Quayle Munro Share Discussion Threads

[topvest] 26/1/2008 13:39

They should have reduced their exposure to Morris long ago.

[mw8156] 26/1/2008 12:37

Big article on tayside in today's FT...

[makingheaps] 21/1/2008 12:00

I'm not sure how the directors will value Morris in a falling market. Traditionally they have looked at multiples of historic earnings but it seems certain that 2008 will be worse for housebuilders than 2007 therefore they will need to build a discount into their formula. If volume falls 20% and prices are lower too that could make a significant dent in profits. The last reported numbers were that post tax profit for 6 months to September would be £15m compared to £16.5m the year before. It could be that the real pain comes in 2008/09.

[makingheaps] 11/1/2008 10:08

It's certainly encouraging that Morris still clearly has access to cash. I would think £6.4m is a pretty big acquisition for them. today however Bovis have said their pipeline sales are 20% lower than a year ago. You can't escape the fact that Morris's profits will be lower and that the market PE ratio has fallen too. Its just a question of how much.
A very interesting paper on Tayflow and some encouraging statements but commercial success through licensing deals seems some way off.
On the fees I think we are in uncertain territory. What effect has the cerdit crunch had on the traditional workflow? Have they resolved the situation with PFI on the termination? The Virgin bid seems a plus for sure.
I said I hoped to buy back at £12 but I'm wondering now if I would or it will go even lower. The lack of liquidity seem to make it less volatile than would otherwise be the case. there's nobody to sell therefore the MM's have no reason to lower the price.Otherwise I think we might be £10 now.

[joan of arc] 08/1/2008 23:27

And I presume they are still getting good fees advising Virgin on NR takeover

[stevie blunder] 08/1/2008 08:21

Morris still seem confident:

MANCHESTER engineering company Renold has revealed that it has sold a factory site in Burton on Trent to north west housebuilder Morris Homes for £6.4m.




Tayside Flow are in commercial talks about the peripheral Graft, and have a CE mark for it :

[makingheaps] 03/1/2008 14:43

Someone joined me on the sidelines selling 600 today.

[makingheaps] 10/12/2007 13:10

Thats why I've sold out topvest but time will tell. I should think Morris remains a great regional business and who knows they may either get bought out or be able to take advantage somehow of lower prices. Hard to see however that the next year won't be a painful one.

[topvest] 06/12/2007 21:30

I agree. They have made a strategic mistake in my book for not unloading the vast majority of their Morris investment in the good times. Those good times have now gone and the next year at least will be particularly tough for housebuilders. Not the time to be a highly leveraged housebuilder really!

[stevie blunder] 05/12/2007 16:45

The share price could be all over the place in the next few months, with the fall in NAV due to Morris, and perhaps some selling ahead of the removal of taper relief. The outlook is particularly opaque right now.

You might well get your wish to be able to get back on more cheaply. Hope you don't tho' ;-))))

[makingheaps] 30/11/2007 17:30

I,ve decided to sell. The next valuation of Morris will show a significant fall. I am nervous about the PFI management fee which doesn't seem to be resolved and while I see the acquisition of Boathouse as an exciting development I think it is unlikely the price will rise from here. Conversley the chances of buying back in somewhere in the £10 - £12 range seem reasonable. I remain a long term fan and have probably got this completely wrong!

[joan of arc] 26/11/2007 23:35

Well it looks like Virgin may well get NR. So how much mileage is there in it for QYM??

[joan of arc] 05/11/2007 12:02

Stevie - Fingers crossed then.

[stevie blunder] 05/11/2007 09:34

Hi Joan,
mmmmmm, how long is s piece of string..... If the Nav is about 11 pounds/share, then the corporate advisory business is valued at about 20 million. NBC had pre tax profits of just over 1 million for the year prior to acquisition, but we know that QYM's profits on PFI will be down this year. There is no "visibility" of earnings this year in Edinburgh.

So is 20 million a fair price? it all depends on the on-going level of business, there is clearly some downside risk, as you imply, if the pipeline dries up at NBC. All we can say at the moment is "so far so good". We will have to wait for the interims, which are in early march IIRC. We may see some tangible benefits then of the Victor Chu connection, lets hope so anyway. In the longer term I can see upside from co-investment opportunities arising from the corporate finance work at NBC, using the surplus capital that QYM is sitting on.

