Merchant House Share Discussion Threads

[billweb] 01/11/2012 15:18

that's the end of that

[tiltonboy] 01/11/2012 15:18

Citywire are reporting that MHG are delisting.

[officerdigby] 01/11/2012 15:17

Well this is either is the first step to them getting the checkbook out. Or the first step to closing up shop!

Your guess as good as mine... Need Holmes out now and someway to marginalize CW influence. Will it happen.. Before the inevitable..

[macsam] 01/11/2012 14:51

Has to be good that those who presided over the mismanagement of the Company are being moved aside.

[awja] 01/11/2012 14:27

RNS Number : 1325Q
Merchant House Group PLC
01 November 2012
Merchant House Group plc
("MHG" or the "Company")
Directorate Change
The Board of MHG announces that Christopher Day has stepped down as Chief Executive of the Company with immediate effect. He will remain on the Board of MHG's wholly owned subsidiary, Merchant Capital. James Keane, Managing Director of MHG, will assume the role of Chief Executive of the Company going forward.

[loverat] 29/10/2012 18:50

So, they are looking for cash to carry on.

Perhaps Mr Holmes old colleague Mr Allnutt might help out under this scheme. Mr Allnutt I also understand owns Photo Distribution - the pension fund of which was/is a shareholder in MHG. Also, perhaps the pair can sell the school in Bournemouth (mentioned below) which they purchased from Commodity Growth and then promply suspended what was left of the company.



A Cornish property investment company has opened a £250,000 funding pot to support local firms that have been let down by their bank.

Falmouth-based Penhale Estates is seeking to provide investment support to companies that are currently hampered by high street lending restrictions.

It aims to provide loans in return for a stake, which it says would be anything between 10 and 50 per cent of the business.

Penhale's managing director and majority stakeholder George Allnutt said: "We are looking at every business area or sector. My life is full of variety, so we will look at anything.

"If we see something really good, we are prepared to invest the full quarter of a million in a single go.

"A lot of companies are struggling with the banks and lending restrictions and I would like to be able to help them."

Penhale also has £300,000 plans to transform an old mine site into a surf school.

It has submitted plans to develop a former wash house on the site of the old Tywarnhayle mine, after acquiring the 30-acre property from Imperial College, London.

It intends for the surf school to open for business in 2012. Plans to restore a cottage on the site into a self-catering let have been held up, as the company pursues damages in court, following a spate of break-ins at the site.

Penhale which was established as a property investment company in 1928 and is now owned by six shareholders, has also made a combined £500,000 investment in a Bournemouth language school and a business management centre that it recently relocated from London to Oxford.

The language school, English 2000, has an intake of around 3,000 pupils per year. Penhale has already reconfigured the business to avoid visa restrictions on non-EU students impacting its income, with 80 per cent of students attending its short-courses now coming from Europe.

Mr Allnutt said that Penhale now has plans to expand the business by establishing language schools in London, Torquay and Cornwall, through the acquisition of existing businesses.

"Quite a lot of schools are now facing difficulties because of visa restrictions, which gives us a good opportunity to move in," he said.

"We have scope to grow our business, through our existing client base."

Penhale currently employs around 70 people through its business interests, including 40 in its distribution firm Cougar Couriers, which operates in and around the South East.

Mr Allnutt also has an eye on the renewables sector and has been in talks with developers in China to pilot hydro-electricity technology that could be used to power properties located close by rivers and streams.

"The advantage of water as a power source, is that once you've used it, you can pass it on to neighbours down stream," he said.

For more information regarding Penhale Estate's investment fund, call 01326 250465

[mike111d] 29/10/2012 13:32

Looking at the balance sheet as per the RNS issued this morning I would expect that the regualtor will be looking for circa £2m of incremental funding to sign off on the company returning. Aside from the trade payables, I guess that who they now owe further monies to and on what terms will have some influence on the outcome.

