Lion Rock
09 May 2016
Conclusion Hi Tejo et al.....well it has certainly been interesting this past week. It is now apparent it is an MBO by the Aerospace Div management with city backing. Although not confirmed I would expect they have acquired the IPR for composite pipes for jet engines and this is to be set up at Hinckley therefore leaving the main composite facility at Buckingham to remain with the Group. I suspect they will now be well down the road of test manufacture of the 3M3 boxes for Sellafield at £47k a pop of which the initial order is 1100 of about 40000 envisaged over the next 20 years. The announcement last week whilst surprising, will I feel in time prove to be a very shrewd move by a management I have come to have deep and abiding respect for!!
seadoc
04 May 2016
Re: Surprise announcement A surprise indeed. Mid 80s Stainless Metalcraft issued a profits warning and the sp collapsed. I bought a minor holding and still have it, alas not one I have sold and ISA'd. My sharescope was uploaded with data back to 2000 over which time the total return on AVG has been 122% and annualised at 11%. Boring, plodding but held, mainly because the directors have never attempted to award themselves mega salaries or ridiculous share options. The directors, present but mostly past, own about 1/4 of the company. The past directors built up the company on the basis of medical metal bashing, originally for CT but I think more recently for MRI. Most of the Sigma (aerospace) division has been contracted out for the manufacturing work to China rather than Chatteris. I guess it will not be long before the Chinese will have the skills to compete, and along came a good offer, sensible to sell? probably.But the net proceeds, "most of which will be returned to shareholders" are, as tejo correctly points out, on a par with the market cap. I do have some funds within my ISAs so may well top up tomorrow, if only to mitigate my tax bill. Hopefully there will be a scheme of A and B shares and I will be able to put some of the redistribution against capital gains over the next couple of years.Yes indeed, interesting,Regards,Seadoc
tejo
04 May 2016
Surprise announcement Thanks Lion Rock and it was indeed a surprise, although I had been slightly puzzled by the strength in the sp recently. What to make of it? The net amount from the sale, even after the expensive transactional costs is in excess of the market value of the whole of the company, and way ahead of the last reported shareholders funds. Yet the sp to-day is only back to its previous recent high and far short of around 220p which one might have expected.Putting all that aside, one comes back to the question of what exactly is Avingtrans' business? I had thought that finally they had a sound business that could be developed and built on, but it seems they see themselves as a mini private equity company. Previous experience is not encouraging, They have trumpeted the Jenatec sale in 2012 but then spent several years in the wilderness with very poor trading results, that we have discussed here several times. Metalcraft has woken up and looks good but there will be plenty of delays and uncertainties in the nuclear business.The private equity outfit buying the aerospace business sees plenty of potential as indeed, so did I.At the end of the day, it does not really matter, I have only held the shares out of curiosity to see what would happen and only have a small holding anyway. As always, I will be guided by you wise observations and if you think that they are worth holding, then I shall do so, otherwise, maybe like the Board considers, now is the time to sell?? Time will tell how much the shareholders will receive and how much goes in developing the company.
Lion Rock
04 May 2016
Surprise Announcement [link]
Lion Rock
18 Apr 2016
Re: Interesting Times Hi tejo - Good to see you as always, yes an interesting article that shows as you say Metalcraft at the front of the technology queue. I will enquire as to patent prospects at the AGM if I get there, please let me know nearer the time if there any questions you would like me to ask. The boxes for Sallafield will provide an excellent bedrock of work for the future if nothing else!
tejo
15 Apr 2016
Re: Interesting Times Thank you Lion Rock and good to see that you are still on the case! I do not know how you find these nuggets. The liquid air energy storage technology reads well but I am not sure that it actually stores electricity. It seems to me that it stores the means of generating electricity as and when needed which, no doubt, is highly desirable. What I am more impressed with is that Metalcraft has the capability and technology to be right in there with these developments although it is not clear if they can patent the application. All very encouraging and interesting. Thanks again.
Lion Rock
14 Apr 2016
Interesting Times. Hi Tejo - indeed the RR 10 year contract is good for the aerospace division as well as the ongoing initial contract for 3 metre cubed boxes for Metalcraft for repackaging nuclear waste.Also this is interesting: [link]
mcescher
14 Mar 2016
Intrinsic value £2.33 Guys would you agree that AVG is looking like decent value atm? These guys are targeting £2.33, well depends how you read it.I came across is on this site:[link] surprised of their AIM coverage!!
tejo
10 Mar 2016
Sigma deal with Rolls Royce Happy to read about the Sigma deal with Rolls Royce, mainly because the ten years provides the company with somewhat of a platform from which to develop a sustainable business.