[joan of arc] 04/11/2007 17:32

Stevie

Thanks for the update. How do you feel what you gleaned from the AGM squares with the share price? I think we have quite a lot of presumed value on future NBC business already built into it.

[stevie blunder] 04/11/2007 16:01

The AGM was over in about 10 minutes! but I got to chat with some of the directors over canapes and drinks afterwards ;-)

Ian Jones said that did not want to have to issue a ststement to the stock exchange about current trading, so restricted his comments to saying that he stood by the outlook statement in the Finals. He expressed his pleasure at seeing Quayle Munro being on front page of the FT, and said that he had always wanted the company to be advising on big ticket business. I got the impression he feels a great sense of acheivement at the acquisition of NBC.

He did add that with regard to Morris Homes, that house builders in general had not seen pressure on selling prices. While that is a general statement, we can take it as reassuring with regards to Morris I think.

I talked with three of the New Boathouse directors, who were all very bullish about the future,as you would expect, and who confirmed that the London office was very busy.

[makingheaps] 25/10/2007 12:19

Thats impressive growth. I would expect it to be sold privately for between £5.6m and £7m. If they floated part of it maybe on AIM it they might get more. A lot depends on how good the growth story is.

[stevie blunder] 24/10/2007 14:58

Just got the Submersible TV accounts from Companies House for year to Dec 2006, filed on 12th October.

They show post tax profits of 700k, on turnover up from 3.4 million in 2005 to 10 million in 2006. That is mainly due to strong growth in the Middle east, where T/O went from 200k to 5.1 million, and the Far East where T/O went from 348K to 2.2 million.

Interestingly in the QYM annual report they state that they intend to dispose of the controlling interest in Sub TV before the end of the year. They are carried at a value of 3.47 million, so not sure how much uplift there will be.

[stevie blunder] 18/10/2007 21:54

LOL! OK you are excused!. I will report back - if there is anything useful to say.

[makingheaps] 18/10/2007 14:53

Is it in Edinburgh? Bit of a drag from the South Coast!

[stevie blunder] 16/10/2007 19:37

The Scotsman did make a comment that the rise in QYM share price was due to the NR/Virgin link, and I think that is right.

Like you I don't see the takeover of NR by Virgin as goer, but you never know, and I am sure that Mr Norris will see we get paid whetever happens!

The AGM is 2nd Nov at 12 noon, are you going? I will try to make it.

[makingheaps] 16/10/2007 18:20

Steve, regarding the Bovis acquisition I agree entirely. The take out multiple of 5.7 compares to the valuation QYM used at June of 5.4 which gives confidence but as you rightly point out the formula used by QYM will be lower still if market valuations persist. They referred to a 17% fall at the date of the report which equates to a PE of 4.5. Of course the other question is what can they do with the stake? Bovis got control of the company for that ratio, QYM could only offer a 25% ish stake.

The NR/Virgin stuff is fascinating and may explain the recent uptick in the share price It certainly represents a change in direction and nice to see that Boathouse and Far Eastern are linked. I hope they are not being paid on a success basis as I am a bit sceptical Virgin will pull it off.

[stevie blunder] 16/10/2007 12:48

The plot thickens ( or it all becomes clear, depending on how you look at it):

Victor Chu behind Virgin's Rock bid

[stevie blunder] 12/10/2007 17:21

Check out the proposal from Virgin to buy Northern Rock:



The Consortium is being advised by Greenhill & Co International LLP
('Greenhill') and New Boathouse Capital, a subsidiary of Quayle Munro Holdings
('Quayle Munro Group').



How's that for for starters in their new business?

[stevie blunder] 12/10/2007 08:11

Some re-assurance about the value of Morris. Bovis have bought Elite Homes Group Limited for 25.7 million.




"cash consideration of £25.7 million,
plus assumption of £46.2 million of net debt.

Elite Homes Group Limited is a homebuilder based in the north of England, with
operations across the North West and Yorkshire. For the year ended 31st October
2006 its turnover was £58.4 million, its profit before tax was £6.4 million and
its gross assets were £55.0 million."

That is a pe of 5.7, for a company that has an even higher debt to equity ratio than Morris. Just a straw in the wind, and the carrying value is still likely to fall of course.