Mallett Share Discussion Threads

[rainmaker] 13/7/2012 12:14

As yet I haven't been able to find any visitor numbers for Masterpiece but there was a recent number for the VIP preview of 5,175. However one thing I have found is an article stating that the Masterpiece Chairman, Philip Hewat-Japoor has said there is a waiting list 150 for stands at the exhibition-read the second paragraph. This year there were 166 exhibitors. I've also seen yet another article reporting strong sales of English furniture at this year's event which I'll try to dig up.edit-see penultimate paragraph of second article.








regards

[rainmaker] 13/7/2012 12:12

Another reason I think there'll be a 1p token dividend with the interims in August is the 40% vote against the directors renumeration report at the AGM and for that matter a 88% vote against the allotment of shares.

Mallett PLC ("Mallett")
2012 AGM Results
Mallett announces that at the Annual General Meeting held on 31(st) May 2012, resolutions 1, 2, 3, 5 and 6 were passed on a show of hands and resolution 4 was not passed on a show of hands.
The table below gives details of the proxy votes lodged with Mallett's registrar by 4:30 pm on 29(th) May 2012 (being the deadline for the submission of proxy votes) on the resolutions proposed at the Annual General Meeting. Shareholders holding a total of 8,594,967 ordinary shares made valid proxy appointments.

Resolution Total Votes Total Votes Total Votes
For * Against Withheld
(%) (%)
------------------------------------------- ------------ ------------ ------------
1. To receive and adopt the audited
accounts for 2011 8,591,967 0 3,000
100% 0%
------------------------------------------- ------------ ------------ ------------
2. To approve the Directors' Remuneration
Report 5,151,227 3,440,500 3,240
59.96% 40.04%
------------------------------------------- ------------ ------------ ------------
3. To re-appoint BDO LLP as auditors
and to authorise the directors
to fix their remuneration 8,591,967 0 3,000
100% 0%
------------------------------------------- ------------ ------------ ------------
4. To authorise the allotment of
shares 1,021,227 7,570,500 3,240
11.89% 88.11%
------------------------------------------- ------------ ------------ ------------
5. To authorise the Company to
make market purchases of ordinary
shares of 5p each in the capital
of the Company (Special Resolution) 8,590,027 1,940 3,000
99.98% 0.02%
------------------------------------------- ------------ ------------ ------------
6. To permit a general meeting
of the Company other than an annual
general meeting to be called on
not less than 14 clear day's notice
(Special Resolution) 8,590,267 1,700 3,000
99.98% 0.02%
------------------------------------------- ------------ ------------ ------------
* Includes discretionary votes

regards

[rainmaker] 13/7/2012 12:09

Studying the just published Masterpiece accounts for the year ending 30 September 2011 and note that turnover was £5.336 mln and pre tax profit of £521,689 on which ,thanks to a tax loss rolled forward on the inaugural 2009 event, they paid just £1,069 tax.That's a 9.76% pre tax margin which is quite incredible given that the exhibition is some 2/3 years away from realising it's full potential.

I expect turnover for the current year to be circa £6.6mln and given the positive characteristics of the business(high operational gearing, scalability,negative conversion cycle, lack of re-investment needs etc)IMHO it should definitely be valued at 4 times annual sales so on that basis, Mallett's stake is currently worth £6mln v a market cap of £11mln.IMHO a significant rerating coming soon. According to one exhibitor, Apter Fredericks another Partner in Masterpiece, Antique Furniture( one of Mallett's forte) has been in big demand this year.Given this and the fact that Mallett are enjoying a rent free first year at their new address, I expect them to pay a token 1p dividend with their interims in August.

regards

[rainmaker] 06/7/2012 13:36

I'm going to be searching on line for visitor numbers for this year's Masterpiece exhibition which closed on 4 July 2012. I expect between 34k and 37k up from 28k last year. Antiques Dealer Mallett(MAE)currently 78p bid, 82p offered are a 23.75% partner.IMHO their investment in Masterpiece is their intellectual property rights- the brand, knowledge base, archive history,contacts, trading relationships etc ie intangible assets rather than physical assets. As a service industry business there is very little in the way of fixed or current assets, there's no land,plant, property or machinery, no stock etc.