[zitec] 29/10/2012 13:13

I think if they did put MHG into administration it would be highly unlikely that the FSA would allow the directors here to purchase MHFS or Merchant Capital which in turn ties Merchant Trading, UCITS etc with the MC FSA partnerships. So that would be another reason why the directors wouldn't wish to let go here. Not only would they not be able to buy the busines cheap, they'd be out of a job too.

I think at best, the only solution here is a massive dilution raising £1m+

Although that wouldn't please Whyte at least the value of his shares at the 0.05 price point would remain so he would at least be at breakeven.

Just remains who would put money into this and how would Beia feel after punting so much cash in short term.

[mike111d] 29/10/2012 12:09

It seems evident to me from the RNS that as suspected it is a lack of funding and apparent viability of the business that is preventing the regulators from allowing the stock to resume trading. Essentially whilst they have grown revenues to an extent this has been at the expense of incurring larger operating losses which in turn have taken the level of indebtedness to an even higher level, with creditors now requiring paying. This is not sustainable however they attempt to dress it up.

So all told the RNS confirms that you are effectively between a rock and a hard place. Either they manage to raise further funds beyond those pencilled in from Beia to settle debts and provide the working capital that is not being thrown off from current operations or they will have to proceed with a cancellation of the listing as flagged in the RNS. Essentially you will either be diluted if they can secure new funds or the shares will become worthless if cancelled. Sadly there is little that can be done about this and they have IMO attempted to cover all bases with the contents of the RNS released this morning.

Just a thought, the regulator may consider it appropriate to let the de-listing proceed leaving the company to raise funds and continue trading off market, thereby protecting to some degree the investors of MHG investee companies, whilst preventing new investors from potentially exposing themselves to an equity stake here.

Not based upon any further research but I would surmise that further to the RNS this morning that the regulator has most likely given them a further week to either bring in the additional funds or de-list the stock, as this situation cannot persist indefinitely. In fact the proposed 5/11 AGM date could well be your cut off point.

[the ross] 29/10/2012 11:52

After speaking to some colleages smoke way, they think the FSA are. But also they believe that the profit they've made for a small setup like MHG is actually not bad due to economic climate and other structured products in the market.

He eluded to them needing to ensure all IFA's are ok and passed to work and if not they'll need to weed out the ones who aren't providing any income and not fit to be IFA's. There's been new rules posted by the regulators on IFA's which IMHO MHG will now have to follow.

The fact remains however they need to prove to any future investors and BEIA that they are continuing to make profit and AIM relist can be secured.

There in lies the problem.... he did mention however and Z eluded to as well that there's too many parties involved looking at the list of shareholders for them to take a hit here. R

[zitec] 29/10/2012 11:16

"if they really want to cancel trading on AIM, why haven't they done so already??? "

The reason being this business can only be run as a PLC, without continuous funding from insti's and shareholders it cannot survive. In the real world you cannot consistantly make £1m-£2m losses a year and get away with it.

Secondly, Whyte still has masses of convertible shares/warrants to cash in and a large stake in the company along with many of the directors. This has been a little cash machine for him, he won't want to give that up.

Don't forget the people who make the top decisions here are prolific liquidators of companies. They have done it many, many times. The only thing that will be worrying them about doing it is the FSA as they have all those customers who have already been through Keydata/Arc Capital/Pritchard nightmares and the authorities who will be watching this lot like a hawk after the spotlight of Craig Whyte etc

[grlz] 29/10/2012 11:11

are the ppl running this show actually fit and proper to do so?

[officerdigby] 29/10/2012 10:57

6. Now this is the best part which is puzzling me: if they really want to cancel trading on AIM, why haven't they done so already???
---------------------------------------------------

I also find this puzzling as to me it sounds like they are considering this option. Or perhaps they have no choice.

In fact the two results RNS indicate they can't run or expand/or fund/or keep control of costs... Thinking of the last (before this funding) that was chucked away immediately on investments.


It's all too crazy to even comment!

