Mallett Share Discussion Threads

[orinocor] 06/8/2013 19:00

You still don't get it baner. Why would anyone BUY an expensive antique through Mallet and why would anyone SELL an expensive antique to Mallet. Far better the buyers and sellers match up directly as they do on the online auction sites. The more expensive the item the bigger the saving. The Mallet business is dying off. It won't be around much longer because the business model is dead.

[rainmaker] 06/8/2013 14:29

Consolidated Balance Sheet
at 31 December 2012


2012 2011
GBP'000 GBP'000
Non-current assets
Property, plant and equipment 4,741 4,608
Investment in associate - -
Deferred tax - -
4,741 4,608
-------- --------
Current assets
Inventories 11,906 12,304
Trade and other receivables 3,302 5,200
Cash and cash equivalents 798 325

16,006 17,829

Assets in disposal groups classified
as held for sale 387 -

16,393 17,829
-------- --------

Total assets 21,134 22,437

[rainmaker] 06/8/2013 14:27

Hi Baner-although last valued at £2mln it's actually in the books for £387k-see latest accounts under current assets-assets to be sold.

regards

[baner] 06/8/2013 14:00

rainmaker

the book value of 49 CHS is ca £2m so assuming say £2.6m net of transaction COSTs (i am sure the Mallett team are spending a LOT on advice on this deal) there will maybe be a £0.5m book profit - for which i guess the NEDs will offer the management team a substantial bonus Before any dividend is presented to shareholders!other than that i totally agree with you: a 20p one off dividend would be reasonable to expect.

[rainmaker] 06/8/2013 13:07

Mallett(MAE)'s net debt at the year end 31 December was £700k and in the latest trading update in May the figure was broadly similiar so with the distributable reserves available, I don't see any reason why Mallett won't return capital from the sale of 49 Clapham High Street with an exceptional gain of £2.1mln/£2.6mln on a sale price of £2.5mln to £3mln or 18p to 22p a share.

AIMHO, DYOR

regards

[baner] 06/8/2013 12:48

you have a lot to learn Orinicor. a lot! Partridges geared themselves up in relation to a buy out and really could not afford to stay in business - entering a never-ending negative spiral. you should see their demise as a potential for Mallett, not a warning signal!

Mallett´s problem is not the business model - it is their excessive staff cost and total lack of entrepreneurship at the board level - whether executives or NEDs.

with a higher turnover and a better use of their infrastructure, Mallett could - and should - be turned into a highly profitable business - but that would certainly not be achieved by marketing masterpieces on eBay - what an absurd idea!

[orinocor] 06/8/2013 11:46

If you have a £1M item why sell it to Mallet??? They will give you £800K for it. Better for buyer and seller to do it through an auction site and split the difference. The buyer can pay a couple of antique experts a hundred quid each to authenticate it.

There is no place for an expensive middle man like Mallet where business is done increasingly online. Partridge Fine Arts were a strong brand and look what happened to them. Mallet will follow them soon.

[baner] 06/8/2013 10:29

Mallett has built up their very strong brand in this sector - creme de la creme clients - by selling objects worth even £1m and more - if you believe this can be done on the eBay site..........mon dieu, you are naive!

[orinocor] 06/8/2013 09:29

baner
again: How many £500K+ items do you think Mallet sell? Ridiculous. I just spent 60 seconds searching for antique furniture on ebay and the 1st page had an item with starting bid at £3250. So its not just low value stuff they market.

[baner] 06/8/2013 09:00

orinicor

again: you clearly have no clue of what mallett is doing in this sector - it is as far away from eBay as you can come and it is ridiculous to assume that £500k objects - where provenance, quality etc are of vital importance - would sell at eBay. yes, Mallett need to charge for their far too large overheads (they are however being slowly reduced) and yes, Mallett need to improve their presence on the internet as this is an excellent way to present objects/furniture - but this has absolutely nothing to do with the stuff marketed at eBay. nothing at all.

[orinocor] 05/8/2013 19:59

eBay is full of antiques baner. Try it. Why would anyone sell through the likes of Mallet who take a massive chunk. Crazy. Just think of the overheads they need to pay. That all goes on the price. Same with buying. Check the item online if you see it in a show-room.

[baner] 05/8/2013 17:08

"antiques" at eBay - you must be joking Orinocor!? you clearly have no understanding of this type of business - do you expect for example the V&A to buy objects on eBay ?

[orinocor] 05/8/2013 07:31

This business is going on-line and I very much doubt if Mallet can survive the switch. Look what happened to Partridge Fine Arts. Anyone looking for antiques will try places like eBay first and the other auction sites.

[rainmaker] 04/8/2013 12:35

For all those that have contacted me to ask for ideas, here's just one for further research.



Mallett(MAE) currently 80p bid, 83p offered with a market cap of just £11.2mln IMHO has been severely undervalued for at least 2/3 years with activity in it's main antiques business yet to really recover from a sharp downturn with credit crunch in Autumn 2008 when turnover dropped 43%.It's a cyclical business which since stabilised but there are strong indications that the upturn is back with vengeance-see Mallett's returns at Masterpiece last year which were their best returns for any exhibition this side of the millennium and excellent trading reported in the May trading update for it's New York showroom. In recent years Mallett has more than halved it's operating costs in London, to less than £600k, by relocating to nearby Dover Street and gaining additional space at no cost(from 9k sf to 11k sf).Meanwhile industry changes in the demise of two major competitors, John Hobbs and Partridge Fine Arts, in 2009 have increased their market share and strengthened their bargaining power at the very top end of the market in which they dominate.Current turnover is some £4mln and £7mln below long term averages and the cyclical peak in 2006, respectively. In recent years the Company has embarked upon a strong marketing drive in China, now the worlds largest market, with the appointment of a Hong Kong based representative, exhibiting at Fine Arts Asia etc.

