Quayle Munro Share Discussion Threads

[spooky] 18/2/2013 08:43

Indications are that the interims will be very good it's just a shame that you can't really buy more than 1,000 shares.

[stevie blunder] 18/2/2013 08:31

Interims on 14th March and 2 investor days.
They must think they have a good story to tell if they are going to this trouble, especially with an Interim statement.

I plan to attend the Edinburgh event, should be interesting as I haven't been to an AGM since they moved to London.

[pillion] 13/2/2013 15:28

Morris Homes; is it the same company that was started off in Wigan by Jim Morris ?

[joan of arc] 11/2/2013 20:13

Agreed, this is a sleeper but will wake up some time soon. This is the best performing share I have ever owned. Over the last 10+ years it has made me a small fortune.
It has stalled a bit over the last few years but definitely has some mileage to go yet.

[spooky] 11/2/2013 16:35

Very undervalued, but they are not exactly easy to buy at the moment.

[stevie blunder] 11/2/2013 16:12

Very good point on the refinance. The last banking agreements were entered into in 2010 and my impression is that things have eased since then.
Of course any acquirer could do the same :-)

[britishb] 11/2/2013 15:07

They seem to paying sky high interest rate at Morrris (9% ?). I reckon if they refi that they start to throw off buckets of cash like the other builders. QYM share of Morris NAV is almost = QYM market cap. Then there's the cash, advisory biz and other investments in for free. Possibility to double from here and still look moderately valued I suspect.

[stevie blunder] 17/1/2013 16:55

Agree entirely. That is why the statement by the Morris board that they are in an "excellent position to generate cash this year" is so encouraging.

Not that the debt can fall all that fast, operating margins are already quite high at 16%, but maybe they can sell some land?

Better still sell the company :-)

[makinbuks] 16/1/2013 14:49

Lets hope Morris is as good at reducing debt as Barratts, announced today £542m down to £332m and committed to further cutting to £160m while reinstating a dividend. That is the best way to increase the "value" of Morris.

[stevie blunder] 22/12/2012 12:45

Yes excellent news. I see he paid up to 600p for some of them.
I wonder who was selling. We may see some holdings changed RNS's soon.

With the housing market forecast to pick up somewhat next year (

the outlook for Morris should improve further.

[joan of arc] 21/12/2012 17:27

That is some statment of confidence from the Chairman - over £1m worth and all above the indicated market price. He clearly knows something although for it to be seen to be above board it will be a few months before we see what. A Morris sale? We should follow him in.

[joan of arc] 17/10/2012 20:06

Whatever it might turn out to be, hopefully it would be more than QYM have it on their books for.

[stevie blunder] 17/10/2012 17:25

While we are on the subject of Morris, I noticed that Persimmon had picked another small house builder :Hillreed Homes



For 35.7 million.

The last accounts of Hillreed Homes to June 2011 showed net assets of 22 million, turnover of 32 million and operating profits of 3.7 million, with after tax profits of 2.7 million. They had low gearing of 22% at year end.

So a smaller company, but with much less debt, going for a premium to NAV.
I would not be surprised by a trade sale of Morris in the next 18 months, could they get a premium to NAV? depends on the how sound the unrealised value in the land bank is.

[joan of arc] 13/10/2012 15:56

Stevie, thanks again.

[stevie blunder] 13/10/2012 09:38

Hi Joan,
The accounts are up at Companies house now:



Edit: that link doesn't work, go here and search for Morris Group:



I haven't got the accounts for prior years, they will be on an old computer now long gone, but from QYM accounts of 2008:

For the year ended 31 March 2008 Morris had sales of £163.3m compared with £194.5m the previous year, a fall of 16%. Operating profits were £34.6m compared with £40m the previous year with profits after interest and tax of £12.1m compared with £18m the previous year.
---------------------------------------------------

The accounts to March 2012 are worth downloading, there is quite a lot of management discussion.. Net bank debt has fallen from 200 to 183 million, they generated 34 million in net cash up from 4 million, spent 7 million on land and most of the rest on reducing debt, Financing costs didn't fall much, I may try to dig deeper. They say they are in an "excellent position to generate cash this year". Net assets are up from 52 to 56 million, the unrealised value in the land bank, not included in the NAV is 44 million. Bank facilities run till 31 Mar 2014. That could be a crucial date.

Morris "shareholder bonds" in their accounts (page 29) yielding 5%, I think QYM have 4.2 million( From QYM accounts)

HTH, I'm off for a few days

cheers
steve

[joan of arc] 05/10/2012 12:45

Steve, thanks for the update. Do you know how Morris's bottom line profit compares with the last few years. Also I think QYM get a divi from them but I can't remember what it's worth per QYM share.

