Volvere Share Discussion Threads

[jitters3] 17/5/2019 19:42

Results 24th May

[russman] 03/5/2019 05:59

Have not had a share buyback for a while.

[rivaldo] 30/4/2019 10:49

Well over £100,000 of shares traded yesterday and today. Very brisk by VLE's usual standards.

[rivaldo] 25/4/2019 09:16

Shanklin, the guy from Iceland seemed to be saying that Iceland had absorbed the cost. Of course, whether they absorbed the full cost is another matter....but I suppose if this is being done at their own initiative then they'd expect to cover a large proportion themselves. And the new machinery must be a lot cheaper to run for Shire given presumably longer/increased production runs.

[cockerhoop] 25/4/2019 08:12

Price of Everything, Value of Nothing!!

[shanklin] 25/4/2019 07:54

I wonder who absorbed the extra cost of the palm oil free pies.

[rivaldo] 25/4/2019 07:53

Cheers davidosh - part of a long segment about the hard work that Iceland have put into making palm oil-free pies, and interviewing the guy at Shire who's put this into practice.

Not particularly revelatory in itself, but good to see Shire at the forefront of these latest advances, which might bring them new business from other retailers wanting to cut down on palm oil.

Looking around, you could tell where Shire's investment has gone - lots of shiny, new-looking machinery and production lines.

[jamtomorrow2] 23/4/2019 17:27

Hope it’s nothing to do with horses.

[davidosh] 23/4/2019 12:55

Fellow VLE holders should watch tv tomorrow night....Main subsidiary #ShireFoods will feature on #SupermarketSecrets tomorrow at 8pm on BBC1. The secrets of pie-making!

[rivaldo] 28/3/2019 13:55

Found one of Sira Defence's new-ish partnerships - here's news dated 21/2/19 from Xenario UK, specialists in digital asset management:

[rivaldo] 26/3/2019 06:42

The IC's Simon Thompson is still backing VLE - this was posted yesterday:



"Viva Volvere

In a pre-close trading update, Aim-traded investment company Volvere (VLE:1,200p), a constituent of my market beating 2016 Bargain Shares Portfolio, has announced that its net asset value per share surged by 89 per cent to 1,248p in 2018.

As I noted when I last updated the investment case (‘Bargain shares: On the M&A beat’, 22 October 2018) after the company announced the disposal of its largest investment, Impetus Automotive, a provider of consulting services to the automotive sector, the sale would produce eye-watering returns for Volvere’s shareholders. In fact, the company has received net proceeds of £26.1m for its 83 per cent stake in Impetus, a thumping premium to the £4.8m carrying value of the investment and 21 times the £1.25m capital Volvere originally invested in March 2015. This also highlights the midas touch of Volvere’s founders, Jonathan and Nick Lander, who have the respective roles of chief executive and finance director, to successfully invest in distressed and undervalued businesses with a view to turning them around and exiting at a hefty profit.

The disposal leaves Volvere’s balance sheet is a rude state of health. Net cash of £34.1m equates to 1,093p a share, which means that the company’s 80 per cent stake in Leamington Spa-based food manufacturing business, Shire Foods, and a small software firm Sira Defence that develops products to help the police use CCTV effectively, are effectively in the share price for around 100p share, or £3.1m. That seems harsh given that Shire has just reported a pre-tax profit of £0.79m, up 23 per cent year-on-year, and Sira has entered into a number of reseller partnerships that are “expected to make a contribution in 2019 and beyond.”

True, Volvere’s shares are at an all-time high and have risen by 150 per cent on an offer-to-bid basis since I advised buying, at 419p, in my 2016 Bargain Shares Portfolio. However, given the Landers mightily impressive track record – Volvere’s book value per share has increased at a compound annual growth rate of 17 per cent since the company listed its shares, at 100p, on Aim in December 2002 – then they are still worth backing and I would run your profits ahead of news on the next turnaround situation they plan to invest in. Volvere’s annual results will be announced on Friday, 24 May 2019. Run profits."

[rivaldo] 25/3/2019 09:34

Interesting news - 2 Sisters have recently sold their Green Isle pie business (as highlighted in my earlier post re JL's presentation). They received €22m for Green Isle alone, and between €30m and €35m in total to 2 Sisters group for the Green Isle and Donegal Catch businesses, which apparently make combined profits of €3.6m.

2 Sisters have been disposing of businesses to reduce debt and to cover losses since the hygiene scandal last year, which "which culminated in the suspension of orders by major UK supermarkets and a parliamentary enquiry":





It would be interesting to see Green Isle's profitability. The overall sale appears to be on a multiple of roughly 9 times profits (presumably pre-tax?).

Of course Shire also own the £2.6m freehold property/factory which would supposedly cost £10m to set up from scratch.

I wonder if the buyers might be interested in scaling up further with the acquisition of Shire.

[zoolook] 22/3/2019 17:20

Graham Neary has some commentary on tuesday’s report. He’s a cautious investor and Volvere is his largest holding representing 16% of his portfolio value.

hxxps://www.stockopedia.com/content/small-cap-value-report-fri-22-march-2019-vle-spe-pmp-tfw-xar-sfe-460783/

[texas_caddy] 22/3/2019 13:41

Thanks rivaldo. All sounds promising and very content to hold for the long term here.

[rivaldo] 22/3/2019 11:31

TC, no specific breakdown was given by supermarket. But last year's sales were £18.3m - a very healthy 15% rise over 2017. And the indication was that the introduction of the third production line would add another £9m to sales, i.e there must be continuing increases in demand from Shire's customers guaranteeing take-up of additional supplies.

