The following is an equity research on Victoria PLC, below is a brief summary of the findings, click the link below to read the full report.
Share price: 1,403 Market cap (£m): 255.
P/E: 57 Revenue’s 2016 (projected): 253
Equity (£m): 53 Net debt (£m): 81
Target price: £10-£15/share between now and 30th July and a share price of £6.50/share by year-end.
Summary of findings
A. Victoria PLC share price did a 10 bagger in two years or saw its market value increase by 17 times from £15m to £255m.
B. At the same time, its sales is forecast (includes 2016’s sales) to jump by 255% in the last years. However, there are no consistent earnings.
C. Shareholders may have received £3/share in special dividend back in 2014, but Mr Wilding took a reward of over 7m shares (equivalent to £100m in value).
D. The only financial item that has increase more than its share price is the net debt position which jumped from £7m since the arrival of Mr Wilding to £81m today (latest interim results).
E. There is a lack of financial transparency in some acquisitions. For example, Globesign Limited saw strange after-tax profits fluctuation from £10m in 2014 to £2m in 2015.
F. The best acquisition it made is Abingdon Flooring Limited because it has a strong prudent business with strong incentives to reward the company (if targets meet expectation).
G. The purchase of Interfloor Group of £65m is (in our opinion) the worst acquisition because operating cash flow minus “interest paid” average £1.5m per year while it took on net debt of £50m.
H. Despite, these businesses related acquisitions there are no strategy to create synergy between subsidiaries.
I. Ignoring the Quest acquisition, all the rest will increase Victoria PLC’s shareholders’ fund by £6.2m that cost the company £104m. This is because Interfloor’s equity is a negative £19m.
J. Goodwill and intangible assets account for 70% or more of the company’s non-current assets.
https://www.scribd.com/doc/306182106/Victoria-PLC-...
