Joey1
30 Aug 2016
Latest issue of Growth Company Investor: 'BUY' recommendation VICTORIABUYVictoria (AIM: VCP) results for the year to March read well. The company has grown by acquisition which flattered the headline numbers, but earnings per share rose 60 per cent. Free cash flow was healthy and helped bring debt levels down. Profit margins improved but there should be much more to go for here as management realises synergies from the enlarged group.Executive chairman Geoff Wilding’s comments on current trading and prospects were both upbeat and forthright. Not unreasonably, he read the media response to the Brexit referendum as a ‘ludicrous over-reaction… with hyper-ventilating commentators and hysterical luvvie wittering’!Crucially the UK business has seen positive trading since the start of Victoria’s financial year in April and there has been no drop-off in demand since the vote. Wilding also notes that over half the carpet sold in the UK is imported from Europe, so the devaluation of sterling brings an immediate competitive benefit for domestic manufacturers like Victoria. The strategy will be to take market share while also nudging prices up a little.Broker Cantor has upgraded its earnings forecast by 7 per cent for this year to 113.3p, with a similar increase for the following year. This leaves the shares looking extremely attractive on a current year p/e of 10.7 for annual earnings growth in the 15-20 per cent range over the next three years.Of course the risk is that those hyper-ventilating commentators are right and the UK enters a serious recession. Victoria has a lot variability in its cost base but a downturn would clearly hurt the investment case. However on current valuations at least some of this risk looks to be discounted. With further deals likely, they remain on the buy list.[link]
Hauler1
25 Aug 2016
Sometimes MHK gets mentioned on this board... Good Numbers from the "acquisitive" Group...DIVERSIFIED floorcoverings supplier Mohawk Industries Inc. says it will commit $600 million (£458 million) to capital projects through 2016 as it builds capacity at its worldwide production facilities.The company is the largest floorcoverings supplier in the world and operates assets across carpets, LVT, ceramic tile, wood and wood effect floorcoverings, many with a sizeable UK distribution footprint.In a second quarter earnings update, during which it posted its highest ever sales for a single quarter, chairman and CEO Jeffrey Lorberbaum said: “To optimise growth, we have initiated many capital projects that will enhance our performance this year and beyond, by expanding our capacity and improving our efficiencies.He said Mohawk was in the final stages of the start-up of a new ceramic, LVT and outdoor rug operation in the US, as well as investing in its European LVT plant, part of the recently acquired IVC operation.“We have begun additional expansion projects to support growth across our product categories: LVT and premium laminate in the US and Europe; ceramic tile in Mexico, Europe and Russia; and continuum polyester carpet, engineered wood and utility mats in the US.”He added that Mohawk was adding laminate capacity in Europe to support the next generation of technology featuring more realistic visuals and water resistance, as well as meeting anticipated LVT growth with an extra production line by the end of next year. He also said it had initiated the final phase of its Italian asset modernisation, referring to its Marazzi ceramic tile business.His words came as the acquisitive group advanced sales by 13.2 percent to $2.3 billion (£1.8 billion) in the three month to end June, bringing half year growth to 14 percent to $4.5 billion (£3.4 billion).Half year pretax earnings more than doubled, rising 118 percent to $576.1 million (£441 million).
Hauler1
25 Aug 2016
CARPET IMPORT NUMBERS...first 6 months "CARPET imports into Britain have risen in the first six months of 2016 despite a softer end to the half, where both tufted and woven varieties declined.Tufted carpet imports were down 2.3 percent to £47.8 million in June according to HMRC data compiled by The Furnishing Report, but are up 3.7 percent to £263.2 million in the year to date.Woven carpet shipments to the UK are 5.0 percent higher so far this year, at £57 million, but fell 5.7 percent in June to £8.7 million, the lowest outright figure in the six reported months so far..."
WDC1109
24 Aug 2016
Re: Australia home building up That's good to know - Victoria Australia will get its share and, together with the exchange rate improvement, this will really impact the Plc.Along with the positive outlook for the UK business, 2016/17 could turn out to be an incredible year for VCP!
WD in yorkshire
24 Aug 2016
Australia home building up Home building was up a healthy 9.7 percent at A$17 billion during the quarter, benefiting from historically low mortgage rates and brisk population growth.[link]
WDC1109
24 Aug 2016
Headlam interim results today Headlam interim results today. Encouragingly, they state the market outlook and demand for flooring remains strong post-Brexit. This is very positive for VCP.
