above anything, I trust the Landers to make the right judgement call for VLE shareholders.

[rivaldo] 04/10/2018 14:55

I'd also welcome more buybacks, but with £43m+ of cash I'd have thought there's only a relatively small amount of shares which would be freely available to buy back anyway. Unless one of the larger holders like Andrew Cohen wants to top-slice or exit, which seems unlikely unless due to personal circumstances as VLE still trades at a pretty sizeable discount to its true NAV.

My hope is that the Landers have another deal in the works, or are intending to find one quickly, which has (as others have said) led them to expedite the sale of Impetus.

[yamaha865] 04/10/2018 14:14

Agreed re buybacks, if the share is trading at under net cash its a no brainer

[zangdook] 04/10/2018 14:07

Well, if they do distribute something, do it before the May woman reduces the pound to 50 euro cents so we can put it in something other than sterling cash.

edit. re Melf above. If they want to distribute more money I'd be happy with buybacks rather than dividend, as long as the shares are trading under reasonable value.
I'd also be concerned about the company holding a large pile of sterling through possible Brexit turmoil. I'm not sure how much of their cash they keep as cash.

[melf] 04/10/2018 14:05

The problem with a special dividend is that many people will get hit for income tax thereon and some of those at the higher rate.

[greyingsurfer] 04/10/2018 14:03

Since they said recently that they think there may well be Brexit related opportunities, this is surely not the time to start distributing cash?

[jimmywilson612] 04/10/2018 13:50

At least the Landers can concentrate more of their time to both Shire * Sira businesses.

Agree that something does need to be done with the cash pile. Either share buy-back or a special dividend.

[zoolook] 04/10/2018 12:51

Maybe one day the market will value this at a sum of its assets which includes its main asset - the exceptional track record of the Lander's to add extraordinary value

[zangdook] 04/10/2018 12:30

They have so much money now that if there's nothing coming up and the share price falls back another buyback might be worthwhile.

[shanklin] 04/10/2018 12:28

I wonder whether the sale was driven from the wish to maximise the return on Impetus, or whether VLE see some excellent opportunities for which the proceeds will prove useful.

Stating in their HY results that:

"Although through the first half of 2018 deal flow has remained steady, we did not identify any opportunities which we deemed worthy of investment."

certainly leaves the potential for a more interesting opportunity to have been identified since 30-Jun-18.

[hpcg] 04/10/2018 12:26

I'd like them to keep all the cash and buy a meaningfully sized distressed company.

[melf] 04/10/2018 11:55

What a nice backstop for the share price now :-#)

[xajorkith] 04/10/2018 10:50

Oops! Probably best I read the RNS before commenting in future.

Great news & very pleased to see the share price responding in kind.

Edit: surprised it’s fallen back as should be at least 1200p

[zangdook] 04/10/2018 10:46

What a pity this company is too complicated for Lloyds customers to understand, even now it's down to two subsidiaries and a large pot of cash.

[stemis] 04/10/2018 10:31

Proforma net asset value is £43.9m or 1197p a share, including net cash of £42.1m (1148p a share). I'm guessing the £23.1m they 'retain' includes their share of the £2.87m retention. They are left with a tiny business (Sira) and another which just about covers their central costs.

1175p share price looks pretty fair value to me.

[greek islander] 04/10/2018 10:18

The Landers will undoubtedly have been looking at many options for some time. They will have known about the Impetus sale for a while now. Expect an announcement in due course. Investing in companies is usually at a low level - Impetus was just 1.25m.
This influx of cash could lead to the purchase of a number of targets. However, just don't expect anything quickly. Volvere does not do quickly! Soon VLE will have an even more massive pot of cash. This has to be a better investment and a sounder one than putting your pension fund into a bank. If only VLE attracted the sort of speculators of an ASOS the share price would be double what it is today.
A special divi is a splendid idea to reward existing shareholders (many of them long term) when the company will soon be swimming in cash and we know what a poor investment that is.

[boadicea] 04/10/2018 10:17

It looks as if they might be getting ready for any exaggerated Brexit fallout opportunities. I noted the following line in their recent interim report -
"Volvere may perhaps, on balance, be one of the very few businesses to benefit from Brexit-led distress, provided it does not endure too long. We will of course assess any opportunities as they arise."

[spob] 04/10/2018 10:16

tried a dummy buy

could only get around a grands worth