With Mallett trading at less than their net working capital-the last figure I saw was 87p but that doesn't include the £1.4mln net proceeds for the sale of their New Bond Street lease which was received after the year end) the business is in the price for nothing yet it made Mallett £84k last year and may make up to £212k for them this year.Next year is going to be very interesting and if Masterpiece is able to increase the number of stands to 200 up from around 166 this year then I estimate the whole business could make close to £2mln with Mallett getting close to £500k

I've just been notified that Masterpiece's accounts for the year ending 30 September 2011 have been filed and are available on line

regards

[rainmaker] 02/7/2012 14:14

I await the figures for Masterpiece with real interest for the general success of the exhibition although it's not going to make much difference to the overall profitability of the event-approximately 87% of the turnover is from Exhibitor stands rather than entrance tickets.If we get a further increase in visitors of 6,000 to 9,000 we can expect a further £120,00 to £180,000 increase in profits from ticket sales.

However IMHO the really interesting (big)question is the number of stands for next year's event.IMHO there's going to be a big increase in Mallett's share of the profits for this year's event, up from £84K to as much as £220k. I think Masterpiece did really well to increase the number of stands for this year's event from 152 in 2011 to 166-at the same time they were booking stands for this year's event-July to October the worlds financial markets were in turmoil.If they can increase the number of stands to 200 then the event is going to start and to continue to make big bucks for the Partner of which Mallett is one with a 23.75% holding.Let me dig up some figures to illustrate my point.

regards

[rainmaker] 02/7/2012 13:26

Visited Masterpiece yesterday, really enjoyed the exhibition-higly recommended and not to be missed. There was a tremendous variety of magnificent pieces.There loads of sold items so Exhibitors have done well. It was tremendously busy and there was a real buzz about the event.It closes tomorrow so hurry.

regards

[rainmaker] 15/6/2012 12:25

Great link below to a preview of the Masterpiece exhibition(in which Art and Antiques Dealer,Mallett are a 23.75% shareholder) which starts on 28 June.Mallett(MAE) currently 77p bid, 82p offered.

I've seen the published accounts for the exhibition on line for the sixteen months to 30 September 2010 which obviously includes the inaugural exhibition in June/July 2010.I'm awaiting further accounts for the year ending September 2011 and barring a y/e change since Companies have 9 months to file accounts, are due at any moment.

My initial thoughts are very positive-there is neglible use of tangible fixed assets and I reckon that this year's event,with the high operating leverage kicking in, will produce a profit of up to £925k so Mallett making up to £217k up from 84k.We read that the exhibition cost £5mln to stage but the cost of sales figure was just under £3mln with administrative expenses at just under £700k(remember there're for 16 months)

We should discover provisional figure when Mallett report their interim results for the six months to 30 June in August.






regards

[rainmaker] 10/6/2012 18:23

Absolutely Playful,it's ironic that the Investors Chronicle speak of unearthing hidden value in their latest "Bargain Portfolio" released in February, choose 23.75% shareholder,Mallett for inclusion but fail to even mention Masterpiece!Although Masterpiece is probably some 2/3 years away from realising it's full potential, it's superior business characteristics that make it an excellent business,can be recognised now.

Hopefully I should soon be able to obtain Masterpiece's accounts for the year ending September 2011 which should give me a good idea of the profitability of this years exhibition.The number of stands are already known at 166 possibly as high as 170 and I expect a further rise in visitors to at least 35,000 possibly as much as 37,000, worth an extra £140,000 to £180,000. Prior to the exhibition last year I predicted a 50% rise in visitors to 27,000-the actual figure was 28,000. I think the growth of visitor numbers for major new exhibitions are fairly predictable.I did a whole load of research on this subject eg Frieze Art Fair, held in Regents Park every October launched 2003 and figures are widely available.

