Mallett Share Discussion Threads

[rainmaker] 09/11/2011 17:09

Ain't life beautiful, a 50% reduction on Mallett's £1.2mln annual rent bill so a saving of £600k a year.I don't know why People expected an upfront charge for the new address as far as I'm aware that's fairly unique to New Bond Street(it's so incredibly expensive I really think there're the only street that could get away with that)

I've done the calculation previously-the gain in excess of the carrying value and if I remember correctly, it will take net working capital to 89p a share. Obviously there will be renovation/refurbishment costs which will also need to be taken into account,as it's not although they're just popping out to their local Homebase for a few rolls of wallpaper and some paint!

Interim management statement expected this or next week (I believe released 15 September last year) and look out for news of their first ever showing in the Far East, in an exhibition in Hong Kong early October and news from Masterpiece-I expect them to increase stand prices by another 11%. Of course, the interim statement won't reveal this information but I believe they will announce an increase in the number of exhibitors for 2012. It's going to interesting to see to what extent the recent turbulence in financial markets has affected this business but with a reported three hundred applications for this year's 152 places, there must surely be another 30-50 exhibitors booked for next year.




TIDMMAE

RNS Number : 7700R

Mallett PLC

09 November 2011

Mallett PLC

Property move

Following the announcement made on 29 June 2011, Mallett PLC ("Mallett" or the "Company") is pleased to announce that it has received consent from the landlord of its London premises, 141 New Bond Street, to assign its lease to Fendi UK Limited. The assignment is therefore now unconditional and is expected to complete on 23(rd) February 2012.

Mallett is also pleased to announce that it has agreed a new 15 year lease to occupy the whole of Ely House, 37 Dover Street, London W1 as its new London showroom. Ely House is an 18(th) Century townhouse of grand scale with impressive rooms. It was built between 1772 and 1776 for the Bishop of Ely by the renowned architect Robert Taylor (1714-1788) and was described as "one of the best houses in London" by Country Life in 2002. The magnificent interiors retaining much of their original stucco decoration will make the ideal partner to the furniture and works of art that are the hallmark of Mallett.

The move will reduce the Company's London rental cost by over 50% and no upfront consideration will be payable to take on the lease. The terms of the new lease include a one year rent free period from November 2011 and the Company will undertake a certain amount of refurbishment work on the new premises before moving in on or before 23(rd) February 2012.

For further information please contact:

Mallet Plc 020 7499 7411
Giles Hutchinson Smith, Chief Executive

Michael Smyth-Osbourne, Finance Director

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCLLFLILALAIIL

[dugganjoe] 04/11/2011 08:03

I heard that the head of Hatfields has walked the plank

[orinocor] 17/10/2011 11:36

Cheaper location usually translates to lower sales.

[orinocor] 17/10/2011 11:31

Rainmaker posted this on the other thread.

Masterpiece Annual Exhibition in which Mallett hold a 23.75% stake, unquestionably a huge success with the number of stands increasing from 116 to 152,despite an 11% increase in psm stand prices, and visitors from 18,000 to 28,000,a 55% increase but the exhibition is yet to make much of a commercial impression since it made £270,000 profit with Mallett's share £64,000.

Although there has not been an announcement to the effect, it appears that each of the four Partners have given the managing director and mastermind behind the event, Thomas Woodham-Smith, 1.25% to give him a stake of 5%.He's earnt it yet the financial results for this exhibition are disappointing and working from 2010 figures,it seems that £700k of costs have been added somewhere. I feel there are two possible reasons for this, firstly the Organisers are unable to control costs and secondly,and IMHO far more plausible, that the event was far more expensive to stage this year because of it's new location, in the grounds Chelsea Hospital rather than Chealsea Barracks. I vaguely remember there were problems with planning permission(and I believe Prince Charles became involved) but the good news is that next year's event with revert back to CB.

[rainmaker] 06/10/2011 12:42

See fourth paragraph of this article from The Economist for figure of 300 applications for exhibition stands for this year's show-





regards

[rainmaker] 06/10/2011 02:08

Re Mallett-As promised a first summary and comment on International Antique Dealer,Mallett(MAE)'s interim results released on 11 August 2011 for the six months to 30 June 2011.
Selected highlights
Antiques-approximately 90% of their business-operating loss reduced to just £300k, turnover down 11% but gross margins improved 6% as a result of further cost cutting and highly selective buying in the wake of September 2008 banking crisis. Net debt reduced by £400k to £300k.Value of Stock down slightly to £11.8mln from £12.1mln but it should not go unremarked that Mallett wrote down the value of their stock by 17% or approximately £3.1mln in 2009 and could potentially upwardly revalue up to this amount if prices have recovered from the dark days of 2008/09 as these results suggest.

