gretel
18 Dec 2015
VLE still has large upside I posted the following elsewhere on 12th June 2015, and came to a valuation for VLE of 700p per share currently rising to 1000p+ if Impetus is successfully turned around.....you'll note that (incredibly!) I got the £8m JMP disposal price correct to the penny 
))Here's my summary:Based on the potential disposal values below, which equate for JMP, Shire and Sira to an additional £14.7m or 360p or so per share, and subtracting say 100p per share for assets disposed of, one could value VLE at around 700p per share.Adding in say an eventual £10m of additional value for Impero, i.e almost 250p per share, and you're looking at a valuation of around 1000p+ per share. VLE now comprises: (1) The £19m of net assets, i.e 431p per share (2) 76% of JMP Consultants (100% acquired May'13, less 24% then issued to management via shares), which has proven an absolute bargain imho. This could be worth say an additional £6m (see below) (3) 80% of Shire Foods - could be worth £8m (see below) (4) 100% of Impetus Automotive - could be worth say £11m upon turnaround (see below) (5) 100% of Sira Defence (see below) - could be worth £0.7m (see below)JMP is one of the UK's leading independent transport consultancies. It has 150 professional staff providing services in transport planning and related services. It works from a network of nine offices in locations across the UK:[link] the 12 month period ending 31 March 2014, JMP's unaudited revenue was £11.8 million with an adjusted PBT of £0.6 million. Yet VLE acquired JMP for just £415,000 in mid-May'13 following working capital financing problems. In the next year or so JMP could well be worth £8m to a larger consultancy company imo given these figures. At 76% ownership this would be worth £6m to VLE on a sale. Shire Foods, which manufactures frozen pies, pasties and other pastry products for retailers and food service customers, is now seeing the fruits of its turnaround post-acquisition in July'11 for £0.5m, with £12.1m turnover in 2014 and a £0.8m PBT. Shire also owns substantial £m's of freehold property and equipment. Including the latter, Shire could be worth say £10m to a purchaser, i.e £8m to VLE. Impetus Automotive (IAL) was acquired in March'15 for only £1.26m. For this VLE got: - £1m of net assets - £12m-£15m of turnover - a company previously making £1.5m PBT who appear to have had a bad year in moving to a small £0.1m loss. IAL provides "consulting services to the automotive sector, including vehicle manufacturers, dealerships and national sales companies. The company, which has UK offices in Warwick and Cranfield, employs approximately 200 people serving clients in the UK and a number of other international markets. Further information on IAL's activities can be found at[link] Defence has around £2-300,000 of annualised revenue and made £80k PBT in 2014. As a provider of hardware and software surveillance solutions to the UK Police, judiciary, local councils, gambling industry etc, its solutions - developed in liaison with the Home Office and Met Police - are very slowly gaining traction and usage. Sira Defence could be worth say £0.7m.
thirty fifty twenty
18 Dec 2015
at 440p analysis of disposal WOW what a great sale of JMP !- 8m total price of which VLE get 5.5m after 25% mgt share and 0.5m bonus to VLE mgt team.it values JMP at c.55% of t/over! and 12x PBTas a comparison WTM (is valued at 35% even after recent rises though JMP did have higher margins). Learnings from transactionFor me between the lines there are a couple of very positive points1 - the launders are NEGOTIATORS. JMP is a simple enough business and they have achieved a great sale price. 2 - given the recent price slide for several months they can deal without insiders trading the shares.,.... (this is important because it means that when we shareholders start to doubt) there can be a deal around the table!Valuation of VLEI value VLE on a simple and conservative basis (taking a 2 year view) 1 - Net Assets after expected profits of current businesses2 - I am prepared to pay a 10% premium to Net assets because,on average each of VLE transactions has added +25p of NAV per year for the time VLE has owned the business.3 - I take a 50% view on the likelihood of sale > NAV for current businesses.4 - I take a 50% view on the likelihood of ONE new business transaction which will add value.I like this approach because it is based more on the certainty of NAV,and the transaction deal track record of the mgt teamand less on the theoretical value of businesses held.before today this gave me a value of 590p a share (taking a 2 year view) (+55% from c.380p)applying the same approach gives a current value of 680p (taking a 2 year view) (+60% from c.440p)so despite the price rise actually better value than yesterday!the downside is a the spread and the likely need for it to be a multi year hold,but the discount to asset value is so large.All IMHO, DYOR + BoLVLE is in my portfolio
forwardloop
18 Dec 2015
Re: Excellent news - JMP has been sold Very many thanks for the synopsis which has saved me some work!They certainly got good value out of JMPI wonder what event could happen so the full value of this co gets recognised in the share price.Its been a long-burn for me.FWD
gretel
18 Dec 2015
Excellent news - JMP has been sold RNS - JMP's been sold, and for £8m too, of which VLE get £5.5m...so another 130p or so of cash in the bank:[link] takes VLE's cash pile (including the £0.5m deferred) up to over £17m.And that's without any value at all in the share price for the other 3 businesses, Shire Foods, Sira Defence and Impetus Auto.Hopefully we'll see a big jump this morning - ideally at least 130p. It'll probably be a lot less knowing the market, though actually it should be quite a bit more than that to reflect true value.....Not a bad return on JMP's £0.4m cost. Congrats to the Landers - once again.If Shire were also to be sold that could bring in another £8m (including the property etc).Given the Landers' track record, the share price really should be well above 500p now imo.The good news is that the 31/12/15 results and NAV will reflect the JMP disposal, so should show perhaps an NAV of say 550p-600p.
