Volvere is buyer of undervalued or distressed businesses that it believes it can grow and turnaround. It can also buy undervalued or distressed businesses and companies that are complementary to existing businesses.
In 2017 it had 3 businesses;
Impetus an automotive consulting business
Sira a security software business
Shire a food manufacturing business.
In 2018 Impetus was sold and the group share of that sale was £26.1m
Last week Sira was sold and the company will receive circa £2.5m after costs and above my NTA valuation. (NTA valuation is based on reviewing the 2017 accounts at Companies House and the 2018 Volvere report saying the company made nil profit)
So Volvere is currently an owner of a food manufacturing business that it is investing in (£1.5m capex in 2018). That is running above breakeven but is making only around £500,000 per annum. Higher profits have been made in the past but there are currently many margin pressures in the business and an ongoing growth in costs. Particularly with regard to labour which relates back to the capex spend.
Following the sale of Sira Volvere will have a NTAV of circa £43m. Against a market cap of £36m. So there is only a 19% margin of safety.
Volvere is cash rich, though it does not pay a dividend and essentially controlled by Jonathan and Nicholas Lander (CEO and FD). Surplus cash is intended to acquire opportunities or to buy back shares should they become undervalued.
Shire is proving a difficult business to turnaround and improve, but the Landers have proved themselves adapt at doing turnarounds and taking a long term view, Sira was bought in 2006.
Whilst the share price has reacted to the Sira announcement there is little to suggest there will be another catalyst shortly. As said above I have small position and will be looking to add on future weakness, which I expect as the company moves on and the news flow stops for months. I would be a buyer at under £11 or on clear positive news on Shire or another acquisition. I would review this on poor results from Shire, changes in management, or an acquisition that seemed to me to be overly priced.