There is a non current asset held for sale on balance sheet for £225k. This item is the sale of their New Bond Street showroom lease and a sale to Fendi for £1.7mln was agreed in June and expected to be finalised in Jan 2012. Once concluded this will give rise to an exceptional profit(in excess of book value) of £1.445mln.

Mallett have identified a new address and are currently in advance discussions with it's landlord for a smaller showroom in a lower rent street elsewhere in Mayfair,it's exact location has not been divulged.However there will be substantial cost savings on their current £1.2mln New Bond Street annual rent.Conservatively I would estimate this saving to be in the region of £600k pa since NBS is one of the worlds highest rent streets along with the like of Madison Avenue, The Causeway, Hong Kong etc


Net Working Capital decreased slightly from £10.78 to £10.50mln and tangible net assets fom £15.0mln to £14.50mln. However include the net proceeds from the sale of lease and net working capital and net assets rise to £12.22mln(88.6p) and £15.72mln(114p)respectively.

Current market cap is £9.04mln at mid price of 65.5p.

Meta(modern Art division)made an astonishing £199k profit on turnover of just £362k. There is clearly potential for a solid profits contribution from this business.

Masterpiece Annual Exhibition in which Mallett hold a 23.75% stake, unquestionably a huge success with the number of stands increasing from 116 to 152,despite an 11% increase in psm stand prices, and visitors from 18,000 to 28,000,a 55% increase but the exhibition is yet to make much of a commercial impression since it made £270,000 profit with Mallett's share £64,000.

Although there has not been an announcement to the effect, it appears that each of the four Partners have given the managing director and mastermind behind the event, Thomas Woodham-Smith, 1.25% to give him a stake of 5%.He's earnt it yet the financial results for this exhibition are disappointing and working from 2010 figures,it seems that £700k of costs have been added somewhere. I feel there are two possible reasons for this, firstly the Organisers are unable to control costs and secondly,and IMHO far more plausible, that the event was far more expensive to stage this year because of it's new location, in the grounds Chelsea Hospital rather than Chealsea Barracks. I vaguely remember there were problems with planning permission(and I believe Prince Charles became involved) but the good news is that next year's event with revert back to CB.

In August, albeit at an early stage, Mallett said that the number of applications for next year's show is encouraging and I expect a further 11% increase in psm stand prices and perhaps a third increase in the number of exhibitors to bring the total to circa 200 since there were reportedly applications for 300 stands for this year's event-scource, The Economist-I'll post the article if anyone wishes. I estimate there will be an additional +£2mln of revenues at next year's show.As the cost structure is overwhelmingly of the fixed variety, rather than variable, I expect the vast majority of this figure to go straight to the bottom line.This exhibition apparently gained it's inspiration from TEFAT held in Maastricht, the worlds largest fine art and antique exhibition with some 280 Dealers so clearly there is enormous profit potential for Masterpiece and Mallett.I think Masterpiece has competitive advantages over TEFAT eg better transport links for one(there's a few others)

Mallett will be exhibiting at The Fine Art Asia Fair in Hong Kong this month hoping to tap into a burgeoning and potentially very lucrative market.

There's a big spread on this share -63p bid /68p offered but I believe that it may be possible to buy in good volume at 66.5p. This is thinly traded share but since I believe the move to a new showroom will practically eliminate trading losses I expect the share price to jump 15/20p on news of a much heralded cyclical upturn, when and if it comes.

All always DYOR as I have done mine, past performance is no guarantee future success, I believe the figures I have used are accurate but you need to check etc.

regards and wishing everyone every success with their investing.

[dugganjoe] 03/10/2011 07:53

Spoke to someone there. Looks like sales have really stalled recently. Even offering to bring sculptures in a bag to place of work to see if i want it.

Be very careful ahead of the trading update

[dugganjoe] 03/10/2011 07:52

Spoke to someone there. Looks like sales have really stalled recently. Even offering to bring sculptures in a bag to place of work to see if i want it.

[orinocor] 11/8/2011 07:52

Improved performance since last year.
Mallet's 25% share of Masterpiece profit was £64,000, thats £50,000 taxed. Im sure thats better than even the most optimistic shareholders expected except Rainmaker who anticipated masterpiece to make £1.4M profit. Oh dear. I hope no-one believes the guff on the other thread.