thirty fifty twenty
03 Nov 2015
at 365p recent falls not surprised to see profit taking here, it really is 5 year hold share and suspect that many buying on momentum early in 2015 are jumping ship.can see nervousness re Impetus and impact by VW scandal,also the unknown re any trading losses of the £11m CASH invetsed.on the upside the excellent CEO interview at WTM and progress at WYG can only be good news for JMP.That said there is no chart support until 335p so it might drift further whatever the NAV.All IMHO, DYOR + BoLVLE is in my portfolio
thirty fifty twenty
08 Oct 2015
Re: VLE presentation summary hi Gthanks for posting the summary of the meeting.on 12 mth view taking WTM at 100p it will be on just over 35% of sales.looking at JMP it has higher margins that WTM so would justify a higher ratio.what actual ratio used, bid premium etc.... it is academic at this stage is one values VLE's 75% of JMP at 3.5m or 5.5m, even the lowest figure is a juicy premium to the 1.5m book value. in fact organic turnover growth in JMP alone adds 15p a share to NAV based on 40% valuation.All IMHO, DYOR + BoLVLE is in my portfolio
gretel
07 Oct 2015
VLE presentation summary On Monday I attended a presentation by VLE in London organised by Blackthorn Focus through David O'Hara. Once again, cheers David (and also to the Landers for agreeing to it):[link] was of course a blue riband event - the first ever such presentation by VLE anywhere, anytime AFAIK....It took place at one of JMP's offices, and was attended by around a dozen or so interested investors who are part of Blackthorn's investor "circle", 4 or 5 of whom it turned out were already VLE shareholders.IMO the Lander brothers presented extremely well and persuasively. The overall outlook certainly appears to be as positive as most believe it to be on this thread.Of course nothing of a price-sensitive nature was disclosed, but I propose to briefly outline a few points of interest: - VLE pay no tax on disposals of investee companies due to "substantial shareholder exemption" - new opportunities come in every day, so you can tell that the Landers are extremely picky, but it was interesting that they generally have only a maximum 2 weeks for due diligence, which makes their track record even more impressive - VLE have no sector restrictions for investment, though they do like "people" businesses. Their methodology is very positive in that they aim to invest (via software, people, whatever) to turn the business around with the help of existing management if possible, whilst cutting out any dead wood, and of course incentivising them through 20%-25% stakes in the company - potential investees could have revenues of between £10m-£100m - there could be 2 to 3 company acquisitions a year under the existing management team, i.e there's capacity for further imminent acquisitionsShire Foods - cost £0.54m plus w/cap loans of £2m (all now recovered from memory) - their refrigeration systems were upgraded at a £600k cost - Shire own their freehold, against which there are loans - I got a distinct sense of optimism as regards prospects for ShireJMP - 50% of revenue is consulting to local authorities, transport planning etc, and 50% is engineering, design etc - usually has a better H2 than H1 - it was noted that Waterman (WTM) are pretty similar and have just announced excellent resultsImpetus Auto - perform audit checks for car manufacturers on auto dealers as well as aftersales services, and they provide certain software tools - it's a people business, and as yet there have been no great "surprises" (for which presumably read "nasties"
, which is good news - it's already only mildly lossmaking post-acquisition, and again there seemed to be some optimism/cheerfulness hereI raised my usual bugbear re lack of promotion of the company and share price, whilst thanking the Landers for this opportunity, but I suspect nothing much will change.Other points were made (again all previously raised at AGMs etc!) as regards potential special dividends, share illiquidity, share buybacks, use of shares for acquisitions if the share price were higher etc.Incidentally, 305020, good spot re WTM! Looks like that valuation to sales ratio is going to improve quite a lot....