WD in yorkshire
22 Aug 2016
Re: Help please Thank you Bovem, very plain. You sure know your UK Takeover code. I get therefore that this is a very ordinary situation, but I am left scratching my head wondering about the buyback option. Perhaps when acquisitions have ceased, debt repaid, a dividend is being paid and GW has run out of ideas they will consider buyback, but surely this not in the picture at this moment in time. Thanks aga
Bovem99
22 Aug 2016
Re: Help please I'll give plain English a go...Like most (maybe all) other PLC's VCP has, for the last umpteen years, had the right to buy back its own shares. This right needs to be re-approved by the shareholders at every AGM, so there is nothing new here - it was the same last year, and the year before that, and the one before that, etc. The reason shareholders have always approved this in the past (and will no doubt do again this year) is that while there is no obligation to sell shares to the company (the shares are simply bought on market like any other investor), should the company buy back some shares there are leas shares in issue and so EPS goes up with a resulting positive impact on the share price. Plus, shareholders are returned some capital. Re your first question. Under the UK Takeover Code a shareholder who amasses over 30% of a company's shares would be obliged to make a takeover offer for all of a company's shares. In VCP's case, Camden already has over 30% and a "whitewash" (the technical term for a dispensation to own over 30% without making an offer). Clearly the intention here is not for Camden to make a takeover offer, just for shares to be bought back by VCP. Because this may result in Camden's shareholding going up (if it does not sell its shares back to VCP) shareholders are therefore asked to waive Camden's obligation to make an offer for the whole company in this specific instance. In this case, its more of a technical legal requirement than anything else. Hope that is clear.
WD in yorkshire
22 Aug 2016
Help please In plain English, what is this all about?Camden currently holds 33.46 per cent. of the Existing Shares and in the event that the Company were to undertake a share repurchase in accordance with the authority being sought at the AGM, Camden would be required to make a mandatory offer for the remainder of the share capital of the Company. Therefore, the Independent Shareholders are being asked to waive the obligations that would otherwise apply to Camden in these circumstances pursuant to Rule 9 of the Takeover Code.Sounds like a strange obligation that is being waived.Also "In addition, the Company is again proposing to seek Shareholder approval to have authority to make market purchases of up to 10 per cent. of the Company's issued share capital." why is this? I know they have an incentive scheme for customers and this would remove the need to keep issuing new shares to facilitate this scheme.[link]
WD in yorkshire
22 Aug 2016
1608 A very welcome new high.
Bovem99
19 Aug 2016
Re: Strong Impressive AR and the share price progression looking good. One particularly impressive point from the AR I noted was that analysts have upgraded VCP's profit figures 12 times over the last three years but the company has come in ahead every time. Impressive.
WDC1109
18 Aug 2016
Strong "Buy" recommendation... Strong buy recommendation from Shares magazine today. VCP listed as one of the magazine’s top 6 post-Brexit stocks to buy.
Hauler1
18 Aug 2016
Re: Outlook bright to building on a stro... Thank you BovemWDC - hat tip
Bovem99
11 Aug 2016
Re: WDC... Here you go:Victoria (VCP) 1340pSector: AIM, Domestic Goods The shares jumped after Victoria reported full year results ahead of expectations. Sales doubled to £255m and pretax profit went from £7.9m to £18.2m. After exceptional items, it recorded a pretax profit of £9.3m, compared with a £1.6m loss before tax in the prior year. Earnings per share were 84.3p - almost 4p ahead of forecasts. After spending £28m on acquisitions of Quest and Interfloor and paying out a deferred consideration and aborted deal costs, net debt was £61.1m from £35.7m although the net debt:ebitda ration is a lowly 1.85x providing headroom for expansion. The constant phasing in of acquisitions makes direct comparisons difficult. UK revenues were up by 115% to £197m whilst operating profit including a £6m contribution from underlay manufacture Interfloor increased from £9.1m to £18.2m. In Australia, sales rose by 64% to £58.3m (15% organic!) following the recent election. Operating profit including £2m from Quest, a carpet manufacturer, went from £1.6m to £4.9m. Speaking to ceo Geoff Wilding, he notes that organic revenue growth across the group was 3%, driven by increased sales volumes. Since buying its five businesses, Wilding has kept them running autonomously although he has consolidated raw material buying. That and a change in product mix as a result of acquisitions led to a 0.9% improvement in gross margin to 33.4%. Operating margins similarly improved from 7.4% to 8.6%. Turning to Brexit, Wilding notes that most the carpet sold in the UK is imported from Belgium and the Netherlands and a weaker pound has made this imported rival product more expensive giving it an opportunity to grow its 15-16% share. With further non economic drivers to come from consolidation of the logistics functions - £40m is spent annually on vans – this supports Whitman Howard’s upgraded forecasts to a beefy looking 121p this year, 139 next. The shares look set to forge higher on such non economic drivers and could take if Wilding digs out another deal.
Hauler1
10 Aug 2016
Re: WDC... Scrub that - looks like subscription service only