Lion Rock
19 Feb 2016
Impressive Interims [link]
Lion Rock
29 Jan 2016
Acquisition Acquisition of Rolls-Royce pipe manufacturing business Avingtrans (AIM:AVG) is pleased to announce that Sigma Components, which forms Avingtrans PLC's aerospace division, has agreed to acquire Rolls-Royce's internal pipe manufacturing businesses in Nuneaton, UK and Xi'an, China for £3.5m, which is being funded by the Company's existing debt facilities. Avingtrans designs, manufactures and supplies critical components, modules and associated services to the aerospace, energy and medical sectors Sigma has developed a strong relationship with Rolls-Royce over a number of years, by supplying components for numerous engine programmes. As well as strengthening the Group's UK manufacturing footprint, the Chinese facility complements the Group's existing operations in Chengdu and will further enhance Sigma's offering to global aerospace OEM's in this key growth region. The acquisition will also reinforce the Company's position in several key engine programmes - notably the Trent XWB - and provide a strong platform from which to grow sales across our wider product range.Sigma will use the combined capabilities of its UK and Chinese facilities to offer competitive commercial terms to Rolls-Royce, as the XWB programme grows rapidly. This acquisition will grow Avingtrans' Aerospace sales significantly, as Sigma continues to strengthen its position in the core markets of pipes, ducts and fabrications.Rolls-Royce's internal pipe manufacturing business employs 132 people at its Nuneaton facility, with an additional 110 personnel working at its Xi'an site. Operations will continue at both sites following the completion of the deal. At completion, around the beginning of March 2016, the acquired assets are expected to be £3.5m and, in the previous financial year, to December 2015, the business traded at an approximately break-even level.Steve McQuillan, CEO of Avingtrans, said: "This acquisition is a key part of our strategy to support Sigma's growth with investment in businesses and technologies that complement our existing capabilities. We are delighted to be working with Rolls-Royce on these major programmes."
Lion Rock
21 Jan 2016
Update I sent an email a few days ago to Steve McQuillan the CEO, to ask what sort of timescale was perceived before volume production of composte pipes for jet engines would be envisaged. He replied with the following: "Regarding composite pipes, we are a good way down the track now and we have started to put prototype parts on next generation test engines. As you might appreciate, the OEMs are not going to run up complex and expensive tests just for us. We have to jump on the bandwagon when they are ready to put us on a new platform alongside other test parts. During 2016, this prototype testing will begin to happen. However, we can cautiously expect another 3 years or so after that before we would be on any new engine types in volume. Airframes might be faster in some applications and we’re working on that too. Meanwhile, just having the technology is opening doors to other business with aerospace OEMs. We’re also looking at other adjunct applications that can move more quickly – eg high end automotive (but not Formula 1!)"
tejo
20 Nov 2015
Re: AGM report Many thanks Lion Rock for your patient explanation. They sound like a group of intelligent hard working individuals still searching for a sector which promises steady growth and where their expertise and technological advantage will be a barrier to competition. Easy to say but hard to find, yet until they do there will always be the risk of a return to the situation at the start of the year where there was a dearth of orders and an apparent lack of direction.. They should ask you to become Director of Strategy but until then I will leave you in peace and look forward to watching developments. Thank you again.
Lion Rock
17 Nov 2015
Re: AGM Report Hi Tejo - Very sorry to learn of your wife's' diagnosis and I fully appreciate your comments. To try and answer your question I think there are aims/goals but perhaps more complex than I can answer I was going to pass the CEO's email address for you to ask the question directly. My thoughts are that as far as Aerospace is concerned they have a steady stream of business in pipe/tube manufacture for RR and turbine blade polishing but they are looking to move towards composite manufacture of such items as that is the trend in aerospace production in order to save weight - the big enemy! Fabricating items in composite as a main supplier initially to airbus and hopefully beyond is the aim along with manufacture of more complex items where they can gain IPR rights and therefore command greater margins. They are looking to an entry in the US in the future but last years problems delayed that ambition, I believe that is where the real market is.In terms of E&M they are looking to harness their niche capability ie Pressure vessels in MRI scanners and now the oil market this puts them in a commanding position as not many companies have their capability and more significantly, industry approvals. They are very conscious that they will not expand too quickly and getting into trouble because of it but I think the problem is also that it has taken time to find their direction because of the hotch potch of businesses that they started out with at birth as detailed in my previous post,. I appreciate I may not have answered your question but hope it goes a little way towards some form of explanation.
tejo
15 Nov 2015
Re: AGM report Thank you Lion Rock but after some time, my wife has finally had her illness diagnosed, unfortunately as MND, and I am now largely ignoring investment activities, in order to focus on her care. Hope to meet you at an AGM one day Will follow AVG and hope all goes well. Thanks again.