thirty fifty twenty
05 Oct 2015
VLE at 415p read across from WTM WTM had great results this morning confirming growth in the infrastructure sector for a few years yet.WTM is valued at c.30% of revenue but seems undervaluedJMP has revenue of c.£15m so 100% valued at 4.5m and VLE 80% stake at 3.5m,it was bgt for c1.2m, has repaid this amount through dividends and is valued at NAV of c.1.2m.This investment adj alone adds 50p to VLE NAV (to 480p)in addition to the fact that it confirms mgt ability to find and improve turnaround situations.Hmm I wonder if WTM might be interested in a bolt on acquisition with their CASH.All IMHO, DYOR + BoLVLE is in my portfolio
gretel
29 Sep 2015
VLE is completely off the radar! We have here: - new share price highs - an £11.7m cash pile against a £17m m/cap - NAV higher than the share price with almost nothing included for the value of the subsidiaries - brighter than ever prospects - and profitability - for the three core investees - and a strong start for the new and fourth investee (Impetus Automotive)Yet AFAICS not a single share was traded yesterday or today ))Investors are evidently happy to lose their money in resource companies, or blue sky situations, or recovery stocks with 50/50 chances of success, or....whatever.I'm torn between wanting more recognition/activity for VLE, or being happy with being so far under the radar since it allows for top ups as and when. But it would be preferable methinks to see the share price up at say 600p+....Incidentally, 305020, good to see another poster here. My own instinct re Impetus is that VW will need more work, not less, from the likes of Impetus given that they will need to maximise falling sales and improve customer relations - which is exactly what Impetus do.
thirty fifty twenty
28 Sep 2015
Impetus and VW Any views is Impetus will benefit from VW chaos?That would be interesting to find out more at the presentation!My instinct is that VW will pull in the horns re training etc.. at the dealerships,why spend more training how to sell when the public not turning up at the door??in fact, I would knock £1m off the value of Impetus until it was clearer to me the impact of VW.Thus for me adj NAV = 625p.All IMHO, DYOR + BoLVLE is in my portfolio
the wise owl
28 Sep 2015
Re: Good interim results today Welcome aboard.Gretel and I have been here some time,good to see another shareholder.
thirty fifty twenty
28 Sep 2015
Re: Good interim results today Hi GretelWell done on your very early spot on this business at much lower prices....The slight negative you mention is just where they have used CASH to buy Impetus - (see the Net Asset analysis in note 2 of statement).Holding value of the trading companies is reduced b/c JMP has paid 0.6m CASH to the holding company. It is very hard to see downside...Good mgt, good track record, very obviously NAV less that true value, AND 300p of CASH!!All IMHO, DYOR + BolVLE is in my portfolio
thirty fifty twenty
28 Sep 2015
at 420p, adj NAV of 650p+ Seems great update from VLE and I see they are doing their first investor presentation on 5th October so must be feeling confident!Business quite simple to understand – it holds CASH + trading companies.CASH = £12m (300p a share)JMP will make profits of c.800k in year to Dec 15 on t/o of 12m+I’d value that at c.£6m (see WYG, WTM) but its in the books for only 1.4m! [ thus adj to NAV = + £4m ]Shire will make profits of c.2.2m in year to Dec 15 on t/o of 18m+I’d value that at c.£10m (see RGD, FIF) but its in the books for only 5.3m! [ thus adj to NAV = + £5m ]Impetus will make profits of c.100km in year to Dec 15 on t/o of 8m+I’d value that at c.£2m and its in the books for only 1.5m [ No adj to NAV ]SDS will make profits of c.100k in year to Dec 15 on t/o of 300k+I’d value that at c.100k and its in the books for c.nil ! [No adj to NAV ]So with quite conservative assumptions that’s takes NAV from £19m (432p), to £28m (650p).No the proof in valuations is when mgt sell the businesses for the valuations, but they had a GREAT track record having increased NAV from 100p over 7 years. And the ICING on the cake is that there is £12m for mgt to spend to make a really big deal.I am only recent to the party at 400p and it seems cheap with little downside – well doen to anyone on the ball spotting the value at 300p 9 months ago!All IMHO, DYOR + BoLVLE is in my portfolio
gretel
28 Sep 2015
Good interim results today Interims are out, and they're pretty good, showing a nice £0.79m PAT (£0.37m before investment gains) and a 432p NAV:[link] initial standouts: - each of the 4 businesses are doing even better in this H2 than they did in H1 - Shire has continued last H2's form with a pleasing profit in the seasonally weaker H1 - Impetus is only making relatively small losses already post-acquisition - JMP is making slow but definite progress, hindered this time by a couple of one-offs - Sira is progressing, if slowly, and remains profitable - VLE have almost £12m net cash against the £17m m/capI'm guessing that VW will soon need plenty of help from Impetus in helping "the effectiveness of vehicle manufacturers' sales and after-sales networks"!One negative is a loss in value on investments in the period.
gretel
18 Sep 2015
News flow pre-interims An exciting day yesterday by VLE's standards ))15 buy trades, and no sells, totalling 22,610 shares in 1k and 2k lots - yet the share price is unchanged. Great to finally have some liquidity, with a seller meeting demand for shares pre-interims, which should be next week as usual.I'm starting to get intrigued (and it's about time!) by Sira's prospects following the tie-up this Feb'15 with the American company MotionDSP via their product Ikena Forensic 5.0. For example, in April MotionDSP announced this use of IK5.0 by the International Justice Mission:[link] this from April'15 (p.3) shows Sira being awarded a £24k contract by the Met Police for support and maintenance for Siraview software, so they're evidently still using it: hxxp://www.met.police.uk/foi/pdfs/lists_and_registers/corporate/contracts_over_%C2%A32500_q4_january_march_2015.pdf
