Volvere Share Discussion Threads

[cockerhoop] 25/5/2021 14:52

I'd need to do some pretty deep due diligence to buy anything off Luke Johnson!

[norbert colon] 25/5/2021 11:54

Sector news:https://news.sky.com/story/johnson-bakes-fresh-250m-bid-to-sell-resurgent-gails-cafe-chain-12316547

[rivaldo] 18/5/2021 13:27

A reminder that the 2020 results will be out soon - "on or around 28 May".

Surprisingly (imo) there's been a few small sells recently which have seen the price drift a little. With lockdowns now almost wholly lifted VLE should see a swift recovery in food service sales to restaurants, educational establishments etc. Including pies at football matches (on a small scale anyway!).

I also suspect the increased sales via home deliveries will continue permanently, even if not at the pace of the last year, given the continued transition to home working.

[rivaldo] 15/4/2021 21:42

Nice £15,400 buy at 1540p reported after the close.

[rivaldo] 14/4/2021 07:57

With the reopening of cafes, pubs, restaurants etc, and with the gradual reopening of stadium and mass attendance evets etc now on the horizon too, food service sales for both Shire Foods and Indulgence Patisserie should benefit nicely.

[smithie6] 13/4/2021 10:47

you Naughty Vegan !

:-)))


------

£10k buy showing at 1500p
nice size trade.

(super illiquid share; small buy volumes & up it goes; & vice versa I guess)

[caterham88] 13/4/2021 10:22

Just paid 1500p, and happy to do so. This share has rewarded me over many years, and provided the Landers are motivated, I'm sure will continue to rise in value.

[smithie6] 13/4/2021 08:27

the sh. price is in a wide range, since ~ July '20.
1350p to 1500p

rising now towards 1500p


will it then again fall back to 1350p, or not, this time around. ??

[smithie6] 09/4/2021 10:55

anyway, fingers crossed for the Indulgence part of the business, cheesecakes etc

with the pubs etc re-opening a bit more on Monday 12th April then Indulgence might see more sales, & the same for Shire as well, for pies.

[smithie6] 09/4/2021 10:52

an illiquid share

my guess is that phps the MM wants to obtain shares to balance/nett off against the £7400 of shares that he sold at 1480p

[rivaldo] 09/4/2021 10:35

Online you cannot buy a single share, whereas you can sell 2,500 shares at 1444p - above the mid-price!

Hmmmm...something in the air?

[rivaldo] 08/4/2021 22:02

A late £7,400 buy at 1480p reported just before the close is notable for being well above the 1450p published offer price.

[9degrees] 07/4/2021 13:26

intersting reveiw thanks
Volvere are a bit like IP (IPO) or Melrose (MRO) both of which invest in either start ups or companies they can turnaround

[rivaldo] 07/4/2021 11:08

FYI here's a recent write-up from a new holder here:



"Volvere

Volvere is an interesting business, quite unlike any of my other investments. It is essentially an investment vehicle that invests in small undervalued and distressed businesses and then tries to turn them around before selling them again. I’ve been aware of Volvere for a long time, have been to several investor presentations over the years and many of the other private investors I know have invested. I’ve always seen the attraction but have eschewed it up till now, preferring to stick to my favoured hunting ground in more growth-oriented quality businesses.

Volvere is very small (only £36m market cap). It owns two operating businesses at the moment, Shire Foods (Volvere owns 80%) and Indulgence Patisserie, both in food production. However, most of Volvere’s assets (about £24m) are currently held as cash. With so much of its assets in cash my normal framework for assessing the quality of prospective investments is less relevant. I see an investment in Volvere as essentially a bet on two things: a) that you are getting good value on Volvere’s existing investments and b) more importantly, that Volvere is going to invest the cash pile it is sitting on wisely.

There is not a huge amount of information to go on (at least without some serious digging), but it seems pretty clear regardless that Shire and Indulgence are collectively worth quite a bit more than the £(11-12)m of market capitalisation they account for. Shire was a beneficiary of the pandemic, growing revenues by 18% to £27.2m in 2020 and making £1.6m in profit before tax. Volvere seems to have had quite a bit of success in turning around Shire since it acquired it and its revenues have been consistently growing for several years. Profits have not been growing quite as much but it seems that this is partly due to the costs of imported ingredients being inflated by a weaker pound. This seems promising as the pound has strengthened a lot more recently. Indulgence, which is more geared towards foodservice, has suffered from the pandemic. It is much smaller than Shire with £3.6m in revenues and a loss before tax of £1m in 2020. Of course, Volvere’s business is to ‘turn around’ Indulgence and return it to profitability. I have no idea how successful Volvere will be in doing so and consequently how much Indulgence is worth but it seems that Shire on its own is sufficient to make Volvere’s overall valuation relative to its current assets seem cheap.