[texas_caddy] 22/3/2019 09:57

Thanks very much for sharing rivaldo. Certainly sounds positive.

Interesting about supplying Aldi/Lidl - with them grabbing market share from the traditional supermarkets that hopefully bodes well. Did they give any more detail on this, i.e. what level of sales are they currently providing Shire, what (if any) is growth rate etc.

Also pleased to hear about move to healthy vegan/veggie lines - this is one area that seems set to grow quite nicely in the coming years.

[hpcg] 22/3/2019 09:46

Sira has certainly gone up in my estimation. I have previously valued at zero but it probably has trade sale value if nothing else.

[rivaldo] 22/3/2019 09:42

Here's my own notes from JL's presentation FYI....

GENERAL

- it would apparently cost £10m to build Shire's factory from scratch. Food for thought re the potential sale price for Shire......
- VLE prefer to acquire businesses with revenues between £10m-£100m, suggesting that they're open to purchasing larger businesses. No sector restrictions, prefer people businesses
- 30% IRR is minimum requirement
- VLE have "too much cash" at £34m+, so more share buybacks are on the cards
- this was the first time I've ever seen JL so optimistic and forthcoming about Sira Defence
- VLE might consider buying in the quoted co/PLC market (which they've done before with NMT)

SHIRE

- Shire has a 50,000 sq ft factory in Leamington Spa, with 160+ employees. They supply frozen (NOT chilled) pies/pastries to Lidl, Aldi and Iceland, and Morrisons to a smaller extent with party food
- party food represent a new product launch in 2018, alongside other launches like peppered steak, beef & vegetable, hunters chicken and veggie options like mushroom, stilton & cranberry, caramelised onion & goat's cheese, curried cauliflower & kale etc, for which input costs will of course be lower....
- Shire are concentrating on new healthy and vegan/meat-free/vegetarian lines
- the new third production line will be funded by extremely cheap bank finance directly to Shire, not with VLE's core cash pile. It should grow Shire's profits by "quite a lot"....adding another £9m of revenues to the existing £18m+
- Shire's principal competitor is Green Isle, owned by the huge Chicken King operation (as Pukka Pies do mainly chilled). Shire are probably the largest player...and are looking to expand into the larger supermarkets. Though of course Shire are already supplying the fastest growing UK supermarkets...

SIRA

- is now "the provider of the UK industry standard universal digital CCTV viewer"
- almost all its £300k revenues are recurring
- JL is "confident in 2019 we'll see the fruits of" new international partnerships
- used by over 80 police forces worldwide
- has unique IP

[rp19] 20/3/2019 18:39

Thank you for sharing, interesting insights. Pretty hefty investment planned at Shire. If that pays off (may take some time) then the ultimate sell on price should be significant. Prospects sound interesting at Sira too. Held for some time and happy to continue to do so.

[rivaldo] 20/3/2019 11:37

fwyburd has posted elsewhere an excellent summary of JL's presentation yesterday - I hope he doesn't mind me copying it here. It covers most of the main points, but I'll see if my notes contain anything additional when I get time:



"Re: Volvere (LON:VLE) (I hold)

I attended Jonathan Lander's excellent presentation yesterday at a Blackthorn event in London.

In summary the net assets of £40.3m equate to @12.48 per share; cash of 34m equate to £10.95 per share. The balance sheet valuations of SIRA and Shire foods are at cost (£30K and £0.54m respectively). Shire made a PBT of 0.8m which conservatively should value it at 4.6m today. With the extra line they are putting in (from 2 to 3) profits should increase by a third and their product developments sounds very sensible (vegan; vegetarian; healthy pies). Might be opportunities to supply the major supermarkets although Lidl, Aldi and Iceland are alreary clients. It also sounds like they've learnt a lot about the industry which suggested to me he would contemplate more food manufacturing acquisitions.

SIRA sounds fascinating as it has unique IP for CCTV feed harmonisation (ability to convert multiple sources of CCTV imagery into one feed). Revenues currently £300K with 80 police forces around the world buying their services but they have been pushing IP licensing globally in 2018 and expect sales to ramp up in 2019 albeit from a very low base.

He recognises they have too much cash but will never pay a dividend (unless they have large underlying dependable revenues which they don't have at the moment); rather he prefers to buy back shares as its also better from a tax point of view. He said they might look at public transactions but will never compromise his goal of 17% compound growth yoy which they have achieved over the past 17 years.

As ever he was entertaining, transparent and straight forward.

cheers
Francis"

[yamaha865] 19/3/2019 07:30

Looks good- but nothing on what they will use all the cash for! Another buyback would be welcome

[asagi] 19/3/2019 07:25

rivaldo, I tip my hat to you.

Asagi (no position)

[rivaldo] 19/3/2019 07:24

As predicted, the trading statement is out today:

- 1248p net assets per share, including a £34.1m cash pile (against a £33m m/cap)
- Shire Foods increased core PBT to £0.79m. The prognosis sounds more encouraging than I hoped, with customer growth and new product lines. They're throwing significant investment at Shire - I trust their judgement, but any sale price will have to be quite significant for decent profit over the acquisition price and subsequent investment
- even Sira is looking promising, with a £60k PBT, and "a number of reseller partnerships were signed in the period, which are expected to make a contribution in 2019 and beyond"
- the overall group profit was affected by £2.5m of Impetus sale bonus payments. Frankly these are large, but we have to accept that they're well deserved - if it hadn't been a multibagger then no bonuses would have been due

The core value of the cash pile plus Shire Foods (including the £2.6m freehold property) plus Sira remains quite a way above the current share price, and much more so once that cash starts getting reinvested.