Management Resource Solu... Share Discussion Threads

[master rsi] 08/3/2019 15:13

King Suarez

re - That's a much better post from you, finally (though I had read it before).
so it baffles me why you continue to argue against

Those figures were from earlier, believing their Profit before tax, but after the Interim disaster on the EPS the latest half figures 1.35c less than last year 1.43c converted at A$1.80 to £, it gives EPS of 0.75p, and the Update was for full Year of 2.6/3p. If everything goes like now EPS of 1.70p will be hard to reach.

You can see despite being undervalued, there is that uncertainty on believing on what the Directors do and say at the moment, plus the chance that Banks will only bring down the Interest Rates with a raise of capital of some form, in order to bring that fatal Debt down, I would insist on it if I was their Bank.
The Australian economy is going down, yes just like the rest of the world, that does not help to look ahead on the large growth that the company has managed lately.

Good luck with your investment, but I will wait till the debt is sorted.

[king suarez] 08/3/2019 14:34

Master RSI,

That's a much better post from you, finally (though I had read it before).

1) I agree the company used the wrong no. of shares in issue when calculating EPS
2) I also agree the company should be using profit after tax for EPS calculation
3) The tax rate charged was c10% due to a deferred tax asset (from prior years trading losses). Until this assets is used up, tax rate will be below 30%.

Your figures are probably more realistic than the EPS guidance given by the company, however, as you state yourself in your conclusion the company is still trading on an extremely low PE ratio - you also state that the company is "well undervalued" (at 5p) so it baffles me why you continue to argue against.....yourself?

Seems all we disagree with is the level of risk attributable to the debt, which I consider to be overstated massively (and probably the market disagrees), for reasons referred to already i.e robust cash flow (EBITDA). + largely secured against non-current assets.

Given this - is there anything left to discuss?

KS

[12bn] 08/3/2019 14:13

Half Year Financial Highlights*

-- Trading performance in line with expectations
-- Revenue up 3.6% to $34.8m (1H18: $33.6m)
-- Profit before Tax up 39.0% to $3.51m (1H18: $2.52m)
-- Basic EPS of 1.35c (1H18: 1.43c)
-- Debt restructuring progressing well with further announcement expected by the end of March 2019

* All references to dollars or $ relate to Australian dollars, the Group's presentational currency

Half Year Operational Highlights

-- Strong profit delivered at MRS Services Group ("MRSSG") through a continued focus on minimising operating costs and leveraging the Group's central processes

-- Bachmann Plant Hire ("BPH") produced a solid result despite extended rain periods during October to December

-- Construction progressing well and to budget on MRSSG buildings in the Hunter Valley purchased in FY18, with an anticipated completion in Q4 2019

Paul Brenton, CEO of MRS, commented:

"I am pleased to report that the first half of the Group's financial year has been another busy period with growth delivered across the business. This performance reflects the significant restructuring that has been executed within the MRS Group and the strength of the BPH and MRSSG businesses. The project pipeline for BPH remains steady for the foreseeable future and MRSSG remains focused on the low risk, hourly rate work in the Hunter Valley.

"The second half has started well and I look forward to updating shareholders on further progress later in the financial year. The outlook for the Group remains strong and the Board looks to the future with confidence."

Management will host a presentation for retail investors in London at the end of March/early April, details of which will be released via RNS once finalised.////// The future is bright here,sooner or later our seller will finish and then the share price will really rise.

[12bm] 08/3/2019 13:48

In a hole? unlike the ever so smart shareholders.

[lanarkian] 08/3/2019 13:44

I have to say that this share comes across as a real clunker. Sadly, I think that the time has come to take my loss and move on. I just do not see what the upside is in MRS.

[biggest bill] 08/3/2019 13:33

Master RSI, you really know how to make friends and influence people, don't you? A word of advice; when you are in a hole, stop digging.

[king suarez] 08/3/2019 13:32

"Here, here Ramping MRS on another stock thread AAZ....."

Ah AAZ, yes, another undervalued stock you might want to take a look at - thanks for highlighting it to others on this board :)

[king suarez] 08/3/2019 13:19

Alright, I'll bite. Let's dissect your post (as requested):

1) "not understand like .... maybe you do not understand why or too THICK to do so."

A gibberish sentence - so moving along...

2) "nobody understands your concept above for sure especially - 12bn -"

Speak for yourself. I think anyone with a finance/investment background can follow my posts. Nobody besides yourself has requested clarification - perhaps state what is it that YOU do not understand? (I did provide the link from investopedia).

3) "We are talking about having a larger DEBT and lower market cap, when going cap in hand to the banks, for any formula to GET it down"

OK...

4) "Company will have a problem in raising capital, in any form or way apart from paying through the sky"

Historically, I would agree with this statement (when the company was loss making) hence the current relatively high interest rate on the debt. All indications from the company at present are that steps are being made to re-negotiate terms for the debt. I take that to mean a reduction in the current interest rate (otherwise why bother?) you may disagree....

5) "( no placing but RI at 2p ?)"

Pure speculation so best to ignore this statement...

6) "because the market does not like the situation the company is IN despite your assurances that is OK ."

So your assertion is, again, that due the company being currently undervalued on the stock exchange (market cap to earnings ratio) despite 'ability to pay' being more pertinent to a lender of finance. Most of MRS debt is secured against assets (plant/equipment etc) which, although not being fully valued by 'the market' is reflect on the balance sheet valuation (which lenders were obviously happy to accept at the time) and hence part of the 'shareholders equity' figure, which is in my forumla above - and why I am using that as a relevant ratio - instead of the one you posited (which wasn't actually a forumla?)

7) "Waste of time and space, the accounts clearly showing big loses 2017 to profits 2018 after acquisition paid with debt and shares from the Directors and employees later ."

