AIM Prospector morning thoughts (VLE, GVC, SPRP)

22nd Sep '14 by AIM Prospector

3 comments 12452 reads

Good morning,

Three AIM company announcements caught my eye this morning: Volvere (LON:VLE), Sprue Aegis (LON:SPRP) and GVC Holdings (LON:GVC). So, a quick mention of all three.

Volvere (LON:VLE)

Interim results here:
http://www.investegate.co.uk/volvere-plc--vle-/rns...

The company is a "growth and turnaround investment company". Assessing the progress in this sort of business can be very tough, as values are so subjective and profits/losses are very lumpy as sales are made etc.

Anyhow Volvere has announced a drop in net assets per share from £4.00 at the end of 2013 to £3.93 at the end of June. However, this figure is ahead of the £3.46 reported at this stage last year.

The share price has meandered somewhat in the last five years, between 230p and 330p so many shareholders will not have done that well on a capital basis. There is no dividend either.

However, the management are highly rated here and I would be happy to research further.

GVC Holdings (LON:GVC)

This is a gambling firm that took on some of the old Sportingbet assets when the other part of the business was taken over by William Hill. Some of the operations are in unregulated markets. Investors tend not to like this, as the risk of being closed down is always there.

As a result, GVC Holdings (LON:GVC) has typically traded on a low P/E. The company has a policy of paying out most of earnings in dividend so there is a huge yield there.

Interims:
http://www.investegate.co.uk/gvc-holdings-plc--gvc...

It is a very positive statement this morning, citing a great World Cup and progress in Latin America.

Some highlights:

Dividend
• Quarterly dividend of 12.5 €cents (2013: 10.5 €cents)
• Additional special dividend of 2.5 €cents (2013: nil)
• Total quarterly dividend is 15 €cents, up 43% on same quarter last year (2013: 10.5 €cents)
• Cumulative dividends payable in calendar year 2014, 55 €cents. Total up 96% over prior year (2013: 28 €cents)
Financial highlights
• Wagers up 38% to €694 million (H1-2013: €502 million)
• Sports margin 9.9% (H1-2013: 10.3%)
• Net Gaming Revenue ("NGR")…

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JMLDutch

22nd Sep '14

Re: SPRP,

The market seems happy with the results, but I am not totally confident.

The market expects full year 16.8p EPS, however, H1 only was 6.2 EPS. Is 10.6 EPS possible in H2? This is a 71% increase from H1 to H2.

H1 2014 EPS was up 33.6% compared to H1 2013. It seems to me, a 71% increase in EPS in half a year is gonna be hard to achieve. Thoughts?

AIM Prospector

Hi JMLDutch,

First I would say that management have said they will hit market expectations so their reputations are on the line. Remember also that as of today, we are nearly three months into the second half so they will have almost three quarters of the full year pretty-much accounted for.

I think that the bigger clue is in the 14th July trading statement:
http://www.investegate.co.uk/sprue-aegis-plc--sprp...

Despite the impact of the declining value of the Euro, with the launch later this year of a new trade range of products combined with a record order book for H2 2014, which includes a significant increase in business in France, the Board remains optimistic of delivering results for the year ending 31 December 2014 in line with market expectations.

The France sales are being driven by new home safety legislation.

UK fire safety firm Sprue Aegis set to cash in on French alarm law

http://www.express.co.uk/finance/city/457658/UK-fi...

Chairman and chief executive Graham Whitworth said the French law was a big opportunity for the company, which recently posted record annual sales of £48.3million – up 30 per cent.

Hope that helps,

David O'Hara
Editor, AIM Prospector

23rd Sep '14

Thanks for your reply, very helpful.

AIM Prospector morning thoughts (VLE, GVC, SPRP)

Volvere (LON:VLE)

GVC Holdings (LON:GVC)

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