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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 well as the Metalcraft businesses with their growing range (see previous Newsletter), Avingtrans (LSE:AVG) has two other strategic business units, Crown International and the Composites business, either of which could be separated from the holding company and be sold off, for the right price.
Crown International
Crown was bought by Avingtrans in 2003 for £1.56m. Based at Portishead near Bristol, it is both profitable and expanding. It has recently relocated to a new 18,000 sq foot facility “to provide additional capacity for increasing orders”. So many new contracts were picked up in 2015 from UK motorways and rail networks that they had to move.
Crown manufactures metalwork for the side of roads and railways, including:
•Poles and cabinets for cameras and other road safety installations. It has already placed 6000 across the world, so they make the claim that they are “the world leader for the design and manufacture of poles and cabinets for the road traffic safety market”.
•All those LED signs above the motorway telling you “50” or “60” need some sort of supporting metalwork. Some of these structures are supplied by Crown, e.g. its VCM pole can be swung out above the traffic or to the roadside and then lowered.
•CCTV poles in both a fixed and hinged (tilt over) configuration, and a range of standard heights.
•Big metal cabinets for the side of the road or railway. They might contain telecoms or electrical equipment, for example.
•Level Crossing Enforcement Smart Poles. Crown installed 54 as part of Network Rail’s £130m National Level Crossing Safety Improvement Programme. Digital safety-camera equipment is mounted on the poles to dissuade lights-jumping. Network Rail is now looking to extend the project over the next three years.
•Masts on which to mount infrared equipment to support lane monitoring cameras. I didn’t realise there was so much to mast design: “Our PTZ mast has several unique features designed to provide greater reliability of operation than traditional equipment. The integrated cable-management system means cables remain in place when the platform is lowered or raised for maintenance, eliminating the need to disconnect wires or power supplies. It also features a fully-integrated winch and braking system, meaning it can genuinely be maintained by a single maintenance worker, thereby reducing operating costs.”
Losses into profits
We do not have much information on the profitability of Crown, but I did glean from the annual reports that in 2012 and 2013 this division lost money. But then………..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
