Something on my mind

Sometimes it's easy to become preoccupied with certain events at a company, and forget about some important details that are currently unresolved.

Readers will know that I'm a great fan of Avesco, and believe the company to be undervalued on any number of measures with or without a payout from Disney.

Recently of course like most shareholders I've been eagerly anticipating the 2012 results (due in a week or two) and any news associated with the Disney case. However, something else is on my mind.

At the June interims, Ian Martin the CEO of the company stood down from the board after ten years. Nothing too surprising there perhaps, but that was 6 months ago and they haven't yet found a replacement unless they are waiting to announce the new incumbent with their final results?

I re-read the interim statement again today where Richard Murray (Chairman) states the following:-

"Ian Martin, the Chief Executive, has decided to step down from the Board and leave the Company to pursue other interests and opportunities. I have known Ian for a long time and since I asked him to come to Avesco ten years ago, we have worked closely together to build Avesco into a truly international business. With that work complete, we both knew the time was right for the Company to make a change. The parting has been amicable. I would like to thank Ian for his real contribution and leadership over the years. I know he wishes everyone at Avesco well and expects the Company to continue to go from strength to strength. The Board has asked me to dedicate more time to the business pending a decision regarding a replacement."

I am now intrigued by this line :- "...pending a decision regarding a replacement". Lots of different interpretations in those few words methinks.

I recently held shares in a company called Zetar which I have mentioned on this blog. It was recently subject to a takeover. Not long before the takeover approach Zetar announced this unexpected bit of news:-

"Our Chairman, David Williams, has announced his intention to step down from the Board at the forthcoming AGM. David played a pivotal role in the flotation of Zetar as an AIM listed company and has helped it to grow from a single GBP50m confectionery company to a confectionery and snack group with sales last year of GBP128m. The Board and, in particular, the Executives who have worked with him from Zetar's inception, would like to express their gratitude for all his guidance, support and the intuition he has demonstrated over these seven years and wish him every success for the future."

Umm........

I'm probably putting 2 and 2 together here to make 5, but make no mistake Avesco is cheap and is currently priced at less than twice this year's expected EBITDA. It's also worth remembering that Taya Communications are a 29.9% controlling shareholder and may eventually want to cash in their chips, so to speak, by selling the company on at some stage, although I have no insight into their long term intentions. Avesco attribute little intangible value to their company even though they have numerous prestigious clients. The current market cap. is little above the tangible value of their assets. As I said, cheap on any number of measures.

Clearly, the Disney case will need resolving one way or another, given the size of the possible payout, but once that's out the way....?

Anyway, just my idle thoughts which could be considerably wide of the mark.

As ever no advice is given or intended.

Good luck with your investing and if you need any good books to help, the link below takes you to my recommended reads:-

http://astore.amazon.co.uk/httpmichae1mb-21