Volvere Share Discussion Threads

[yamaha865] 20/2/2020 15:29

Nice little jump today

[eezymunny] 12/2/2020 08:15

FYI. Launching a food brand always seemed a reasonable idea to me. Will be interesting to see if it does well...

[yamaha865] 11/2/2020 19:43

Indulgence had FH property of £1.35m held at cost, looking back in the accounts this was purchased before 2013 and so should be worth significantly more. Also £1.4m of FH 'adaptations' which should enhance the FH value, and £0.5m of plant and equipment. According to the RNS the property assets will be held in a separate entity which i think bodes well for Volvere rationalising these assets and realising value if their is excess capacity.

Indulgences revenues have declined quite a bit over the last few years from £8m in 2016 to currently circa £5m. This would indicate that it has quite a bit of manufacturing spare capacity, and so possibly surplus manufacturing property assets. However, there could also be great sales synergies with customers of Shire which is a much bigger business, and so this could help utilise Indulgence's manufacturing capacity.

For Shire, based on its H1 turnaround and assuming a similar rate of revenue/profit growth as per H1, I think it could get close to £2m pbt.

So a year or two down the line, based on Indulgence's historic profitability and Shire's growth, we could be seeing combined £3m- £3.5m pbt. That's with £20m or so cash and a market cap of £22m.

All very speculative of course, but that is essentially the reason Volvere comprises about 30% of my portfolio!

DYOR

[simso] 11/2/2020 14:01

Yes there is lots of information in the IPL Accounts. The last Balance Sheet we can see from May 18 looked pretty strong, with Net Assets of £4m.

Fixed Assets £3.5m (mostly the Freehold and "Freehold Adaptation" , but also including £0.7m of plant and machinery which would appear to be an average 4 years old, given original cost of £1.4m and Depreciation policy is 8 years). There was £3m of Current Assets comprising £0.6m of cash, £1.4m Debtors and £0.9m of stock. There was >£2m of Creditors, so Net Assets £4m.

It is 20 months since that Balance Sheet of May 18, and could easily imagine £1m of those £4m Net Assets have been reduced by losses since. Probably mininal cash left, and Creditors further stretched and increased, I would guess. However, give that IPL was bought from Administration, it in unlikely that those Creditors will be paid in full...or anything like it.

One could still imagine the Landers have bought £20 notes for a fiver apiece again, and would back their turnaround abilities to return this to profit and cash generation.

[rivaldo] 10/2/2020 12:23

Good to see from IPL's accounts that they were moving into "free from" recipes. These are not only very popular but command high margins (those with coeliac disease particularly are forced to pay whatever is charged).

With scope to rationalise the freeholds (and maybe sell some or all of them) plus other synergies this purchase could be terrific value for £1.25m given a prior £7.6m turnover (currently £5m annualised).

[piedro] 08/2/2020 13:53

Thank you zoolook

[zoolook] 08/2/2020 11:22

Here Piedro

[piedro] 08/2/2020 11:18

yamaha8657 Feb '20 - 16:48 - 3245 of 3251
"Just looking at IPL's 2018 accounts"

yamaha, please excuse my ignorance, but where can the 2018 accounts be found?

TIA.

[cockerhoop] 07/2/2020 17:39

Baggs the Plum, Fig & Pistachio Sable

[eezymunny] 07/2/2020 17:33

Might be worth going to the AGM ;)

[jaf111] 07/2/2020 17:33

Looks an interesting deal although pretty small scale and will hardly make much of a dent on the cash pile.
Hopefully more deals to follow or a further tender offer?

[cockerhoop] 07/2/2020 17:32

Gross margin reduced from 32.5% in 2016, 26.5% in 2017 to 12.5% in 2018. They sight increasing European diary costs and supermarket closing the deli's as the reasons for the decline.

That's clearly the turnaround challenge but the factory looks modern and well invested.

[yamaha865] 07/2/2020 17:18

Some more digging, the FH property was held at cost of £1.35m in 2013, so it must have been acquired before 1 June 2013. So should be worth more now.

[cockerhoop] 07/2/2020 16:54

Revenue currently running at approx £5m down from £7.6m in 2016 when they made £1m op profit.

[yamaha865] 07/2/2020 16:48

Just looking at IPL's 2018 accounts, looks like turnover has declined quite considerably over the last couple of years. That might indicate that there is spare manufacturing capacity which could mean property surplus to requirements, or alternatively could be utilised by Shire.

Property values at 2018 were FH property at £1.35m, FH 'Adaptations' at £1.4m, and PPE of £0.7m

Only went into administration on 30 January which probably means limited price discovery

the more i read the more i like it :)

[martinthebrave] 07/2/2020 16:29

#VLE Acquisition of Indulgence Patisserie, which is in administration & manufacture's premium desserts. Rev's & PBT loss were GBP3.3 m & GBP0.23m. Shares clients with Shire. Paid GBP1.25m which is no more than "fair value". I Hold.

[yamaha865] 07/2/2020 16:08

An obvious potential would be to move the existing production to shires factory if there is capacity

[eezymunny] 07/2/2020 16:05

Another good deal under VLE's stewardship I imagine.

[rivaldo] 07/2/2020 16:05

New acquisition just announced - looks good. Nice and cheap at £1.25m for £5m annualised turnover, plus complementary to Shire in terms of clients.

I wonder if any of the one leasehold and three freehold properties can be closed/sold?

Hopefully some nice cakes at the next AGM too :o))

[rivaldo] 30/1/2020 11:56

Cheers glawsiain, will have to take a look. Per the comments, the vegan sausage rolls have had terrific reviews online, and the Iceland No Cheese & Onion pasties are also Shire's.

Interesting to see £34,500 of buys this morning yet once again no price movement - very unusual for VLE. Presumably there's been a line of stock available.

[glawsiain] 29/1/2020 16:59

Jonathan Lander in rare tweeting moment:

"Don't miss Shire Foods making @IcelandFoods vegan sausage rolls on TV: (Episode 3). Next week Xmas pies. Sundays at 8pm on
@channel5_tv."

[rivaldo] 23/1/2020 11:37

5,000 shares through at 1145p and 10,000 at 1132p this morning are huge trades by VLE's usual standards.

EDIT - another 5,000 through at 1140p. Presumably the earlier 10k is some sort of rollover/match for the other 10k.

[texas_caddy] 17/1/2020 18:04

Not forgetting potential of more acquisitions of course ;-)

[eezymunny] 17/1/2020 17:35

Agreed Texas.

I'm old enough and rich enough that not losing money is far more important than making it. Suspect I'll make another boatload here though :)

[texas_caddy] 17/1/2020 17:29

Yeah agreed Eezy though your risk is opportunity cost - if it takes 3/4 years to sell then over that time could you have got more than 40%?

Downside as you say very limited so a major plus. Happy to hold and be patient here!