GKN Share Discussion Threads

[meanwhile] 02/4/2018 09:50

Sorcery,

Go to hxxps://www.melroseplc.net/
You will see 'Investors' along the top. Hover over it.
Full 2017 is under 'Financial highlights' and 2016 is under 'Reports'.

[sorcery] 01/4/2018 18:04

With respect to you, Headline Operating Profit should be what they pay taxes on (statutory). Anything else is bull.
Bit amateurish of Melrose not to put their 2017 full year results on their website don't you think?

Cant find your link easily to imvestors or a similar investors.

Looking at the balance sheet for Melrose 2016 full year accounts hxxps://www.melroseplc.net/media/1041/melrose-ar16.pdf, I see that on page 141 of the financial side, they don't even bother to state net tangible assets. Company refs has net tanglible assets of -15.7p per share for 2015, +136p for share for 2016 and -3.85p per share for 2017.

Maybe I am misinterpreting you but does any of this inspire confidence in the takeover?

Looks like a minnow taking on an adult trout or as Minerve succinctly puts it, GKN is buying GKN. Wish I knew who put up the dosh for this, the Chinese?

[meanwhile] 01/4/2018 17:36

Sorcery,

No, not to dress up MRO but to show their poor performance here with Nortek.
Data is from Melrose website >investors>reports>2016 annual report+ 2017 Interim report and >imvestors>financial highlights for full 2017 (get H2 by taking H1 from full year. They quote Headline Operating Profit as their chosen measure of performance.

[sorcery] 01/4/2018 17:27

Well MEANWHILE i don't know where you are getting your 2017 figures from, I have £131.1 million pre tax profit for H1 2017 of £131.1m, (ony £47.8m statutory), see hxxps://www.melroseplc.net/media/1039/melrose-interim-results-31-august-2017-final.pdf

2017 H2 full year profits are not yet available, see hxxps://www.melroseplc.net/investors/reports/

so I guess you must have inside info and quite possibly a motive to dress Melrose up.

GKN on the other hand for full year 2017, had sales of £10,409m turnover and pre tax profit of £568m.

I have no confidence in Melrose's ability to take on GKN given their vastly different sizes.

[meanwhile] 01/4/2018 16:31

Posted earlier today on MRO site.

"Here are some numbers, all taken from Melrose reports, annual, interim & a Nortek takeover Proposal from Melrose in July 2016.
These 2 sets of figures are Sales Revenue and Headline Operating Profit for various time periods for the Nortek part of Melrose.

For the last full year of Nortek, 2015, before the takeover :-
$2526.1M $220.1M
(£1943M £169.3M at a £/$ rate of 1.3, my choice for comparison purposes only)

For the 4 months, Sept-Dec incl. 2016
£642.9M £88.3M

For H1, 2017
£987.4M £146.8M

For H2, 2017
£885.8M £139.6M

The figures, as usual, speak for themselves but of course different people will arrive at different conclusions about what they believe these figures indicate. To me, these figures show that the improvement at Nortek was all achieved in the first 4 months and since then there's been little improvement. According to Melrose, this has been achieved by cost cutting and debt interest payment reductions.
Presumably the gains from 'nurturing', 'R&D' & 'other investment' are yet to come.

[minerve] 01/4/2018 13:30

GKN is buying GKN.

[sorcery] 01/4/2018 02:47

If you look at Melrose's balance sheet you will not be surprised to find there is no £8billion on it (in fact their tangible net asset value is negative). So where is the money coming from? Why is this rather essential piece of information missing? So who is buying GKN, cos it's not Melrose.

[meanwhile] 31/3/2018 16:53

Graham,
Except that there are various means for fixing the margin without a fire sale, and if a temporary fix only is required, there are even more.

[grahamburn] 31/3/2018 16:38

Surely "fixing the margin" (without a fire sale) should be welcomed by shareholders of any persuasion.

[minerve] 30/3/2018 20:15

Well, we now know! If the margin isn't quite right, call in Melrose. They'll fix anything for a few £100M.

[ayl30] 30/3/2018 20:12

So were Times, very scathing of GKN

[minerve] 30/3/2018 20:12

Working, yes!

I am sure everyone is having a fantastic time!

😂

[topvest] 30/3/2018 20:08

Yes, very difficult to understand the hate campaign against Melrose. Not sure they have ever done anything to warrant it. Good that they won and nice to see capitalism working as it should do!