[stevie blunder] 05/10/2012 07:56

Wilmslow-based Morris Homes reported an 11% increase in revenue for the year ended 31 March 2012. The privately owned company turned over £150.4m, up from £136m in 2011.
Operating profit was also up by around 10%, to £23.5m compared to £21.6m last year. Average selling price rose 5% and operating margin was 16%, the same as last year.
Mike Gaskell, managing director, said: "Against a difficult economic background the housing market was remarkably resilient throughout 2011 with Morris continuing to benefit from its strategy of building high quality family homes in areas of strong underlying demand.
"With a 95% customer approval rating the company was again awarded the maximum five stars in the government backed Home Purchaser Satisfaction Survey. We also continued to top the NHBC's reportable items league for its UK's top 25 housebuilders and won more NHBC Pride In the Job awards for our size than any other UK housebuilder."
Since the financial year ended, the company enjoyed summer reservations 17% ahead of the same period last year and prices 2% ahead.
Morris said it would start selling at 15 sites in the next nine months.
------------------------


The problem with Morris is that they are working for the banks. Contrast the operating profits of 24 million with pretax of 3 million. They are running hard to stand still. But, if they can get the debt down, there is upside, the last accounts showed unrealised value in the land bank. Accounts to march 2012 have not yet been filed at companies house, but it will be interesting to see the balance sheet when they are, probably around the end of the calendar year.

Good to see that QYM are still buying back shares at mid price, makes any rise easier to trade than the market price makes it seem. But weird to see sales going through at market prices, folks aren't paying attention.

Cheers

steve

[makinbuks] 20/9/2012 10:18

Cash and investments = £5.86 per fully diluted share. At some point Morris will be revalued upwards and the advisory side will show a profit this year following the disposal and the strong start to the year indicated today. Potential for a 50% re-rating I would have thought

[stevie blunder] 03/1/2012 18:35

Double post

[stevie blunder] 03/1/2012 18:35

Tayside getting some serious funding:



25th November 2011 – Tayside Flow Technologies Limited ("TFT"), a Dundee-based vascular medical device company, announces the completion of a £4 million investment by a Guernsey-based Trust. The £4m investment is a combination of equity and debt, and will allow the Company to drive forward through its next phase of growth.
As a result of the funding, the Company is pleased to secure two new appointees to the Board of Directors. A new internationally experienced, medical device CEO has been identified who will be formally taking the reins in January 2012, and a new non-executive director will represent the interests of the Trust.
Brian Howlett will continue as non-Executive Chairman and Graeme Houston will be Medical Director. The strengthened Board has a breadth of relevant operational and strategic experience, and is well placed to drive the Company forward.
Brian Howlett said: "This significant new investment represents a very positive step forward for the company and will allow the management team to properly execute the business plan until 2013".
The new investor is backing the company based on the potential of its disruptive technology platform, spiral laminar flow (SLF). The primary aim is to commercialise fully the initial regulatory approved applications in the field of vascular surgical grafts. Discussions continue with other interested potential investors and industrial investors/strategic partners to boost further the company's commercialisation plans. Potential co-development or licensing of its SLF stent asset is also envisaged.
In addition to the new investment mentioned above, outstanding loans from existing shareholders including Braveheart Investment Group and Quayle Munro were converted in to equity. New investors from the Equity Gap syndicate, management and a number of individual investors were also granted shares in respect of subscriptions to a bridge round which raised £442k earlier in the year.


Gives them 2 years funding. The new investor must have faith in the products, but it looks like QYM are diluted. Can't tell how much without more detail of the holdings and the loan conversions. Any return would be good as the investment is written off in the balance sheet. Hopefully a sale or flotation in the next 2 years.

Aortech have a co-development project with an unnamed company for an AV fistula, suspect it could be Tayside, but only guessing.

[stevie blunder] 15/12/2011 09:07

".. the Directors confirm that, as and when appropriate, they intend to make further market purchases of Ordinary Shares on behalf of the Company in accordance with the authority granted by shareholders at the Annual General Meeting in November 2011. Any shareholder who is considering taking advantage of the share buy-back programme is invited to contact their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000."

Looks like a formal version of their unofficial policy.

I guess if they are able to buy back at below NAV that will cancel the dilution caused by issuing shares below NAV as part of the exec bonus.

I have hopes of a decent set of interims as they advised Virgin on the Northern Rock acquisition

[stevie blunder] 25/9/2011 19:30

Morris Group results are available now at Companies House:



They only coast a quid and are worth a look I think. There is more management discussion than you usually get from a private company.

A few points I noted:

Debt up from 190 to 200 M£

NAV up to 52.7 M£

operating margin of 15.9% is pretty good

financing costs of 18.7 million against operating profits of 21.6 million is cutting things a bit fine

Net profit after tax of 1.3 million means a p/e valuation would not be very high

external valuation of land bank gives a surplus of 56 m£ underpinning future operating margins.

So pluses and minuses. They do seem very confident about the future, and I think they will do well if the economy doesn't go into a depression.

[stevie blunder] 20/9/2011 13:16

Good to see them stripping out the distorting effect of the bonus accrual over a number of years.

Good also that the advisory business is generating enough profits to justify its goodwill carrying value on the balance sheet.

Hope they increase the interim divi in March.

[makingheaps] 20/9/2011 12:28

I thought the finals were reasonably encouraging in terms of the improvement in the advisory business in the second half and the comments about current strong volumes. The figures for Morris were once again impressive and I think we are now valuing this investment very conservatively. The increased dividend too was welcome and would still be supportable from the performance of the advisory business at this level. I think we can now write off the other investments as more or less irrelevant.