Quayle Munro Share Discussion Threads

[stevie blunder] 26/4/2008 18:22

Morris backed out of a 7 million land purchase a few weeks ago, but have come back with another offer, lower I would assume. Smart move, but shows they are still in the market for land at the right price.




Tayside are publishing their Clinical Trial results in Sept

[topvest] 26/4/2008 09:05

I think Quayle Munro have got this all wrong. Buying a corporate finance house at this point in the cycle is the wrong time. They will be cheaper in 6m. Obviously holding a highly leveraged housebuilder in these times is also plain stupid, when they could have sold a couple of years back. Come back in 12m imho.

[makingheaps] 25/4/2008 14:58

Been away on business for a while. The market now seems to have revalued the shares in line with the Tulleken implied price. Today's rise is caused by a £3k purchase. I find this rise extraordinary given the Persimmon announcement yesterday that they are halting construction. I would be really concerned now about the prospects for Morris in the short term at least. In addition I would have thought that the merchant bank lay offs would have affected sentiment towards the advisory business. Less deals to be done and less money to do them with.

It was positive that they got STS away but aren't they back where they started - as you say with a minority stake in a business with no exit route. I thought it was that position that led them to increase their stake to 93% in the first place. It seemed to take a long time to conclude. I wonder if they didn't get as much as they had hoped due to the lack of available funds for MBO's so consequently retained a higher stake.

[stevie blunder] 17/4/2008 10:01

Hi Makingheaps,
I've been on Holiday the past 2 weeks, nice to see they have been busy while I was gone!

Today's announcement on STS seems like a good deal, and should result in an uplift in NAV if I have understand it properly. OTOH they are left with a 49% stake in a company with no exit strategy on the horizon that I can see, except to wait for the management to retire and sell the company at that point. Hopefully STS will pay out some good divis in the meantime.

The Acquisition of Tulleken is encouraging, I was expecting/hoping something to be acquired after their comments in the interims. We just have to wait and see how it performs, hopefully they will break the rule that acquisitions are usually value destroying ;-) I am a bit puzzled by the terms which are quoted as 6.1 million, 313,988 shares and the payment of £1,952,386 in cash. On my calculator that works out as 13 quid a share, well out of line with the market price. At least the vendors were not put off by part of the consideration being effectively in Morris shares!


On the subject on AMBR, I haven't looked at them for a while, last time I did they were at a premium to NAV, which I see have now gone. Thanks for the heads-up, I will have a look, a good divi and some asset backing always appeals to me. I already have Anglo Pacific, which is more of an active/hands-on investor than an advisor in the same sector.

[makingheaps] 14/4/2008 10:16

Good to see another acquisition today. Bit disappointed there is not more financial information in the announcement. MM's have moved the offer price £1 higher but widened the spread! Absolutely no trades as usual.

[makingheaps] 07/4/2008 12:42

SB,

Are you familiar with AMBR? Similarities to QYM are quite striking - a mix of investment company and advisory services, hived off a portion of the investment portfoliio into a separate AIM quoted company which they now manage, large cash pile, and recently made an acquisition to expand the advisory business.

The difference is in the sectors they operate but the way they are rated is quite different too. AMBR price is currently 40p but NAV is 45p (or it was at year end). Basically you get the banking and advisory business for nothing! QYM used to be rated like this but times have changed (correctly in my view).

I bought AMBR some time ago for 36p and got out at 53p and kicked myself for not selling earlier. I think I might be tempted back to AMBR before QYM.

[stevie blunder] 21/3/2008 18:18

I see no compelling reason to buy the share right now. There is a lack of any news in the offing that could take the stock upwards, and in this market, a continued drift is the most likely.

There is still a chance that the housing market will freeze solid and Morris will suffer even more than at present.

However the current price is as you say, on a trade of 250 shares, the first trade in days, so hardly a liquid market that would give a truly representative price for the whole company.

