Mice Group Share Discussion Threads

[besbury] 21/2/2007 09:47

I would have thought so, boadicea. The odd number suggests the previous holder sold out completely.

[boadicea] 21/2/2007 09:44

Seems probable.
Should we not also get a RNS detailing a matching drop in A N Other's holding?

[besbury] 21/2/2007 08:47

Could this be the new home for the 11,639.696 we saw on Feb 16th.?



MICE Group Plc ("the Company")

Holding in Company


MICE Group Plc, the international marketing services group, has today been
advised by F & C Asset Management plc on behalf of the clients detailed below
that it has an interest in 13,573,592 ordinary shares of 4p each in the Company
representing 7.66% of the issued share capital of the Company.

[besbury] 17/2/2007 18:29

Thanks again, boadicea.

I will be watching very carefully next week as I have a fair number of MEG at the moment, although their original cost is equal to only about 10% of my current portflio value.

I had been in and out of these since Oct 4th 1996 when I paid 6p each, but lost interest in 2000 and have only been back in since 2005. In view of this there is quite a gap in my knowledge of the company. Howewver, it always appeared to be one of those companies that had excellent prospects which were never quite realized.

A snippet from the Nov 22nd Interim statement contains a good example:

Performance in the second half will be underpinned by a strong proposals
pipeline and supported by investment in the first half in a new operating and
finance system.

If I recall correctly, MICE have suffered from bad debts before, which suggests they have not learned from previous experience as it has happened again. IMO they fail to vet their customers with due diligence and should be aware by now that some prospective customers never intend paying and will find every excuse under the sun for not doing so when the time comes.

Another gem from the Nov 22nd Interim statement: If these discussions were "progressing well" almost 3 months ago, where are they now?

The Board announces that it is in discussions to sell the leisure assets of the Group. These discussions are progressing well but there is no certainty that they will lead to a disposal.

[boadicea] 17/2/2007 13:27

Besbury - Keeping it all low key and walking the share price down is a plausible strategy on the part of a propspective predator. It would also fit with the prospect of an imminent placing so it is dangerous to jump to a premature conclusion.
For instance, the large seller may already have been approached in relation to a placing and could be quite happy to sell for 23p if expecting to take a similar value of shares at, say, 20p.
Obviously I know nothing definite and the above is pure speculation on a couple of possibilities among many. (Afterthought: Tax loss selling/transfer is another.)
It will be worth watching next week to see what (if anything) comes to light.

[besbury] 17/2/2007 09:33

Thanks for your interesting summery of the current situation, boadicea.

I guessed it would be something along those lines.

If "imminent events" are likely, those crafty rascal MMs would surely have got wind of it by now? If so, why the almost daily tick down of the share price on such tiny volumnes?

[boadicea] 16/2/2007 23:59

There is little doubt that the three 'trades' are the same shares. The first two are timed identically (the O-trades) and the broker-to-broker (B-trade) is timed a fraction of a minute later although listed first. I don't see any particularly strong reasons to suspect that it was an error as there was ample time for it to be noticed and corrected before the close of trading.
The implication is of a pre-arranged deal involving an institution, a mm and two(?) brokers.
The size at 11M+ is significant. We already have two large holders with >15% each - HSBC and AXA. Platinum have sold down to below 3% but Artemis have stepped up to over 3% while AXA has been adding quietly but steadily. GAM was also last reported holding a little under 8%, I think. Bear Sterns and Teton are also in the picture.
Given the cooperation of just 2 players a 30% stake could readily be acquired and it would probably only take 4 players to make rather more than 40%.
If the game is played according to the rules (as is occasionally the case) we may possibly know by Wednesday who the buyer and seller were.
The absence of any share price response is a little surprising, not because of the buy/sell balance of the deal (we can assume that was neutral because it would have involved one sell, one buy and a single reported buy/sell) but because of the sheer size of the transaction which one would expect to stimulate speculation (accurate or otherwise) of imminent events.

[besbury] 16/2/2007 15:20

If it is 3 trades, that would represent nearly 20% of the shares in issue?

Edit: It looks like fat fingered Fred on Friday. "He" has been known to hit the button more than once. Funny thing is that one of the 3 is shown as a Broker trade and the other two as Ordinary.

Nonetheless, even one trade of 11,639.696 is quite intriguing at this time, with the share price retreating on almost a daily basis.

[seconduser] 16/2/2007 15:15

Just noticed your edit before I posted. Odd is the least of it!

[besbury] 16/2/2007 13:54

Just added another 20k @ 23.33 which have gone through on the Plus Market.

Much more interesting though, is the Broker trade of 11,639.696 @ 23. O^O

Edit: Looks like that large trade has been keyed in X 3? Or is it 3 seperate trades. Bit odd don't you think!

[scburbs] 16/2/2007 12:40

Hi TTNY,

I agree with yours and Boadicea's view. However, I think the trading statement is designed to specifically obscure the poor trading by mentioning those other issues. It clearly states that they are lesser issues. Safest to assume that most of the shortfall is poor trading.

The most worrying aspect of the trading statement is that slower sales growth should lead to improved working capital. No comfort was given in the trading statement that this was the case. I took the absence of that comfort to mean that cash flow was not strong.

[thistimenextyear] 16/2/2007 12:05

Some good debate folks. Glad to know I am not the only one sitting hear complemplating the MEG dilemma.

