Mallett Share Discussion Threads

[baner] 24/2/2014 18:36

Gary1966

you are so right - what the heck have they been doing during these six months.......? given the dismal return on capital within Mallett it is only if they announce a significant distribution of capital that the share price should react positively. if on the other hand they announce that they will spend the money on investments in their unprofitable business - the shares would rather come down further as there may have been some expectations in the market.....!

[gary1966] 24/2/2014 18:26

You would have thought that after 6 months they would know how much of the cash they could return to shareholders. Oh well gives us something else to look forward to. Good to have it confirmed though that completion has taken place.

Interesting to see what the market makes of it tomorrow.

[the oak tree] 24/2/2014 18:05

RNS
Mallett PLC

Sale of Clapham property

Mallett PLC ("Mallett" or the "Company") is pleased to announce, further to its announcement on 23rd August 2013, that it has completed the sale of the freehold property at 49 Clapham High Street, London to Bencameron Limited for £2,650,000 in cash.

The Board is considering the uses for the cash received including a return of cash to shareholders after taking account of the cash requirements of the Company. A further announcement will be made on this shortly.

[pj 1] 24/2/2014 17:53

£2.6m cash in the Bank then now....:-)

[baner] 24/2/2014 11:24

HP correct and weinstock have a long history with Mallett - and it is not obvious their interest is primarily to make a profit on the shares............it looks more like a "social investment". sad for all other investors in this.

[hugepants] 24/2/2014 10:45

baner Yes I didn't realise Weinstock held 30% with Gyllenahmmar having 26%.

[baner] 23/2/2014 21:46

Huge Pants

you are spot on - this is precisely the way to evaluate a distribution in this case - as the shares trade at a significant discount - better shareholders manage the funds themselves.

however, and sadly, i do not think the swede pull any strings here at all - it is more likely the weinstock camp together with the terrible NEDs Lord D and mr Heanage.

[hugepants] 23/2/2014 20:56

callumross 15 Feb'14 - 15:20 - 524 of 533 0 0

Rainmaker - pretty sure that there will be an announcement on the 21st but unlike you I don't think it will make much difference to the price as this news is already discounted by the market. Also, for the reasons I have stated previously, I don't think a special dividend will make any real difference except to give shareholders an income but an equivalent loss in capital.

What I think tends to happen is the discount to NAV is maintained after the return of cash. As an extreme example consider a cash shell with a share price of 10p and net cash of 14p. The company then returns 10p of cash. What happens to the share price? It will probably drop to about 3p but definetly not to zero!

Given Gyllenahmmar owns 30% surely he is pulling the string here. Id be surprised if he doesnt demand at least 15p per share returned. That still leaves £0.5M from the property sale to go into the business.

[rainmaker] 21/2/2014 17:20

Well spotted, PJ1-26/28 Sydney Road, London SW9 0TS so in effect, it's a done deal and has gone through so assuming no real change in debt, Mallett now have £2mln in net cash v market cap of £10mln



regards

[rainmaker] 21/2/2014 17:12

Likewise Gary but maybe they assumed that as it is a relatively easy job to find a new workshop for Hatfields they didn't need to update the market..................or maybe we're giving them too much credit.

regards

[pj 1] 21/2/2014 13:06

Hatfields have moved, so something around the corner

[gary1966] 21/2/2014 13:03

Sale of property due to complete by today and so disappointed that no RNS yet.

[baner] 19/2/2014 13:50

strange 1

sadly i believe you are closest to the truth! why should they hand out money to the owners - better increase their salaries, pay out bonuses and build up stock - "shareholders - what shareholders"? Daresbury ownes absolutely nada and Heanage sits on shares worth four-ish months of his directorship fee.

[rainmaker] 19/2/2014 12:44

Hahaha......we shall see.Property sale is worth 19p a share and given all the various factors I expect a special dividend of between 8p and 12p a share.


regards

[strange1] 19/2/2014 11:42

There will be no special dividend. You can almost read the announcement now........"given current working capital requirements and quality inventory opportunities the directors do not......"

[rainmaker] 17/2/2014 22:28

Guys, I respect your opinion but I don't agree re the market discounting the special dividend.Don't worry you can be wrong and make money. How many times does happen? :>)

IMHO the market hasn't taken into account the special dividend. Maybe the share price won't move on news of the completion of the propety deal but on news of a special dividend. Anyway we shall see.

best wishes

[baner] 15/2/2014 17:13

callumross

you are spot on!

and again: it seems we all agree where the problem is - an incompetent board and a lazy and overpaid executive team.