I was able to sell a third of my stock at 14 quid last year, (although I did buy a few back at a lower price) but I couldn't shift what I still have at anything near the present price, even if I wanted to.

Disappointed not to see director buying, would like to think that is because there is a significant deal in the offing, but that is probably just wishful thinging.

Bad week for the folio, now down almost as much as the market this year to date.

Ho Hum.

[makingheaps] 20/3/2008 17:20

Well someone sold 250 this morning and as a result we now have an offer of £10. I told myself that was the level I would buy back in at. Why am I still feeling nervous?

[topvest] 10/3/2008 21:13

Well, getting out at £15 is starting to looks smart. When you have so much value in one investment and the sector is toppy you should look to exit. Big mistake to shareholder value creation in the short term, I think.

[makingheaps] 10/3/2008 13:51

Sounds like you're on thin ice there!! I agree things could be dull for a while although I see this morning the asking price is down to £11. Lets hope for some (positive)action on MRS.

[stevie blunder] 07/3/2008 16:07

To be honest I expect things to be a bit dull here going forward. Now that they are out of the PFI management game they can invest in PFI on their own account, but that is long term stuff. The best hope for excitement would be some deal involving TFT, but again that looks some way off.

Mr Norris has plenty of incentive to grow the advisory business, and investment opportunities should crop up from time to time, indeed they say they are keeping a high level of cash for just such an eventuality.

My wife bought some in the summer, (I did NOT advise her to, though neither did I advise against). She is sitting on a loss of course. So I hope, for the sake of my ears, that the price doesn't decline further....;-))

[makingheaps] 07/3/2008 12:16

BTW steve I take your point on the NAV of Morris which of course will increase over time assuming they remain profitable at least. I think that kind of puts a base line under all this valuation debate.

[makingheaps] 06/3/2008 18:41

Steve,

In relation to the increase in revenue to £4.1m "A major factor of this increase was the contribution from New Boathouse Capital." I think the two advisory service businesses were about the same size so an increase of 100% plus was not unexpected. Also bear in mind that not only are they still taking revenue from the Pfi management contract but they are also spreading over the remaining period the cancellation fee. They will have to work hard to replace that.

Boathouse certainly points to more exotic and exciting times ahead!

[stevie blunder] 06/3/2008 12:24

Maybe we will see some director buying, that might help.

Morris operating profits in the first half were 15 million, and are forecast to be 33 million for the year to march 2008, so they are not falling off a cliff. Morris net assets were 47 million at last year end, and should reach 60 million with retained profits this year, although that figure includes 15 million goodwill. They carry the 25% equity in Morris at 10.5 million, which is below net tangible assets. That offers some comfort. I expect Morris to be worth considerably more in a few years and I am happy to leave it at that.

I think Boathouse is doing well: "Excluding the impact of the temporary
consolidation, revenue increased by 116% from £1.9 million to £4.1 million."

Interesting to see that Peter Norris is in the Far east right now:

Peter Norris, Chief Executive 07973 963 294
(Far East time)


I bet he is not on holiday ;-))

[makingheaps] 06/3/2008 12:05

Of the £7 per share of assets £3.50 is Morris. In the next twelve months will they sell less houses than in the previous year? Will the prices they obtain be lower? Will their costs rise? I think yes, yes and yes meaning another sqeeze on profits possibly similar to the 17% indicated yesterday for this year.

In a years time the valuation of Morris could easily be another £1 per share less and they'd have to do something spectacular with the other unlisted investments to compensate for that.

The valuation is becoming more and more dependant on the advisory business and the message there seems mixed.

What holds the price up is the lack of liquidity in the market. They are still offered at £12. I would be tempted at £10.

[makingheaps] 05/3/2008 18:50

First reaction to the results - stated NAV 864.4p includes goodwill on Boathouse of 164p which should in my view be ignored. This is worse than I was expecting and they have conveniently changed the valuation method for Morris into the bargain!On the other hand there is 12p a share to add back if you reclassify Submersible as an unlisted investment again instead of consolidating it and I would expect some upside to be realised in the transaction.