I think Mallett is a prime example of market inefficiency and why Private Investors whilst searching for substantial undervaluations are best advised to direct their efforts towards smaller caps with outstanding value. Sometimes "Mr Market" is neither in a good or bad mood but simply caught asleep at the wheel.The one Broker covering this share gives an estimate for the current year of a paltry £60k for the current year when the sale of a Property will give rise to an exceptional profit of +£2mln! Leaving aside other positive factors and a valuable 23.75% stake they own in Masterpiece, the UK's leading Arts, Antiques and Design exhibition, we should expect to hear news of the sale of freehold property at 49 Clapham High Street as the Company stated in it's 17 May trading update "We hope to conclude those discussions shortly and will update the market on the position at that time."

49 CHS which Mallett bought in December 2006 for £1.7mln was last valued at £2mln. However the value of their Property is in Mallett's books for just £367k(see assets held for sale under current assets in their balance sheet) so any sale price realised over and above that price will give rise to an exceptional profit.Mallett have had a planning application for change of use and the building of seven luxury flats, approved.

Clearly having the planning application approved enhances the value of this freehold property as Mallett have stated so we can expect sales proceeds of at least £2mln. However cross checking the details in the planning application with similiar properties advertised locally suggests, once redeveloped a aggregate selling price of some £4.4mln. Building in a cost of a conversion and a Developer's margin into my calculations,I expect the sale to fetch between £2.5mln to £3mln or circa 20p a share v the current price of 81.5p.Clearly Mallett have no obligation to pay this whole amount as special dividend but since they will make a profit for the year as a whole at the very least I expect a dividend declaration with the interim results.

Expect Mallett's interims to be released this coming week.

AIMHO, DYOR etc

regards

[rainmaker] 07/7/2013 10:10

With the sale of 49 Clapham High Street, I don't see any way the Company can't pay a dividend with the interim results in August whether it be a special or ordinary dividend.

regards

[rainmaker] 04/7/2013 13:18

The 6 day Masterpiece Art, Antiques and Design exhibition in Chelsea, London closed yesterday with the exhibition reporting a 20% increase in visitor numbers to 33,800. The designated charity raised £840k.

regards

[rainmaker] 01/7/2013 00:56

Not possible Playful, but I'll set up a new thread for anyone who wants to contact me to ask a question or make a comment and I'll respond by private messaging. I'll put a link in later.

best wishes

[rainmaker] 01/7/2013 00:52

Thanks Callum, nice to hear from you. I like to give full commitment and extensive coverage, talk about a variety of aspects of Value Investing but unfortunately, that's no longer possible.With me, it's very much all or nothing.....I want to do things really well or not at all.I do loads of research on my holdings before I get involved and it's an ongoing effort as well.I'm going to post a final few messages on the Value thread as I want to talk a bit more about Howard Marks book "The Most Important Thing" in a bit more detail.

I think I've got a good handle on this Company and I wholeheartedly agree its an archetypal Value share misunderstood, neglected, overlooked and "off the map".


I don't think there's any doubt that generally the messages on the ADVFN threads are both civilised and respectful-I like that very much. If you read You Tube, the next time you listen to a track, everyone is intent in being thoroughly agressive,obnoxious and rude.

I don't know what to say about that Poster.Occassionally I don't have the patience for some People.Asprey withdrew as a Partner in Masterpiece and their £5000 of share capital were bought by the other Masterpiece Partners so instead of five Partners with 20% each there were now 4 with 23.75% each(as 5% went to exhibitions inspirational founder,Thomas Woodham-Smith), He was saying that Mallett's stake in the business was worth £5k.A few months later the exhibition announced an annual profit of some £270k. Enough said.

regards

[playful] 30/6/2013 23:34

I truly hope you continue to contribute RM as we can all make our own opinion and your thoughts are always welcome.

[callumross] 29/6/2013 23:48

Any reason why you are going to stop posting on this thread, Rainmaker? Sorry to hear that as you seem to have a fairly good handle on this company which generally slips below the radar of PI's. A fairly civilised thread too, which is increasingly rare on ADVFN. Only that orinocor guy seems to want to rubbish it.

[rainmaker] 29/6/2013 16:40

As yet no details of sales at this years Masterpiece event but a couple of useful links of some of the very top luxury items available although the Economist says"Certainly a number of dealers-newcomers and veterans-are reporting early strong sales."








I'd take issue with the Economist over the statement " This suggests that past talk of poor sales was not merely gossip" Last year at Masterpiece, Mallett had their best returns at ANY exhibition this side of the Millennium and they consistently show at all worlds biggest exhibitions, including the Daddy of them all, the 220 stand TEFAT exhibition held at Maastricht every march where six figure sales pass with hardly a mention.


regards

[rainmaker] 28/6/2013 19:27

Sorry Callum,we won't get a trading from Mallett update for the Company or the Masterpiece exhibition(in which they own 23.75%) until the interim results are released in the second week of August or thereabouts because of the close period BUT we can definitely expect articles in the specialist arts and antique press in the next few days about major sales ie who sold what and for how much which will be very useful in gauging the success of this year's event. I'm very comfortable with my holding with news expected on the sale of 49 Clapham High Street.

regards

[rainmaker] 28/6/2013 12:56

Good point DT, I work on the assumption that eveyone else has my IT capability ;-)

regards

[daytraders] 28/6/2013 12:51

or just highlight your name and chouse send message :)