WD in yorkshire
27 Jul 2016
GDP prelim estimate: Apr to June 2016 +ve "manufacturing increasing by 1.8% in Quarter 2 2016 following a decrease of 0.2% in Quarter 1 2016"[link]
WDC1109
27 Jul 2016
Re: Outlook bright to building on a stro... It seems that "numberbit(t)er" has been caught too short
numberbiter
27 Jul 2016
Re: Outlook bright to building on a strong F... When assessing shares, it pays to look at the facts, rather than blindly follow broker recommendations. A few weeks ago the company stated: "Recent acquisitions fully integrated and associated operational synergies have resulted in improved gross margin which we anticipate will continue in 2017. Furthermore, due to continued focus on improved cash generation there will be a material reduction in group net debt."The actual results suggest that the above statements were a little optimistic. 2016. 2015. 2014Revenue (£'m). 255. 127. 75Gross margin (%). 33.3. 32.5. 32.7Distribution and Admin (%). 26.4. 25.3. 28.9Operating profit (%). 6.9. 7.2. 3.8EPS (pence). 22.4. (30.5). 24.3Net debt per share (pence). 349.9. 298.0. 20.9Inventory days. 126. 174. 153Debtor days. 61. 87. 68If you look at the above figures it can be seen (comparing 2016 with 2015 when revenue doubled) that although gross margin went up slightly, so did cost by a greater percentage so the operating profit came down. In 2015 exceptional items resulted in a loss, but comparing 2016 with 2014, EPS actually fell, but net debt per share increased from 21p to 350p.Obviously there were no synergy benefits at the operating profit level, but the company has managed to reduce inventory days by a fair few days and the company got their debtors back under control. So, what this means it that while better asset management generated cash, higher working capital requirements (to service the expanded business) expended even more cash, so net debt actually went up.Now while asset management is a good thing (getting working capital under control) you can only do it once. In addition, when you increase profits by acquisition you grow to a new level, but again that is it. This is not the same as growing through an expanding market or increasing market share.With the housing market in a state of chaos through Brexit there is no evidence that the overall market for carpets will increase, nor is there any evidence that the combined company can take market share from other competitors. So it is difficult to see where further growth may come from or how net debt can be significantly reduced. Taking everything into account, I expect a downside from the current price (I expect the price to fall below 1,000p) rather than an upside. I cannot see how brokers can regard the 2016 result as brilliant, when apart from asset management little was achieved. A key question that will be answered when the 2017 result comes out is whether or not Victoria has paid too much for the acquisitions. Evidence to date suggests it has which is why at the end of the day the share price will likely fall from the current price of 1,218p
WDC1109
27 Jul 2016
Outlook bright to building on a strong FY16 Cantor Fitzgerald have stated that “following these better than expected results, which fundamentally endorse the success of the company’s strategy, we are upgrading our FY17 pre-tax profit forecasts by 8% to £27.0m”.They have reiterated their Buy recommendation and their TP of 1750p.
Bovem99
26 Jul 2016
Re: Cantor's bullish...Victoria (BUY) - Final results beat our expectationsVCP LN (1122p, TP 1750p), Market Cap: £202m(Corporate Stock)Our View: Following these better than expected results, which fundamentally endorse the success of the company’s strategy, we are upgrading our FY17 pre-tax profit forecasts by 8% to £27.0m. Looking ahead, the company should benefit from better buying terms from suppliers and cost savings in logistics, which is a particular focus of management in FY17. It will also seek earnings enhancing acquisitions as over the last three years. It has made an encouraging start to the current year, including in the most recent weeks subsequent to the ‘Brexit’ vote. The stock has declined by 30% since its high in April and, in our view, is significantly oversold on the basis of these results and future prospects. It is now valued at just 9.9x our revised FY17 earnings forecasts. We reiterate our BUY recommendation and our TP of 1750p.· Final results were better than expected – Pre-tax profits in the year to end of March more than doubled to £18.2m vs. CFE Research £16.8m, 8% above our forecast, with diluted earnings increasing by 56% to 81.8p on sales of £255m. UK operating profits increased to £18.2m (CFE Research: £16.3m) from £9.2m on sales more than doubling to £197m helped by underlying gross margins +227bps and cost synergies. In Australia, operating profits also came in well above expectations, £5.0m vs. CFE Research £4.5m despite a 10% decline in A$ helped by strong organic growth of 15.3%. Encouragingly, the FY16 acquisitions, Quest and Interfloor were reported to have contributed PBT of £2.0m and £6.0m respectively. Exceptionals and non-underlying charges, which totalled £4.4m, mainly consisted of the amortization of intangibles and acquisition and disposal related costs. Net debt (excluding finance leases) was £60m, in line with our expectations and is forecast to decline to £40m by March 2017, which equates to only c.1x EBITDA. The company has encouragingly seen a strong start to FY17.· Forecasts upgraded – Following these results, we are upgrading our FY17 pre-tax profit forecasts to £27.0m from £25.0m taking EPS up by 7% to 113.3p from 105.5p. We are also making similar upward revisions to our subsequent year forecasts.· Prospects remain bright – The company, in our view, is capable of growing earnings per share by between 15% and 20% pa over the next three years. It will continue to seek earnings enhancing acquisitions. In addition, it should start to benefit from synergies with particular focus on reorganizing logistics within the group. The objective is to improve EBITDA margins from 12% to 14% and use scale to increase sales not only to the dominant independent sector but also to the multiples and the trade.· Stock looks significantly undervalued – The stock has declined by 30% from its April highs and is back to the same levels of a year ago even though there has been a number of upgrades in the last year, including a 10% upgrade to earnings following the April end of year trading update. It continues to be undervalued both relative to peers, in our view, and on the basis of our earnings growth forecasts of 15% to 20% pa, at 9.9x our revised FY17 earnings forecasts.