Morris expect operating profits to be 17% lower than last year. Compared to what I have read this would be a pretty good outcome and probably still includes a March to June 07 quarter that was ahead of the previous year. I think the year 08/09 therefore will be worse again. On the other hand the market PER will rise above the current level I am sure at some point.

Overall I think the assets (held as investments, cash or buildings) are worth £7 a share.

I'm finding it difficult to understand what the advisory side is bringing and am conscious that the Pfi Plc fee income will be lost. So far as I can judge the post tax earnings of this activity are about £2m now that Boathouse is added or around 50p a share. That might be worth £4.

Add the two together gives £11. Still a little high I feel.

[stevie blunder] 01/3/2008 19:30

couple of snippets ahead of the results on Tuesday:

Tayside Graft available to NHS from April according to this:




According to the Morris website, their turnover is "almost £250m"



given that t/o last year was 195 million it looks like there is still some growth this year. There is almost bound to be some margin squeeze. There are some incentives on flats, like 5% deposit paid, free fitted carpets and stamp duty paid, and a few on the house side, and a few part exchange offers.

[stevie blunder] 30/1/2008 15:57

Ouch! Glad I don't have any OKD.

Oh well, 4 weeks till the interims approx, so we shall see what we shall see
:-))

[makingheaps] 30/1/2008 11:47

Steve, As you know I remain a fan! I just think the news on Morris will be so horrendous the price has further to fall. Have a read of the Oakdene RNS this morning. As a result they are off 30% at the moment. There are some specific issues there and its a different region of the country of course. My shares in Bovis have roughly halved in value from the peak. If Morris halves by my reckoning NAV will be around £8.

I agree the Boathouse acquisition looks great. Adjusted pre tax profit was about £1m and they paid £7m for it. Using the cash pile to pay 40% of the consideration will be earnings enhancing no doubt while the 10% increase in the share capital should help bind in the key staff. Like you say we need some information to judge. Same goes for the Pfi exit and related fees. As always there is silence from the company.

[stevie blunder] 28/1/2008 20:39

Also worth taking a look around the AMG website, they seem to be going places and have recently appointed a new Middle East sales director. Their offer of uncompressed video esp in security applications seems powerful, they were attending a Security convention in Dubai in Jan, and had a few ME contracts last year. I think they could be floated if the market conditions were right.

The deal to off-load part of Submersible was supposed to be done by end 2007, but either was not accomplished, or is not considered material enough to inform shareholders. Credit conditions may have had an impact I suppose.

TFT is still a long story, but it could be very big.

I think the real drivers of the share price, apart from Morris of course, will be the statement of how much work they are getting at New Boathouse. And about that, I don't have a clue.........

[makingheaps] 28/1/2008 19:59

Good news re TFT but a bit of perspective required. Investors have injected £6.7m for 80% of which QYM paid £1.4m so their stake is approx 17%. Lets be bold and guess that in the next three years TFT becomes a 10 bagger ie. worth something like £85m. That would only add about £3 to QYM's NAV. I'm not saying it's a bad investment but it's not the real driver of the share price right now. If you're looking for positive news in the unlisted investments I think their stake in Submersible has better short term prospects.

[stevie blunder] 26/1/2008 17:54

Here's the link:



TFT's first product, a vascular graft, has now received a CE mark, the European Union health and safety authorisation. Full results of clinical trials in Belgium and the Netherlands, which the company says are going extremely well, will be published later this year.

David Lawrence, TFT's chief executive, says: "With the award of the CE mark, we can now sign up a manufacturer and distributors for the graft to start to bringing revenues into the company."

Lawrence, a former senior executive with life science companies such as Acambis, Chiron and GlaxoSmith-Kline, joined TFT in September last year and conducted a strategic review of the company along with its new non-executive chairperson, Alison Spaull – director of the Scottish government chief scientist's office.