Assessing whether Volvere is going to do something useful with its large pile of cash is largely a question of faith in the management. This is not something I typically feel well-equipped to judge, but I am reassured by Volvere’s track record. At least I am very reassured that they are not going to do something stupid, as they have historically been very cautious in making investments. The investments they have made have have tended to be very successful. The risk is more that they are perhaps too cautious and prone to letting their cash pile accumulate dust. This is a risk I am comfortable with. Overall I think this investment gives me some safe diversification from my other investments and the outside chance of some serious upside if they find a great opportunity. The one drawback is possibly that the shares are extremely illiquid so probably suited for a long holding period (but equally this may present an opportunity for small private investors who are prepared to be patient)."

[smithie6] 23/3/2021 11:19

I wonder if the company would consider changing its name & ticker to

"Vegan"

ticker
lse:Vegy
or
lse:vegn

:-))) je je

[smithie6] 21/3/2021 10:54

ah....thanks for that info

[rivaldo] 21/3/2021 07:45

Smithie6, Iceland are one of Shire Foods' major customers, for not only their pies/meat products but also their fast-growing range of vegan products, including their No Bull vegan range (which may be made specifically for Iceland - I think differently named ranges are made for Morrisons, Lidl and Aldi from memory).

[rivaldo] 19/3/2021 07:23

Iceland are trialling a new convenience store format called Swift, which if successful "could soon start appearing in cities and towns across the UK".

The more stores the better as regards VLE:

[rivaldo] 18/3/2021 10:18

Graham Neary will have updated here about VLE yesterday since it's been his largest holding for a while from memory - anyone got access (his spelling isn't very reassuring though!)?



"Reasurringly quiet at my largest holding
Graham Neary
March 17, 2021"

[norbert colon] 17/3/2021 12:40

This is always a useful read for insights on how British businesses are doing:https://www.begbies-traynorgroup.com/news/firm-news/almost-half-a-million-businesses-in-significant-financial-distress

[zoolook] 17/3/2021 12:27

Good to have a bit of insight why the next deal is slow in coming. I thought the cash raised was for an earmarked acquisition where heads of terms were already agreed rather than generally to stock up the war chest. With hindsight the buyback was unnecessary (though I’m glad they did :-))
As always this is an investment requiring patience (my largest holding by country mile).

“ More generally the number of companies in financial distress has not been as high as we might have expected. However, we believe this is due to the continuance of government support schemes - which may soon be withdrawn. At that point, we expect there will be a greater focus on balance sheet quality. The strength of the Group's balance sheet puts it in a position to be able to exploit the opportunities that we think will arise in the coming months. In the interim, we seek to continue to deliver growth and increased profitability in our food businesses”

[eezymunny] 17/3/2021 11:42

ExV

"The things you would logically do as owner of a business". And the people doing those things are doing them salary free? I think not...

[rivaldo] 17/3/2021 09:42

The HQ expenses are unlikely to be anywhere near the full £200k. Much or most of it is likely to be a method of funds transfer, as most intercompany management charges are. I will continue to use the company's own usage of the core PBT, but won't be posting any more on this subject as it's run its course.

EDIT : ExV, apologies, our posts crossed. We seem to have come to the same conclusion though!

[exv] 17/3/2021 09:38

The question, I guess, is whether these costs are necessary to maintain Shire Foods as a stand-alone entity. I would suspect not. In private equity it's normal for the management company to suck some money out of the subisdiaries via 'management charges' and other fees. In effect these are just a way to keep the lights on at the investing company in exchange for some high level consulting services, advice on acquisitions and growth, and other fun and games. The things you would logically do as owner of a business - but now you are charging for them.

I also imagine there are tax considerations. It is probably more tax efficient for Shire Foods to pay this management fee to get money up to the parent company than via a dividend. I'm not an expert on this.

I would be surprised if this £200k was actually integral to the functioning of Shire. I suspect any potential acquirer would view the £1.8m figure as the 'true profit' of Shire, not the £1.6m. For that reason I view the £1.8m as the more realistic profit figure. I hold the shares, though, so I am biased.