CASTLEFORD TIGER
26 Jul 2016
I love this...... Both markets in which Victoria trades - the UK and Australia - continue to perform well and the Group has enjoyed a strong start to the current financial year. UKThe ludicrous over-reaction to the outcome of the EU referendum complete with hyper-ventilating commentators and hysterical luvvie wittering has become more balanced recently. Although there will inevitably be further ups and downs over the months ahead, I expect the UK's decision to leave the EU to be positive for the Group's competitiveness in the foreseeable future.Where have all those BEARS GONE??
WDC1109
26 Jul 2016
"Victoria Plc* Got It Covered", says analyst at Whitman Howard WHITMAN HOWARD RECOMMENDATION:Rating: BUYPrice Target: 1884pUpside/Downside: 70.1%Share Price: 1108pMarket Cap: £201m"Today’s final results reveal a company meeting or exceeding all of its KPIs. This is a significant achievement given the pace of acquisition-led growth and is a testament to the strength- in-depth of the management team. Victoria has commenced an important year for its development in good shape, particularly from a balance sheet perspective. We share the company’s view that the Referendum result poses few problems. Having lost ground since the vote, the share price should now regain its momentum.• Results for the year to 2nd April 2016 emerged ahead of our forecasts; across the KPIs which Victoria has set itself. The strength of the EBIT margin (up 188bps on 2015) and the improvement in cash conversion were particular highlights.• The second half performance was characterised by margin growth. Victoria’s focus on cost efficiencies from acquisition integration resulted in a near 300bps reduction in the H2 OpEx/revenue ratio; from 26.7% in H1 to 23.7% in H2. Given maintained H2 gross margins (33.4%), these efficiencies propelled the H2 EBIT margin by 334bps to 10.0% against 6.0% in H1.• Victoria’s acquisition-led strategy entails a relatively high level of initial financial gearing. However, we have argued that, as acquisitions are integrated, cash flow will increase via synergies such that debt ratios improve. The full year results highlight this trend. Specifically, net debt to EBITDA stood at less than 1.9x at year end, down from over 2.5x at the interim stage.• There are several indicators within the results which point to scope for upgrades in 2017 and 2018, particularly in relation to returns. However, we prefer to review the detailed presentation which the company will give this morning before committing to specific estimates but the potential is undeniable.• On Referendum impact, Victoria’s statement is positive. Much of its UK competition is imported while it is exclusively focused on UK markets. There is scope to see the initial Brexit impact as a modest positive in this regard.• Even without improvements to current forecasts, the shares offer considerable value in our opinion. Having declined by 19.5% since 23rd June, Victoria now trades on very undemanding, near term ratings. This makes no allowance for the core strengths of its management, strategy and financial position."
Nige the snake
26 Jul 2016
should do 20-25% or close to it this week nm
Nige the snake
26 Jul 2016
Re: Wow! will buy in now
WDC1109
26 Jul 2016
Wow! Wow! Profit way above expectations at £18.2million. Debt way down. Only 1.85x EBITDA.Fantastic cash generation: £17.2 million net free cash flow.EPS 84.39pLooking good for FY17As I say, Wow!
