Menzies(john) Share Discussion Threads

[buffettjnr] 11/5/2016 09:59

AGM coming up 20 May...probably a non-event...or...

[1gw] 18/4/2016 16:19

BNY Mellon disclosing >5% as of 14th March, correcting a previous notification that doesn't appear to have been published.

[1gw] 18/4/2016 13:39

Intriguing. You think the activists would want to install their own CFO for a split? Is that gut feel or has PB put something on record which would make it difficult for her to stay?

I thought a bigger job just based on market caps. Mnzs c. £300m vs Spt c. £500m. Spt has much lower revenues though and I don't know about the complexities of the moving parts from a CFO perspective.

[buffettjnr] 18/4/2016 13:28

It's not a bigger job. She knows she won't be around 2 minutes when the activists take over.

[1gw] 18/4/2016 13:19

Not sure - I would have thought the prospect of overseeing a demerger or IPO would be quite attractive to a CFO. So if she thought the activists would get their way in the near-term, she might want to see through the split. But it could be that the working environment has become difficult due to pro-split and anti-split camps inside the company. Or it could be a protest against something that contributed to the CEO leaving. Or it could just be that she is ambitious and saw a chance to move to a bigger job.

[buffettjnr] 18/4/2016 12:01

Even Paula Bell sees the writing on the wall...activists have won this one. I'm buying more...

[buffettjnr] 08/4/2016 10:59

Please do...but just a few...at GBP8 you might be kicking yourself.

[1gw] 08/4/2016 10:22

Nice to see it back above £5 again. Do I need to sell a few more to keep the rally going?

[1gw] 05/4/2016 13:27

Can't find the annual report yet, but news on shareholdings all the same.

Good to see Kabouter still acquiring given their supposed support for Lakestreet's split idea.

[buffettjnr] 04/4/2016 16:25

I'm not aware of an analyst presentation.

[1gw] 04/4/2016 14:21

Annual Report due tomorrow. Might be something of interest, if only the latest shareholdings position.

There's still no webcast of the full-year results on the site (although the presentation slides are there). Did they not have an analyst presentation in the end?

[buffettjnr] 02/4/2016 19:20

Alaska Air Nearing Deal to Acquire Virgin America...good news for MNZS peutetre

[1gw] 30/3/2016 09:47

...seems still to be working.

[1gw] 18/3/2016 16:31

I wouldn't complain if it did...

[buffettjnr] 18/3/2016 15:15

Excellent. I hope it works as well as the last time you sold some :-)

[1gw] 18/3/2016 14:40

I've taken a few more off the table at 4.67, locking in some profit from purchases earlier this year.

[buffettjnr] 11/3/2016 17:12

What is more interesting is who the seller is...as they will be regretting their decision...

[1gw] 11/3/2016 16:35

That's a lot of volume gone through today. TR-1 to come?

[1gw] 08/3/2016 18:22

Spin-offs

And on that theme, I listened to David Kostin, the Chief US equity strategist for Goldman Sachs, speaking on CNBC earlier today. He was pushing the idea that there has been a trend recently of companies creating greater returns for their shareholders by spinning off subsidiaries. He thought this trend would continue and said that the chances were good of a dramatic increase in return to shareholders (in terms of an excess return in the spinco vs the parent) if the company being spun off had the following characteristics:
1. A lower p/e multiple than the parent;
2. A lower expected return than the parent (in respect of earnings growth);
3. Operates in a different industry from the parent.

It seems to me a spin off by John Menzies of the distribution business (i.e. retaining the aviation business) would fit these criteria, but the (perhaps) more obvious spin-off of the aviation business would not. I suppose practically for the John Menzies shareholders it doesn't really matter which business is spun off and which is retained so long as they get the chance to participate in both, but thought that it was an interesting perspective, and one I hope Lakestreet will not be shy of bringing to the board's attention.

I see in the write-up of the CNBC segment, GS appear to advocate going long the spinco and short the parent, so something to watch for if we do get there.

[1gw] 08/3/2016 12:04

On the unlocking value piece, interesting to compare the TU statement with the results statement:

13th January:
"The Board of John Menzies plc will continue to review its strategic and organisational options to enhance shareholder value"

8th March:
"The Board is confident that we have strategies available to us in both of our operating divisions capable of delivering growth. We continue to evaluate the optimum structure for the Group to potentially further enhance shareholder value."

It may be over-interpreting, but I could read the 8th March statement as saying that they've essentially finished the review of strategic options and are happy with what's in place. So what remains from the 13th Jan statement is the "organisational options to enhance shareholder value", and here they are now focused on "optimum structure for the Group".

From the "activist" standpoint I could be optimistic and think that they are now actively considering a split/demerger given that they think both divisions have growth strategies available to them. The reference to "further enhance shareholder value" in the context of "structure for the Group" to me suggests they are looking at more than just whether they have 2 divisions reporting to a single CEO, or two divisions each reporting directly to the board.

[buffettjnr] 08/3/2016 11:04

I like your summary 1gw. I was encouraged to see that management commentary continues to suggest a strategic move to unlock value. And the dividend is welcome. I don't like the continuing reliance on 2H earnings, as it entices management to bring forward future earnings to match numbers.

[1gw] 08/3/2016 10:50

Very muted reaction to the results - with little price movement and not much volume so far.

The results strike me as mildly encouraging. The main positives for me are:
o Distribution returns to (underlying) profit growth (£25.1m 2015 vs £24.0m 2014).
o Aviation back to more than 50% of underlying op profit in 2H (£13.7m vs £12.9m for Distribution) and not far off 50% for the year (£23.1m vs £25.1m)
o Dividend growth resumed (albeit from lower base). 16.8p for the year not bad for a growth business!
o Signs that things are set up fairly well going forward. Network rationalisation in distribution completed. Problems at Gatwick now resolved. Curiously circumspect statement on the potential for growth from both divisions, but better than nothing "The Board is confident that we have strategies available to us in both of our operating divisions capable of delivering growth." Rather suggests the Board isn't overly confident on strategy implementation...

Can't see any major negatives, although I find the continuing large gap between "basic" and "underlying" earnings unhelpful. Given the average gap in eps between the 2 measures has been nearly 20p over the last 7 years, perhaps the board could conclude that some of the costs should be transferred into the "underlying" category.

[buffettjnr] 07/3/2016 11:03

I think we need to differentiate between "lazy" institutional investors and "activist" institutional investors. In my experience, the U.K. has many who fall into the former category. Menzies shareholder base is now very activist-heavy. Which can only be good news for us.

[grahamite2] 07/3/2016 10:46

Many thanks, Buffettjnr. Personal experience makes me very wary of companies without significant institutional involvement - the directors can run them as personal fiefdoms.

However, I took the Schroder sale into account in my 28-31% figure, so I don't think there's any call for panic. Will see what tomorrow brings.