Actually, in 2018, assets were aquired largely through organic cash flow - see cash flow statement - net cashflow from operating activities CAD $11,937k > net purchase of non-current assets CAD $10,654k. Value of non-current assets on the balance sheet increased by $11,540k, whilst debt has increased by just $1,449k and the net proceeds of share issuance were $763k, so therefore a net increase in assets of $9,328k was achieved in year without the use of additional debt or equity. I therefore disagree with your statement.

8) "The problem is how to get out from this point where the market does not believe the strategy that you are so happy to Approve."

What 'problem' exactly are you referring to? The one of being in debt? (which could be paid off in c18 months if CAPEX were put on hold) or the 'problem' of the company being undervalued by the market? Which, I would argue is more an opportunity if you are in investor...

9) "Maybe you can explain why the Share price is not only down the pavement but much further down on the GUTTER."

Probably any combination of a) Poor trading history prior to 2018(as you have pointed out) b) People awarded shares wanting to sell and cash in (as has been continually referenced by others) c) People such as yourself being wary of a company carrying debt with high interest rates (despite being evidently able to service the debt) d) General market jitters e) Resource stocks in general being undervalued and thus service companies related to said resources being out of favour e) The AIM market having a bad reputation f) Not long enough track record of having turned the business around (yet) hence people not wanting to take the risk that things continue on the current excellent trajectory?

Anything else you would like to discuss?

[12bn] 08/3/2019 13:15

MRS Property No1 Pty Ltd

During FY18, MRS Property No1 Pty Ltd purchased the land and the partially completed buildings from which MRSSG operates in the Hunter Valley for $3.0m. At the time of acquisition, the land and buildings had a valuation of $4.8m. The cost to complete the building is approximately $2.0m, which is fully funded through a construction facility. Construction is progressing well and to budget with an anticipated completion in Q4 2019. Management's estimated valuation of the completed facility is approximately $9.0m to $10.0m.

[master rsi] 08/3/2019 12:59

Here, here Ramping MRS on another stock thread AAZ.....

What it looks silly is the 2.6/3p that they will never do especially after last Interim of EPS of 0.75p.


King Suarez - 17 Jan 2019 - 10:36:07 - 3442 of 5042 Wanobi & AAZ - AAZ
Any thoughts on MRS - share price about 4.5p, just released half year update confirming on track for 2.6-3p EPS for FY2019 - looks silly cheap?

[master rsi] 08/3/2019 12:28

King Suarez

not understand like .... maybe you do not understand why or too THICK to do so.

nobody understands your concept above for sure especially - 12bn -

We are talking about having a larger DEBT and lower market cap, when going cap in hand to the banks, for any formula to GET it down, Company will have a problem in raising capital, in any form or way apart from paying through the sky ( no placing but RI at 2p or converitble loan notes?) because the market does not like the situation the company is IN despite your assurances that is OK .

Waste of time and space, the accounts clearly showing big loses 2017 to profits 2018
after acquisition paid with debt and shares from the Directors and employees later .

The problem is how to get out from this point where the market does not believe the strategy that you are so happy to Approve.

Maybe you can explain why the Share price is not only down the pavement but much further down on the GUTTER.

NOTE :
What I do know there is a "B@stard" around here copying and pasting post from here to another place LSE ( oldandtired ) UP yours old sod

[king suarez] 08/3/2019 10:53

I'd advise you to stick to charting and stop trying to talk about accounting/financial/business concepts that you clearly don't understand :)

[master rsi] 08/3/2019 10:41

STOP IT

you are behaving like the Directors of MRS, taking the company down the P!SS road for some time now.

[king suarez] 08/3/2019 09:44

Master RSI,

Re: your post 805 - this is disingenuous - the actual definition is as follows:

Total debt to capitalisation = (short + long term debt) / (short + long term debt + shareholders equity)

For MRS as at 31.6.18 = (16,025 + 4,522) / (16,025 + 4,522 + 10,277)

= a ratio of 66%

This has improved markedly from 31.6.17:

For MRS as at 31.6.17 = (11,127 + 7,971) / (11,127 + 7,971 + 3,722)

= a ratio of 84%

Note the above has NOTHING to do with the share price (market cap) - it is based on the balance sheet (financial fundamentals) values of debt and shareholders equity.

hxxps://www.investopedia.com/terms/t/total-debttocapitalization-ratio.asp

The above demonstrates an improvement in debt/capitalisation ratio from 84% down to 66% in one year - demonstrating the improvement in the position of the business.

Try again? (or maybe not).

KS

[thehitman1] 08/3/2019 09:04

Lol, both blind as a bat.Get some glasses.

[12bn] 08/3/2019 08:19

apfindley7 Mar '19 - 01:28 - 790 of 815
0 3 0
How does the market cap affect debt???

Thats one of the most ridiculous statements I've heard in a very long time. Earnings are what determines how a debt can be repaid.

Sorry, I cant even reply properly as I'm laughing so much at what you wrote.////// Here is your post apfindley and YOU WERE LAUGHING,it is YOU WHO SHOULD LEARN TO READ PROPERLY.

[apfindley] 08/3/2019 08:12

Don't bring me into your childish little spat 12bn.People make or lose money on their OWN decisions. MasterRsi was the one who was laughing. Learn to read properly.!!

[truffle1] 08/3/2019 07:57

I lost money on MRS, thanks to 12bn.

[thehitman1] 08/3/2019 07:54

Lol, 0.000000012iq, I do not follow anyone. It is you who followed me into KOD, I bought KOD at 0.22 and sold at 0.36. You bought KOD at 0.38, sold at 0.27 and you say you made profit and we should take you seriously.