[callumross] 15/2/2014 15:20

Rainmaker - pretty sure that there will be an announcement on the 21st but unlike you I don't think it will make much difference to the price as this news is already discounted by the market. Also, for the reasons I have stated previously, I don't think a special dividend will make any real difference except to give shareholders an income but an equivalent loss in capital. If you had a good management you would advise them to keep the 10p special dividend and use their acumen to turn it into 15p. However, we all seem to agree that the management of MAE are not up to much, hence the depressed share price over the years. This is where, as baner says, you need large shareholders to come in and either invigorate or dispose of the board. You would have thought the Swedes would have been just that activist large shareholder but it hasn't turned out to be the case. Also, the 6.5p ePS forecast for this year. Is that all real earnings or does it include the one off property gain? As you can see I am pretty downbeat about MAE but continue to hold in the hope of future events. Hope I am wrong and you are right, however!

[baner] 15/2/2014 14:54

hi Rainmaker - i am also a bit hopeful that the major shareholders are tired with this board and stem the "largesse" as you describe it - in which case i fully underwrite to your optimism - but why on earth do these shareholders allow mr daresbury and mr heanage to stay on without delivering any progress to shareholders - that is a real mystery!

[rainmaker] 15/2/2014 12:58

Hi again Baner,I fully understand the point you're making that, in effect, improvements in the business will be negated by management's largesse.I don't believe that will happen to such an extent that it will stop Mallett being a great investment at the current historically low share price........but we shall see and as always Investors need to do their own research and draw their own conclusions.

AIMHO, DYOR

regards

[rainmaker] 15/2/2014 12:43

Hi Baner,you make a good point-I went back many years and not once had Mallett delivered a return on equity in double figures. There seems to be a clubby, cosy, unhurried feel about the Company management style, a business that is managed rather than driven and where enhancing shareholder is of lesser importance.This archaic style obviously has to change and I believe it is and would cite the sale of the CHS property with planning permission attached and the possible subletting of the New York Showroom and various cost cutting measures ie the move to the current address saving some £600k pa as evidence of a change in management's priorities. However I think that the dire state of Mallett's markets over the last five years has masked improvements made to the business.Although I wholeheartedly agree with your sentiments,I don't share your pessimism.

best wishes

[baner] 15/2/2014 11:52

rainmaker

i find your comments and statements well thought through and valid. however, there is one "missing link" here - and that is that we have a board where the chairman has a fat fee but no shares, and another NED with a ridiculous share holding. add to that overpaid executives - paid bonuses for delivering nothing - and all these values that you so correctly point at - comes to no benefit to shareholders at all. the return from trading on shareholders capital has been negative for at least five years and if and when they deliver any acceptable profits, i am convinced the NED´s will increase salaries and bonuses for the executives.

this is what you get when there are no major shareholders/owners at the board and when obviously these major shareholders are not too bothered with how their money is being managed by the board. a really sad story - but also a clear warning signal.

[rainmaker] 15/2/2014 10:54

An often overlooked part of Antique Dealer,Mallett's business interests is their 23.75% stake in Masterpiece, the annual design,arts and antiques exhibition held in Chelsea in late june/early July each year. Established in 2010 to replace the Grosvenor House event which closed the previous year.The business has paid back its Partners modest investment of £150k each in three years-the definition of a good business. Furthermore imo there are whole load of special operating characteristics that make this a great business and potentially a very lucrative one for Mallett eg high operational gearing,negative conversion cycle, lack of bad debt risk, scalability, economies of scale etc


Although there was a slight drop in the number of exhibitors last year,Mallett's profit from the event rose to slightly to £87k thanks to a 20% increase in visitor numbers to over 34,000. This could well be a very profitable business venture for Mallett and their shareholders and one that Investors should be aware.If the antiques market continues to improve and Masterpiece are able to increase the number of exhibitors from current numbers of around 160 to a lot closer to rival TEFAT 240 stands then the business will be a very profitable and valuable one.


As the Roman Philosopher Seneca once said"luck is what happens when preparation meets opportunity"IMHO in Stock Market Value Investing
you create your own luck by being fully aware of such situations.

AIMHO,DYOR

regards