Rainmaker - 5 Aug'11 - 13:23 - 237 of 240

I've just seen a piece when it says the number of stands at this year's event was 159 not 150(see Masterpiece site) so taking away the 4 equal Partners that gives us 155 x £39,144.68=£6.067mln turnover just from stands.We now know that there were 28,000 visitors this year so add on £560k to get a total turnover of £6.627mln less the £5mln it costs to stage the event last year adjusted for a 4% increase in costs so £5.2mln.That's a £1.4 mln profit.

[orinocor] 08/8/2011 14:03

Hello everyone. This is very important as regards the Masterpiece Fair and what is in my opinion grossly misleading postings from a person calling himself Rainmkaer.

A typical stands size is 24 square meters and costs £20,000 + VAT. These are words from the organiser of the Fair.

Rainmaker is using £39,144.68 as the average stand price and bandishing about totally ridiculous calculations.

[rainmaker] 08/8/2011 13:59

IMHO all you need to know about Mallett is the following-

1)The highly cyclical nature of Mallett's antiques business

2)That Mallett and the Masterpiece exhibition, in which Mallett own 25%, are strong business franchises

3)The substantial margin of safety in Mallett at the current share price, protecting investors.

4) The growth rate and large margins of the Masterpiece business

Can't wait for the Mallett interims.

regards

[orinocor] 08/8/2011 13:51

He still cant explain why Asprey's, one of the founders, sold their 20% stake in Masterpiece for £5,000. He just chooses to ignores this critical piece of information instead.

[orinocor] 08/8/2011 13:50

Rainmaker - 5 Aug'11 - 13:23 - 237 of 239

I've just seen a piece when it says the number of stands at this year's event was 159 not 150(see Masterpiece site) so taking away the 4 equal Partners that gives us 155 x £39,144.68=£6.067mln turnover just from stands.We now know that there were 28,000 visitors this year so add on £560k to get a total turnover of £6.627mln less the £5mln it costs to stage the event last year adjusted for a 4% increase in costs so £5.2mln.That's a £1.4 mln profit.


Except a typical stands size is 24 square meters and costs £20,000 + VAT. See above post. Why is rainmaker using £39,144.68 as the average stand price?

[rainmaker] 08/8/2011 13:46

Admittedly a wide spread at 68/74p or 8.1% but despite last week financial meltdown the Mallett share price hasn't budged!

regards

[rainmaker] 05/8/2011 13:32

However hopefully Mallett will give news of an increase in the number of stands.


regards

[rainmaker] 05/8/2011 13:23

I've just seen a piece when it says the number of stands at this year's event was 159 not 150(see Masterpiece site) so taking away the 4 equal Partners that gives us 155 x £39,144.68=£6.067mln turnover just from stands.We now know that there were 28,000 visitors this year so add on £560k to get a total turnover of £6.627mln less the £5mln it costs to stage the event last year adjusted for a 4% increase in costs so £5.2mln.That's a £1.4 mln profit.

Of course my estimate of the average stand price is based on last year's 2010 figure, the very first year of the exhibition when lots of exhibitors just took the smallest stand to see how the exhibition went so it's a very conservative figure.

With 300 stand applications for this year's event so a 150 waiting list, I expect Masterpiece to continue to increase stand capacity and to raise stand prices by at least 11% each year.It's a scalable business with very little in the way of variable or additional costs with increased turnover(the marquee in which the exhibition is staged,expands to increase space) and Masterpiece could easily be valued now at 3/4 times annual turnover so £20mln to £26mln with Mallett's 25% stake worth £5mln to £6.5mln. Mallett's current market cap is just £10mln and expect it's antiques buiness to make £2mln+ once the much heralded cyclical upturn finally arrives.Within the last few weeks they announced the sale of their New Bond Street lease for £1.7mln allowing them to make substantial savings on their £1.2mln a year NBS rent by moving to a smaller premise in a lower rent street elsewhere in Mayfair. Mount Street, two streets away, for example rents are reportedly just one third of the hideously expensive NBS.

Mallett released their interims on 6 August last year so we should get results next week. I wouldn't expect a profit figure for the exhibition until applications for the 2012 event are closed probably in October.

regards

[orinocor] 03/8/2011 13:11

Lets not forget that 20% of the Masterpiece Fair was sold for £5,000.
Mallet have 25% of this Fair.