Nige the snake
26 Jul 2016
RNS ,,,WOW..... BUY Victoria PLC('Victoria', the 'Company', or the 'Group')Preliminary Resultsfor the year ended 2 April 2016 Victoria PLC (LSE: VCP) the international designers, manufacturers and distributors of innovative floorcoverings, is pleased to announce its preliminary results for the year ended 2 April 2016. Financial and Operational Highlights Continuing operationsYear ended2 April2016Year ended28 March2015 Growth Revenue£255.2m£127.0m+101%Underlying EBITDA1£32.3m£15.8m+104%Underlying operating profit1£21.9m£9.4m+133%Operating profit£17.7m£2.1m+743%Underlying profit before tax1£18.2m£7.9m+130%Profit before tax£9.3m£(1.6)m+681%Net debt£61.1m£35.7m+71%Net debt / EBITDA1.85x1.79x Earnings / (loss) per share2: - Basic adjusted84.39p52.90p+60%- Basic36.08p(27.37)p+232% · Group revenue grew by 101% (106% in constant currency terms) from £127.0m to £255.2m · UK revenue grew by 115% and Australia by 64.6% (80.4% in constant currency terms) during the year. Group annualised like-for-like revenue growth was circa 3.0% · Successful integration of the acquired businesses in the year - Quest Carpets and Interfloor Group. Both acquisitions have been materially earnings-enhancing · Group operating profit increased more than 8 times from £2.1m to £17.7m. Underlying operating profit (before the deduction of exceptional and non-underlying items) more than doubled from £9.4m to £21.9m · Free cash flow3 from continuing operations before exceptional items of £17.2m (2015: £10.0m) · Group net debt of £61.1m, with adjusted net debt / EBITDA4 having reduced from circa 2.25x at the half-year to 1.85x at the year-end · Disposed of a non-core yarn spinning operation during the first half of the year · Risk to the Group of the UK's exit from the European Union is mitigated by the UK Division not being heavily reliant on imports or exports, and the Australia Division being operationally and commercially independent · Current outlook for both the UK and Australia is positive, with the Group having enjoyed a strong start to the current financial year. 1. Underlying performance is stated before the impact of exceptional items, amortization of acquired intangibles and asset impairment within operating profit. Underlying profit before tax and adjusted EPS are also stated before non-underlying items within finance costs (comprising mark-to-market adjustments, BGF redemption premium charge, release of prepaid finance costs and deferred consideration fair value adjustments within finance costs) 2. Basic and basic adjusted earnings per share calculations set out in Note 4 3. Free cash flow represents cash flow before financing activities and acquisition related items 4. As measured in relation to the Group's bank facility covenants Geoff Wilding, Executive Chairman of Victoria PLC commented: "The year was a very successful one for Victoria. The Board's commitment to creating wealth for shareholders delivered further scale both through the earnings-enhancing acquisitions of Quest and Interfloor, and organic growth by achieving operational efficiencies throughout the Group. "The strong revenue performance achieved in the UK and Australia has continued post-period end. The Group have seen no drop off in demand for their products since the EU referendum in June and Victoria has enjoyed a strong start to the current financial year." For more information contact: Victoria PLCGeoff Wilding, Executive ChairmanMichael Scott, Group Finance Director +44 (0) 15 6274 9300Cantor Fitzgerald EuropeRick Thompson, Phil Davies, Michael Reynolds (Corporate Finance) +44 (0) 20 7894 7000 Whitman Howard (joint broker)Nick Lovering, Ranald McGregor-Smith +44 (0) 20 7659 1234Buchanan CommunicationsCharl
Bovem99
24 Jul 2016
Re: Time to buy in That's the whole point: do some careful research and get ahead of the market. If you only invest on the same information as everyone else, it is a mathematical certainty your portfolio will always underperform the market.
numberbiter
23 Jul 2016
Re: Time to buy in Why not wait for the real numbers; we are only days away?
Hauler1
22 Jul 2016
Re: Time to buy in Bovem Agreed...though in terms of movement I think that what will really move the price is as follows:Good number...over 17 would be fantastic Corresponding company debt position updateRobust early indicator / view concerning trading since the referendum. The last one is what took us down here...that's what kick starts us imho...Hauling at the moment through France...
Bovem99
22 Jul 2016
Time to buy in I've been looking closely at the numbers.VCP confirmed in March its pre-tax earnings were significantly ahead of market expectations, which were £15.3 m at the time. Analysts then upgraded to £16.8m ("significantly" is code for at least 10% in the City). That means VCP earned at least £10.9 m in the second half (because H1 earnings were £5.9m), with the big jump due to the acquisitions of Quest and Interfloor. VCP earnings are not seasonal so a simple doubling of the H2 earnings is a conservative estimate of FY17 earnings. So if VCP announces on Tuesday underlying earnings of £16.8m or more, it is 'confirmation' of the FY17 analysts' consensus forecasts of 109.1p EPS. That means at the current share price VCP is trading on a PE of just 10x! All investors need is reassurance from Tuesday's results announcement and the price will leap up. +20-30% is not impossible (that would still have the shares on a PE of only 12-13x)I think this makes a convincing case for buying now.