Over the last couple of years the Mallett share price has compounded at 14% but that's nothing compared to what I'm convinced the share price will do over the next couple of years.Barring a double dip recession, I'm sure the Mallett share price will multi bag, in the order of five to 10 fold, maybe more.
I don't make such claims lightly or that often.


AIMHO, DYOR etc

regards

[playful] 10/6/2012 15:35

I feel certain our patience will be well rewarded once the market awakens to the future potential of the company, especially as already mention the Masterpiece side of the business.

[rainmaker] 02/6/2012 14:29

A link to Masterpiece accounts. Somewhat surprised to see this, as believed as a Partnership there wouldn't be any published accounts available.I'm going to check accounts and hope that the figures for the year to September 2011 are published soon-these figures were published at the end of June 2011.

These accounts are going to be important with regard to costs and turnover.

IMHO Masterpiece is unquestionably a great business that's currently in the Mallett share for nothing since Mallett current trades at less than it's minimum liquidation value and the business assets of Masterpiece are overwhelmingly of the intangible sort.

Masterpiece employs very little in the way of fixed assets, has very little of capital expenditure since predominantly the major cost is the £5mln it costs to stage the exhibition.As a business francise it has the ability to raise stand prices-note 11%+ rise between 2010 and 2011.Working capital requirements are non existent since the Company has a negative conversion cycle. Then there's the scalability of the business.

Now the business has reached critical mass, the Masterpiece's large operational gearing takes effect ie small changes in turnover have a dramatic effect on the profitability of this business.

regards

[rainmaker] 01/6/2012 19:43

Use following with some caution as figs seem slightly out of date, as Peter G announced he had raised his stake to 25.5% on 26 Jan. Nevertheless they give a reasonable idea of who's got what.




Mallett PLC - MAE.Add to PortfolioPrintGlossaryStock Profile PDFGet E-mail Alerts.OverviewChartShare PricePerformanceKey RatiosFinancialsBroker SentimentNewsOwnersDirectors.Owners is a feature of Morningstar Premium. To learn more, click here

Major Shareholders Shareholder Type Amount % Holding
Withers Trust Corp Ltd - 4,130,000 29.93
Peter Gyllenhammar - 3,439,500 24.92
Churchill Investments - 1,150,000 8.33
Stichting Value Partners - 676,000 4.90
Henderson Global Investors - 554,000 4.01
Mrs S Fenwick - 534,000 3.87
Share Incentive Plan - 466,042 3.38

[rainmaker] 01/6/2012 16:31

Looks like a lively AGM for Mallett-40% vote against the directors renumeration report. I very rarely attend but I would like to have gone.I would think PG voted against.

regards

[rainmaker] 24/5/2012 12:30

A couple of links to previews of the Masterpiece exhibition-






regards

[rainmaker] 14/5/2012 19:29

Steady drip of buys each day, maybe 3 or 4 purchases but nothing major. I think there are a few more People out there who have made up their mind about Mallett. Expect results to be out in the next few weeks.

regards

[rainmaker] 13/5/2012 14:04

A link to an update from the Investors Chronicle on their annual bargain portfolio released February.I bought a copy,it's the current issue 11 to 17 May so I'm surprised that it can be accessed on line and hasn't been locked.The portfolio is up 6% against a 3% drop in the market.

https://www.investorschronicle.co.uk/2012/05/08/comment/simon-thompson/small-cap-value-shares-worth-buying-WEx15dAR9THgGrDOc31ruM/article.html

They make a good point that Bloomsbury's German business sold for £3.6mln was heavily loss making.In the last trading update, I remember this business as the only one that disappointed as all other parts of the group were performing well.