[minerve] 30/3/2018 19:25

FT were pro-Melrose all the way through actually. It looks like they still are. ;)

[alphahunter] 30/3/2018 17:49

Excellent article in the FT about the incredible PR campaign against Melrose.
I'm glad Driveline is not getting sold off on the cheap to Dana Inc.

[topvest] 29/3/2018 20:18

The better management team won and rightly so. Welcome to Melrose!

[sharesoc] 29/3/2018 16:07

GKN are mentioned in our recent blog post here:

[meanwhile] 27/3/2018 17:24

Anyone want a photo of my wallet?

[grahamburn] 20/3/2018 12:01

The article linked earlier was actually quite pro-GKN had you bothered to read it.

I have been pro-GKN for many years, but have been disappointed by its management, especially in the last 8 months or so, where they have shown a lack of grip and policy.

As a long-term investor, I do consider the long-term issues which affect ALL stakeholders - because that is the only way to secure long-term benefits for all of them: whether shareholders, employees, customers and pensioners. If you ignore any of them, then the company will not meet its economic and social responsibilities. No one has queried why the GKN pension funds are in substantial deficit and have been for many years. That isn't down to Melrose - or perhaps you think it is.

Your posts (both here and on the Melrose thread) seem to concentrate solely on vague social responsibility issues which, though important, are not the whole story.

Confirmation bias is anyone's own worst enemy. So please try to be objective.

Indeed, you clearly haven't read widely (as any investor should do) because the majority of the UK press (and US) has been pro-GKN and pro-Dana (in spite of GKN's recent poor performance and Dana's long history of "issues").

Just to confirm my objective approach to the entire saga and to show that I do not exhibit confirmation bias, there's a lead news item in The Times today which provides balance to this thread - and might encourage some GKN shareholders, even if it doesn't change my own view that GKN have mishandled the current situation.

[minerve] 20/3/2018 10:40

grahamburn

If you are just starting to realise that The City isn't impartial and is biased, favoured, corrupt and failing, then I would suggest you end your time as an investor.

In reality these issues raised are nothing new and unique to GKN or Melrose and have happened all the time since the Buttonwood agreement.

Journalists, and you, do have an axe to grind and it has become very apparent during this saga.

Neither these journalists or you are impartial because all I have seen is generally pro-Melrose writings because it suits our UK form of crony capitalism and pro-Melrose postings from you.

If you are truly impartial start posting some pro-GKN articles. There are some out this morning. ;)

[grahamburn] 20/3/2018 10:17

Pension funds are supposed to be administered and run at arm's length (eg independently and in the interests of members rather than the company which supports that fund).

Now, that may apply in GKN's case (remember I have had an interest in both companies for many years so have believed in GKN as an investment over time). However, the information quoted from the article has not been apparent to me and, an independent and highly respected financial journalist who doesn't have an axe to grind (read the whole article), says that "it does not look good".

So, there may well be something to "get over", but that certainly doesn't apply to an impartial observer/investor.

[minerve] 20/3/2018 10:04

grahamburn

And on the other side you have Melrose with all their hedgy fund mates.

Get over it.

[grahamburn] 20/3/2018 09:51

Thoroughly well-researched and balanced lengthy article on the issues facing the two GKN pension funds and the effects of both potential outcomes to the bid.



I was, however, struck by the concluding two paragraphs which contained some information which has not emerged to date, so far as I am aware; namely:

The trustees appear to be favouring GKN. That could change in the next few days if they find the sweetened Melrose terms acceptable and tie it in to binding commitments. They need to be careful to be strictly neutral, evaluating each on its own merits. They shouldn’t be seen as over-cosy with the company, not least because they may have to build a relationship with Melrose executives in a few short weeks — if it wins.

It hasn’t helped the image of impartiality that GKN appoints and pays the chairmen of both pension schemes, nor that the chairmen are both ex-employees, nor that company-appointed trustees are in the majority. It is also unfortunate that Mercer, whatever its conflict-of-interest safeguards, has been allowed to advise both the company and the trustees. Who thought that was a good idea? The trustees have an unenviable task in having to weigh up complex proposals with many moving parts whilst armed with very limited weapons and only the foggiest of crystal balls. But the maxim “Always keep a-hold of nurse, for fear of finding something worse”, is not always the basis for good pension fund governance.

[bukko] 19/3/2018 23:36

Agreed Minerve. I retire from active investing in max. two years. Happy to retain GKN/DANA in portfolio though. The aero engines Division will be a fantastic business for many years imo. Fingers crossed. Otherwise new home(s)will be found.