My favourite investment VLE (60%+ of portfolio) has just released their final results showing good progress in trading and profitability at their solitary holding Shire and an indication of the value being outed most likely through a share tender offer as that is what they have chosen to do in the past, though taking it private is not out of the question.
https://www.investegate.co.uk/announcement/rns/volvere--vle/final-results-to-31-december-2023-/8212955Key passages:
“Group revenue from continuing operations (all of which related to Shire Foods) was £42.95 million (2022: £38.03 million) and the profit before tax from continuing operations was £3.64 million (2022: £2.33 million). Overall profit after tax for the year was £2.73 million (2022: loss £0.06 million).
Group total net assets were £37.51 million (2022: £35.75 million), with net assets per share* increasing to £14.83 (2022: £13.90). Of this, cash and available for sale investments were £23.74 million (2022: £20.79 million).”
“In our interim results I said that shareholder returns remained at the forefront of the Board's strategy. I want to reassure shareholders that this remains the case, not least in view of the Company's share price which, we believe, does not fully recognise the Group's underlying assets. We are reviewing the best way to resolve this and are considering a number of options, which will be notified to shareholders when appropriate. In the short term, the Group will continue to buy in its own shares whenever possible in order to narrow the Group's share price to NAV per share.”
The share price has bounced back from recent feb/mar lows by 40% to around the declared NAV so its interesting that they say the SP is undervalued and I take that as a recognition that the Shire investment isn’t marked to market but just included at the acquisition book value. Recognising the likely sale value of Shire would bump the NAV up to £20+ per share and so would expect a tender offer to be nearer to that figure so even at the current share price there is a case for buying for a speculative short term of maybe 20%.
One of the good things about tender offers is you avoid the wide spread between the buy and sell offer price and there’s no dealing costs. I’ve sold my entire holding of VLE in the past when a share tender offer has been made and then rebuilt my stake as the share price drifted back down post tender.