[lufc5] 29/10/2012 10:42

Where's our divi!!!!!??????

They got that one slightly err..... wrong.

[dr samsam] 29/10/2012 10:26

1. I wonder when they will start to be responsible, and start paying their salaries from income, and not just rely on funding!

2. In previous RNS they said that the share should be 'unsuspended' once the results have been published. Clearly NOT!

3. This is now becoming standard "early October". Whatever!

4. "Shareholders will be updated". This is all they can say after 6 months of UPDATING? At least they could give us a new date, which they wouldn't stick to anyway...

5. What is the point in going to the AGM if they will not discuss anything relevant to shareholders. They will just re-appoint themselves, gain more authority, and employ more friends.

6. Now this is the best part which is puzzling me: if they really want to cancel trading on AIM, why haven't they done so already???

7. Sell the fukin assets or whatever you want. They buy assets that make losses, and increase revenue?? What a fuk is that about?.

Just put the trading back on, and stop screwing about!

[andy] 29/10/2012 09:30

"There are also other opportunities in negotiation.
However, the adequacy of working capital at this time remains uncertain and as sufficient funding may not be received in the short term, the Board is also exploring all other options available to it, which may include asset or business disposals, and there is also a risk of cancellation of trading on AIM. The Company's shares remain suspended from trading on AIM and shareholders will be updated in due course. "

----------

That is the pertinent part IMO.

[zitec] 29/10/2012 09:20

Just not a viable business is it? I mean another £1m+ loss, bringing the accumulative losses to over £10m-£15m+ since inception.

When are they ever going to look at their operating costs and see they are just too damn high?

As Dr S says, not quite sure what is going on with the funding, are they saying the £2m from Beia isn't going to be enough?

[the ross] 29/10/2012 08:44

Currently trying to secure transport down on 5th and reschedule meetings.Struggle at the moment but I cant be the only one wanting to head to Lime St on the 5th.

[bubble pricker] 29/10/2012 08:21

Who is going to the AGM? Shall we have a pre-meeting to discuss any action/questions at the AG?

[dr samsam] 29/10/2012 07:40

What a great way of explaining why the share remains suspended. This fukin RNS is a good definition of contradiction. That's all it is! I hope they all drop d..d!

[awja] 29/10/2012 07:30

Continued...........

