Some positive recent press and research over last few days. VCP tipped (again) by Midas on Mail on Sunday yesterday and also in today's Growth Company Investor. Article in Small Company Sharewatch today is also positive about the two latest acquisitions and future prospects and endorses Berenberg's £9.50 price target.
The Board of Victoria PLC (the "Company") (LSE: VCP) the international designers, manufacturers and distributors of innovative floorcoverings, notes the press speculation surrounding the potential sale process of Keraben Grupo, S.A., a European ceramic tile manufacturing business, being undertaken by the current owners (the "Potential Acquisition").
The Board has previously stated that it is part of its growth strategy to make highly selective acquisitions and therefore it is frequently in discussions with a number of parties. The Board can confirm that it is evaluating a number of opportunities including this one.
In the event that the Potential Acquisition were to proceed it would be classified as a Substantial Transaction for the purposes of the AIM Rules for Companies. However, there is no guarantee that it will proceed.
A further announcement will be made in due course as appropriate.
Well todays news, has certainly pushed VCP and broke through to a new all time high.
I am always nervous when price of shares march ahead without any apparent reason , as I always think they also could tumble, twice as fast, so now this acquisition has been announced, looks like the market likes it.
Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, is pleased to announce it has agreed to acquire Italian ceramic flooring manufacturer, Ceramiche Serra S.p.A. ("Serra") (the "Acquisition"), for cash consideration of up to 56.5 million (£50.4 million) (the "Total Consideration"), net of cash acquired as part of the Acquisition, to be funded from the Company's cash reserves and existing debt facilities.
36.5 million (£32.6 million) of the Total Consideration is to be paid on completion, with the balance of 20.0 million (£17.8 million) (the "Contingent Consideration") to be paid over the next four years, subject to the business meeting annual targets in earnings before interest, tax, depreciation and amortisation ("EBITDA").
The Acquisition will be immediately and significantly earnings accretive on completion.
"Positive note in latest Growth Company Investor where they reiterate their buy recommendation. Article reads:
"Carpets and floor coverings specialist Victoria delivered
an excellent set of results for the year to March. Revenue
growth of 25 per cent was outstripped by earnings per share
growth of an impressive 50 per cent. The shares have been
a terrific recommendation and, having spoken to
management, were convinced theres plenty more to go for.
An important influence on last years results was the 1.2
percentage point gain in EBITDA margin, which rose to 13.8
per cent. Management has a 16 per cent target, and its
reasonable to expect them to hit this on a three-year view.
Each 1 per cent gain in margin is worth 12.5 per cent to the
So theres still good organic growth to come. But the major
part of the story remains the strategy of using the prodigious
cash flow generated by carpet manufacturing and
distribution to make acquisitions. Chairman Geoff Wilding
points out that the European flooring market is five times the
size of the UKs, with literally dozens of family-owned
companies. He has compiled a shortlist of targets and is
engaged in active discussions, so we should expect further
accretive acquisitions before much longer.
Theres scope to acquire £30 million of EBITDA by gearing
up to the companys self-imposed debt ceiling. The shares
are on a p/e of around 20 times this year, falling to 18 times
in March 2019. However, its reasonable to expect Victoria
to outperform brokers margin assumptions and its almost
certain that it will make more than one earnings-enhancing
acquisition in this time frame."
Fiddler, I suspect you are right that more acquisitions are brewing. They've made no secret of their plans. However, given they have said they are intending to grow in Europe, I don't expect anything imminently as all Europe is on holiday in August!!!
Well I've got to say, I was wrong!
I didn't see them surging ahead that quickly, but I'm not conplaining.
These are well past the broker forecasts but we need fresh forecasts since the results coming out. Maybe they won't forecast if they think they are currrently overvalued a little.
I can only assume that something big is brewing, either some more acquisitions or even someone making a bid to buy the group!
Personally I'm hoping for more acquisitions, taking it to £7.50-£8, then a buyout at £9-£10.
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