Volvere cautious after slowdown

13/05/2010 Robert Tyerman

Turnaround investment specialist Volvere is not about to ‘pile into deals’ after turning £178,000 annual losses into £525,000 pre-tax profits.

That is the message from a cautious Jonathan Lander, chief executive officer of the AIM–quoted company, which more than trebled turnover to £10.9 million overall last year but had a poor second half. He remains wary about ‘leaping into deals’ until the financial outlook becomes clearer.

Lander points out ‘we were not prepared to pay what Jon Moulton did for Reader’s Digest’, referring to the £13 million rescue of the ailing publishing group by private equity luminary Moulton’s Better Capital. The company has instead been putting money into banks’ preference shares and various debt instruments ‘yielding between 9 and 12 per cent’.

In 2009, Volvere, chaired by former retail tycoon and ex-Tory party treasurer Lord Kalms, increased profits, including those from discontinued operations, from £509,000 to £7.2 million, while net assets rose 57 per cent to £18.2 million. However, the full-year figures show a deterioration, partly caused by accounting conventions, from those achieved in the first half, when Volvere made £587,000 pre-tax or £7.8 million including discontinued operations on £5.4 million turnover and achieved net assets of £19.4 million.

The company has recouped its original £1.3 million investment in its key holding, marketing and data services concern Interactive Prospect Targeting (IPT), whose profits quadrupled to £1.7 million last year. Volvere sold its Sira certification business for a minimum £8.1 million, while Sira Defence & Security made progress, supplying monitoring software to government, police and the military.

Volvere’s tightly held and volatile shares, which have traded between 340p and 144.5p over the past year, now stand at 275p, down 27.5p. That values the company at £14.5 million.