Re Mallett there're clearly behind the curve, talking about the sale of the New Bond Street lease and the more than halving of the London rent bill and the discount to net assets.However no mention of the signs of an imminent cyclical upturn in the main decorative arts business, Mallett's efforts to capitalise on the burgeoning Chinese market now the worlds largest,the success and bright outlook of the Masterpiece exhibition,no mention of the proposed sale of restoration subsidiary, Hatfield's Property and the inevitable conclusion the business will move in-house,nothing about the £3.3mln inventory write down in 2009 and how it should be added back in when assessing the long term value of the business etc,etc,etc


Stamp and celebrity autograph Dealer, Stanley Gibbons(SGI)has performed best with a 26% rise to 228p. It isn't and wasn't a true bargain in the Ben Graham sense in February. I and a few others on this thread bought this share at 17p in early 2003 and it 15 bagged over the next 5 years.

[orinocor] 10/5/2012 14:47

The Mallet share price continues to defy reality despite real global fears of a crash again. This loss making business continues to have a sky high market capitalisation. Risks very much to the downside IMO.

[mgsmith] 27/4/2012 12:11

And yet PG has lots of new money to invest in small caps. Isn't that strange given he's so unsuccessful. PG has actually done very well in recent years. Take C21 to name but one. You also need to definitely work on your spelling.

[orinocor] 27/4/2012 10:54

Peter Gyllenhammar has not done well at all in recent years. He's been caught out buying very illiquid stakes in terrible businesses with no means of exit. Mallet is another one that he's stuck with.

We have renewed our £2.5m overdraft limit with Coutts & Co and we continue to target cash neutrality in the medium term.

Cash neutrality in the medium term? Is that the best shareholders have to look forward to in the next 3 years. In reality you can see it being a lot lot worse. What on earth is the point in holding onto these shares.

I would definetly be shorting this if there was any liquidity.

[mgsmith] 27/4/2012 09:55

Peter Gyllenhammar wouldn't agree with you. He increased his stake to over 25% in January. Its always worth looking at his stock selections as he has an excellent track record of picking up small cap recovery stocks at a good price and will have done DD on the stock too. He's not always right but usually is. Hence I'm in with a small stake.

[orinocor] 26/4/2012 21:55

If I held Id definetly be selling. I think the risks are very much to the downside at this very inflated price.

[orinocor] 26/4/2012 21:53

I can only see turnover continuing to decrease now Mallet have moved to cheaper premises.

[orinocor] 26/4/2012 21:49

Im very surprised more sellers haven't appeared at this over inflated price. Mallet is very overvalued for what is IMO a dying business. Revenues continue to decline and no sign at all the company can ever again make a profit. The Internet is the new market place and there is no place for expensive middle-men like Mallet.

[rainmaker] 26/4/2012 01:01

An article on the annual Masterpiece exhibition,in which Mallett own 23.75%, last year made £362k but is still in it's infancy(it started 2009)but nevertheless is growing rapidly. Last year there were 152 stands and there are room for 170 this year with the Antiques Gazette stating there will be around 166.IMHO a great business eg Masterpiece has a negative conversion cycle which means it collects cash from Exhibitors in October before spending the vast majority of it in staging the exhibition in late June/early July at a cost of £5mln-shame that interest rates are so low at the moment.

Looking at the growth in visitors in other major new exhibitions where available such as Frieze which started in 2003, I expect an additional 10,000 visitors this year (worth an extra £200k) and for the exhibition to make circa £1mln profit-remember that Masterpiece is highly operationally geared business ie that the vast majority of it's costs are fixed so even small increases in turnover have a dramatic effect on it's profitability.





regards

[orinocor] 19/4/2012 21:13

So operating loss was £0.8M. The saving on the lease is only £0.65M so that's not enough to stop the rot here.

Also the rent is cheaper at the new premises for a good reason. Expect lower footfall and lower sales.

Assets? Well if the value of the stock is written down, and this has to be a real danger, then even the net asset value discount could disappear.

Conclusion. No upside whatsoever here. Id be a seller if I held but I'm still interested and will watch for an entry point around 30p. Finally Id ignore the ramper on the other thread.