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Share price 193p – 197p (market cap £36m after share buy-back)
Net current asset value: £32.7m – £34.5m Cash £32m
As we’ve seen in the last two Newsletters Avingtrans has an interesting collection of businesses left over after selling its Aerospace division for £52m of cash (more than its current market capitalisation).
But these low-profit businesses will only become high-profit businesses if the management team are very good. So today I’ll concentrate on evaluating the key people.
The second part of the Newsletter examines the important questions for net current asset value investors of operational stability and financial risk.
Nigel Wray is a constant presence
Going way back to 2000, a household goods and textiles company called Frank Usher shod itself of its operating business and property, and changed its name to Avingtrans. It stood there on the stock market, a cash shell with £4m and a MCap of about £5m.
A “shell specialist” Nigel Wray held 12% directly and a further 6% through Singer & Friedlander merchant bank (an organisation he controlled).
Because Nigel Wray is still the largest shareholder (14.98%), though not a director, I thought it would be useful to write a short profile.
Born in 1948, after Bristol University, Wray joined Singer and Friedlander. Twenty years later he led the investment bank in its stock market launch.
Not content with that, in his twenties, he formed a property company partnership focused on house renovation employing a 100-strong workforce.
He later acquired the Fleet Street Investment Newsletter and proceeded to research and write all of it.
Now 350th on the Sunday Times Rich List and holding numerous directorships, he has a reputation for investing in businesses and helping them to grow over the long term – he has certainly proved loyal to Avingtrans for over 16 years.
I’m told his personal reputation is high; the following points have been noted: compassionate philanthropist, old-fashioned English values, good manners, modesty, belief in fair play, ordinary family man, traditional ethical principles, vision, natural leadership, excellent judgement especially regarding people, never been one for anything flashy.
In line with this month’s buy-back offer to all shareholders Wray halved his shareholding in from 5,486,408 shares to 2,743,703 shares (14.98% of the total now outstanding of 18,317,888 shares). Note, however, that the average shareholder only offered 35% of their holdings, so Wray has turned into cash a greater proportion than most.
Roger McDowell, Chairman
Roger McDowell was an experience businessman when he bought shares in Avingtrans in January 2008 (10.3% of the company). After university he had worked his way up Oliver Ashworth Ltd, a pipeline manufacturing, products and supplies company, to be MD.
Sales grew from £1m to over £100m and he led a full listing on the London Stock Exchange. This business was sold to a French company in 1998 for £36m.
Since then, he has a dozen or more non-executive appointments in private and quoted companies, predominantly in the engineering sector.
It was only a few days after acquiring shares in Avingtrans that he was invited to join the Board as a non-executive director. In short order the former……..To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