Operating Review
In the structured products division of Merchant Capital Limited, following a strong start to the year, sales slowed following the difficulties previously reported around the loss and subsequent replacement of our custodian. Whilst the UK retail business has been particularly difficult and is likely to remain so in the short term, the marketing of plans offshore has provided a continuing source of sales. In order to expand the latter market, a new sales team has recently been appointed and as it is settles into the business is expected to contribute to more diversified sales.
The client assets held by the previous custodian have been transferred in full to Reyker Securities plc, our new custodian. Whilst some client monies remain to be released by the special administrator of the previous custodian, it is understood that the Financial Services Compensation Scheme protections will mean that no clients affected by the special administration will incur a loss.
The asset management division has also been through a difficult period as a consequence of the suspension of the Group's shares and weak stock markets caused largely by the uncertainty in Europe. Four UCITS funds were liquidated in 2012 as redemptions resulted in uneconomic fund sizes. In contrast, a new UCITS fund has recently been approved by the central Bank Of Ireland and is expected to launch in the near future. Whilst assets under management have fallen in the UCITS business, revenues have not as yet been adversely affected but new funds will have to be launched if this is to be sustained. Current total assets under management are approximately USD25 million and there are plans to launch additional funds.
PYXMarkets, the options trading platform was, as reported, launched in the second quarter of 2012. Following an initial period of low trading volumes, the group expects to accelerate the promotion of this business.
Merchant House Financial Services Limited has since the beginning of the year made progress in the reduction of its monthly running costs and in reducing the number of low profit advisors. This has been implemented during a period, in which as previously mentioned, revenues have increased by approximately 22% over the same period last year. The business, in partnership with our regulatory principal, has also made progress in being RDR (the new regulatory regime under which IFA businesses will have to operate from early 2013) ready. This is against a generally accepted opinion that much of the IFA market still has some way to go to be RDR ready.
Financial Position and Prospects
The difficulties outlined above and reported this year, as well as the suspension on AIM, have inevitably impacted the business, the Group's financial and trading position and its performance within the regulatory framework in which it operates. The directors have considered the short term trading prospects of the Group together with the current financial position of the Group. That includes a number of creditors who are due monies outside their normal settlement terms and with which the Company is in ongoing discussions to allow settlement over a period of time. The final GBP0.4 million due from Beia in respect of their investment in 1 billion shares at a price of 0.04p, the receipt of which having initially been delayed by the need for approval by the FSA, is now expected shortly but it is clear that additional funds will be required in the short term to provide sufficient working capital and investment in the business.
The directors are therefore pursuing a number of fund raising opportunities with a view to raising additional funds. This includes a funding agreement under negotiation which the Board believes would, in conjunction with the GBP0.4 million to be received from Beia, deliver the required finance, either immediately on completion or in stages. There are also other opportunities in negotiation.
However, the adequacy of working capital at this time remains uncertain and as sufficient funding may not be received in the short term, the Board is also exploring all other options available to it, which may include asset or business disposals, and there is also a risk of cancellation of trading on AIM. The Company's shares remain suspended from trading on AIM and shareholders will be updated in due course.
Outlook
While the Board's immediate focus is on the successful conclusion to raising sufficient funds, it is positive that the underlying businesses have made good progress this year and the Board looks forward to the continued development of the business in the final quarter and into next year.
Also during the period under review, the board has been strengthened with the addition of Mr James Keane and Mr Stephen Drew, who were appointed on 19 June.
I would like to take this opportunity to thank all our employees for their continued hard work and commitment and shareholders for their continued support.
James Holmes
Chairman
26 October 2012

[skinny] 29/10/2012 07:07

Financial Results

In the half year to June 2012:

· Turnover increased by 31% to £4.0 million (6 months to June 2011: £3.1 million)
· Gross profit increased by 20% to £1.3 million (6 months to June 2011: £1.1 million)
· Operating loss of £1.4 million (6 months to June 2011: £0.5 million loss) after charging £0.5 million in respect of acquisition costs of IFA members

Revenues have continued to grow, especially within our IFA business, Merchant House Financial Services Ltd, where sales of £2.7 million in the first half compare to sales of £2.2 million for the same period last year and £4.7 million in the whole of 2011.

Within Merchant Capital Ltd, predominantly Structured Products, sales were £1.3 million compared to £0.9 million for the same period last year and £2.9 million for the whole of 2011.

Net debt grew to £1.6 million at the period end (30 June 2011: net cash of £0.09 million). As shareholders will know, the Group has procured an aggregate investment of £2 million from Beia Capital Ltd and Beia Investment Partners LLP (together "Beia") of which these results reflect the first £0.25 million, received as a convertible loan. Subsequent to the period end, a further £1.35 million before expenses has been received leaving £0.4 million to be remitted by 22 November 2012.

[loverat] 29/10/2012 06:25

That TMF thread seems to follow a familiar pattern and that has been going on for months. People who invested money in MCR having difficulty in contacting the company and being fobbed off after not receiving their interest payments and now worry about their original investment. It would not be surprising if the FSA have grave concerns about this relisting. One investor states that the investment was 'almost too good to be true' but it seems none of them did any basic research or even google James Holmes or the others.

[zitec] 28/10/2012 23:48

See what transpires at the AGM before taking steps I reckon.

[pwhite73] 28/10/2012 23:39

1terryh

I wouldn't waste any time with those bunch of clowns. They're interested in one thing only, getting their names into the national headlines. If memory serves me correct they brought a claim against over 100 ADVFN posters in a now infamous and unspeakable case. They were pilloried by the judge.