[orinocor] 03/8/2011 13:10

Woodham-Smith the ex-managing director of Mallet on the Masterpiece Fair

"The economics of it are mind-numbingly basic," explains Woodham-Smith. "Everything costs the organisers money. For example, we pay the caterers to be there, not the other way round, so they represent a cost to us. The entry tickets generate peanuts, and our sole real source of income is from renting out stands." Even so, at about £20,000 + VAT for the week, a typical 24-square-metre stand is far from expensive by industry standards. Result: last year was "significantly loss-making".

[orinocor] 02/8/2011 07:38

interview with Woodham-Smith the ex-managing director of Mallet

This brings us to the money side of things; and here there is a surprise in store, which also reveals the masterplan behind Masterpiece, so to speak.

"The economics of it are mind-numbingly basic," explains Woodham-Smith. "Everything costs the organisers money. For example, we pay the caterers to be there, not the other way round, so they represent a cost to us. The entry tickets generate peanuts, and our sole real source of income is from renting out stands." Even so, at about £20,000 + VAT for the week, a typical 24-square-metre stand is far from expensive by industry standards. Result: last year was "significantly loss-making".

Assuming that the first priority for any exhibition organiser is to make pots of money, I find myself scratching my head stupidly, until Woodham-Smith takes pity and spells it out. "We want the exhibitors to make money out of the fair. Maximisation of revenues for the backers is not the name of the game." And now we get to the point: "What really matters for our backers [of whom three out of four are themselves dealers] is injecting fresh life into London as an international hub, and having a forum in which to trade." So whilst they of course hope to see the fair in profit sooner rather than later, they are taking a long-term view.

[orinocor] 02/8/2011 07:37

interview with Woodham-Smith the ex-managing director of Mallet

By now, however, it was no longer possible to ignore an unwelcome trend in the art and antiques market. As Woodham-Smith recently said in the Art Newspaper, "the English country house has been sold up; it's gone." He expands on this. Between the end of World War II and the late 1980s, a fixture of the antiques trade was the country house sale season from April till June, when the entire contents of numerous statelies were sold off, with whole containers of stuff being shipped abroad. Most of what is left is now in public – not private – hands, and is therefore out of circulation. And not only has the supply shrunk drastically, but so has the demand, as a consequence of the changed needs of modern life.


The effect of all this on Woodham-Smith's area – antique furniture – has been woeful. "We are in a dying or substantially reduced market," he says. "The number of dealers who have disappeared is staggering."

[rainmaker] 02/8/2011 01:33

Thanks Daytraders-I'd already seen the article.I think it's a fair report.I can't disagree with anything he's said. Maybe he could have added more about annual cost savings of £2mln and £0.6mln in 2009 and 2010 respectively with as much as a further £800,000 to come from 1 January 2012 when they move from New Bond Street to another smaller and cheaper location elsewhere in Mayfair. I also think he could have tried to quantify the earnings power of Mallett's cyclical antiques business by highlighting current turnover v average turnover prior to 2008 so show that we can look forward to £3mln extra turnover under normal business conditions and perhaps as much as another £7mln under strong market conditions.However there is a big unknown yet positive factor in that Mallett aren't having to compete against two large rivals Partridge Fine Arts and John Hobbs for the first time in many,many decades.

I think what really matters is what he didn't mention-the annual Masterpiece exhibition, now in it's second year, in which Mallett hold a 25% stake.I would encourage the Author and everyone else to have a long hard look at the characteristics and operating performance of this business.(You can calculate it's turnover and profitability for published sources, if you know how) Study this Company and you will realise that it is a very strong business franchise with large margins and excellent growth prospects. Masterpiece is like any other business and it's value, is not dependant on how many days a year it's open or how long it's been going or how much was invested or how much it lost last year, but by it's current profitability and growth prospects.Masterpiece is a runaway success- looking at several factors,I expect an 50% approx rise in visitors to 27,000 this year's exhibition.I also conservatively see a £1mln profit on turnover of £6.2mln.The "market" is very slow to latch onto the success of Masterpiece and the implications for the Mallett share price.It's real "sleeper".When you have really studied this business IMHO there is no way could you ever believe the "markets" are efficient ie that they reflect are publicly available information, period.



I personally have absolutely no doubt whatsoever that the performance of Masterpiece will cause the Mallett share price to multi bag over the next 2/3 years as it continues to raise stand prices and add exhibitors. I'll try to post my research here in the next day or so. There is a trading update from Mallett due soon, probably next week, so I'll try my best to post everything before then.

regards