Schurbs >>> As per my previous post - what's your view on the trading update on 19th Jan stated "We now expect that Group profit before tax for the year will be at least £6 million.". Previously I think £9m had been forecasted by brokers. So agree a significant underperformance as they stated in the trading update. However, I read that like boadicea did as to include the reduction in revenues/profits of the American and International divisions AND the 3 lesser issues, including the accelerated write-down of certain hi-tech assets, a bad debt which will be provided for in full, and the negative effect of adverse foreign exchange translation on our North American business.

Generally, as you say if they quickly can be shown to take action in reducing the debt by selling off non-core assets at reasonable prices and prove that they can sustain a cashflow +ve model going forward we may get an upswing in the share price again.

Agree with comments regarding currency fluctuations would be incompetence at the highest levels if just a surprise and was not hedged! Heads should roll for that. Now where did the old FD go I wonder.

TTNY

[scburbs] 16/2/2007 10:26

Expocentric has a turnover of around £3.5-4m. I for one would be very happy for them to sell this one. Normal profits are around £0.5m, although last year was not a good one (extra admin costs).

More promisingly its subsidiary Expocentric.com turns over around £4m and makes an operating profit of £1+m.

I would have thought these two between them could raise say £10m (on a debt free basis).

It is not clear to me how non-core these are. They are quite possibly vertically integrated with the marketing/conference activities, i.e. if MICE sold them they would be a supplier to MICE.

Add to £10-15m from Zoo/Acquarium and we have £20-25m already. Debt of £30-35m would be much more manageable.

My message to the board is please get on and do something positive quickly!

The company also has £12m (NBV) of freehold property on its books (this is not the Zoo which is leasehold). I am not sure where it is located, but some form of sale and leaseback would help generate some cash to reduce debts.

More importantly they must focus on generating greater operating cashflow from the actual business as their plans involving gearing up central infrastructure for a sales expansion seem to have gone badly wrong.

[thistimenextyear] 16/2/2007 08:59

Suppose the main question is at these levels - do we think that the share price is currently undervalued in terms of breakup value OR as a viable business going forward?

[18bt] 16/2/2007 07:57

The more one looks at this group, the more it looks like a breakup candidate. One can see the logic of businesses like Expocentric (print centres in London) and the City Presentation Centre, but there must be limited synergy with the core business. If I were the management, I would really incur the wrath of PIs and MBO it and sell these off as well as the Zoos.

[18bt] 16/2/2007 07:30

Boadicea - I agree with you on £6m being post the three items - I would feel very misled if it was before them. I also read the $ issue as a translation issue - now the US is profitable the profits are worth less - it didn't matter when it was loss making.

What I am concerned about in these situations is the lack of management incentivsation - at what point do you cut your losses when, if you are like Jim Curley, your 1m of options at 37p and 250k at 28.75p are seriously out of the money?

[boadicea] 16/2/2007 00:21

TTNY - You are right to draw attention to the £6M before tax and whether this is before or after exceptionals.
I have assumed that it takes into account the three items they specifically mention, i.e. the bad debt, the US$ exchange rate issue and the accelerated high tech asset write-down. The first two will impact cash flow but the third will not.
Companies that have continual bad luck evidently suffer from a certain lack of management foresight.
If the currency issue is one of profit translation, that is fair enough and of no serious concern. However, if it is due to loss of margin resulting from costs in sterling vs revenue in US$, then it would appear that they failed to cover themselves with a forward currency position when taking the order, which is either careless or rash - depending on whether it was an oversight or deliberate (e.g. a gamble on currency movement) respectively.
Similarly, the extent of the foreseeable risk factor in the contract that resulted in the bad debt is impossible for me to judge. All I know is that some companies are better at assessing such risk than others.
I had hoped that various management changes meant they would be running a tighter ship by now instead of relying on fair weather to keep them afloat. There is unfortunately little evidence of this so far.
Given the current lowly capitalisation, one wonders whether it is a candidate for a takeover or private equity. If not, it rather implies that there may be an endemic problem in their main business sector which makes it unattractive - or are they just too diverse?

[fellowes2] 15/2/2007 20:17

Anyone thinking of commiting new money here, really should take a step back.
The very least I would await for is clarifaction of the profitabilty going forward. MEG has echoes of Photobition another highly aquisitive company in similar markets which went into recievership a few years back. I would be very careful here.

[wiganer] 15/2/2007 19:53

Looking to get back in again at about 21p ask, so if any other stale bulls could sell up to get MEG there quicker that would be great. Cheers.

[besbury] 15/2/2007 19:49

No idea why we are having this drip, drip, down on such small daily volumnes. No trades yesterday on the Plus market and only 3 small ones today.

We are almost back to the point where I added 50k on JAN 19th. I wonder if they are having a problem with the disposal of Blackpool Zoo, etc?

[norfolkdumpling2] 15/2/2007 17:02

I've cut my losses for the second time. Have lost a bundle on this.

Watch it shoot up now!!

Best of luck to the rest of you.

[scburbs] 08/2/2007 11:31

Good to see Artemis coming on board. The total institutional holding here is very significant for a company with such a low market cap.

[besbury] 07/2/2007 21:42

Can't say I have seen this holder of MEG previously. Could this be our new "sweeper upper"? having now attained the 3% reporting number.


MICE Group Plc ("the Company")


Holding in Company


MICE Group Plc, the international marketing services group, has today been
advised Artemis Investment Management Ltd on behalf of Artemis Alpha Trust that
it has an interest in 6,645,835 ordinary shares of 4p each in the Company
representing 3.75% of the issued share capital of the Company.


7 February 2007