Management Resource Solu... Share Discussion Threads

[depjoe] 28/2/2019 14:44

thanks for the new thread dave4545 I will be your first poster here as well.

[tinker10] 28/2/2019 14:17

Depreciation starts hitting the P&L from the day of the purchase. Therefore profit is already being affected by capital purchases. If the assets are fully depreciated before the opportunity arises it is not a problem, as long as the assets are still in a useful condition and replacements aren't required.

If the estimate of plants useful life is cautious, it will actually have more impact on the bottom line in the years to come, as the cost of the asset will be depreciated in a shorter space of time.

[12bn] 28/2/2019 13:29

This will come good,fundamentals always out and fundamentals are great.

[gnnmartin] 28/2/2019 13:16

I reckon the unknown here is whether the depreciation is appropriate. They are buying lots of equipment. If the equipment goes on being useful until the cost has been amortised then the shares are indeed undervalued. Hopefully the estimate of useful life is cautious: if so then the shares are very undervalued. If the equipment is bought with an opportunity in mind, but the opportunity does not last until the equipment is fully depreciated, then the profit and the share price could plunge.

Looking at the annual report the rate of depreciation is not clear (well, to me anyhow). I hope I will get to the meeting promised in London to discuss the interims and if so get a better hold on depreciation.

[dave4545] 28/2/2019 13:09

!FOLLOWFEED


@MRSLimited on twitter

[apfindley] 28/2/2019 12:12

Anyway, the results are good.Debt restructuring is key to rerating here, but the halfway results are very worthy of a reratings. The numbers are solid. The company is profitable and highly undervalued.

[depjoe] 28/2/2019 11:34

Be very careful with dave4545 I have rumbled his game. Buy quietly, ramp on twitter and here then quietly sell without posting when he is selling dave4545 has revealed. His words "gently offload"
Just another pump and dump trader not the investor he wants you to think.
Gently offload without posting leaving others high and dry.

dave4545
27 Feb '19 - 10:12 - 112 of 114
0 0 0
depjoe filtered.

"you've rumbled me"

What for having a twitter account. 99% of all traders/investors have twitter accounts too.

I buy size in bombed out small caps and when they recover I gently offload.

Nothing to hide.

[yasx] 28/2/2019 11:33

The reality is (as I explained on here months ago), that not many are interested in investing in a Co with Zorbas at the helm.

[dave4545] 28/2/2019 11:21

£9 mil cap £4 mil profits and totally friendless again...

[dave4545] 28/2/2019 10:14

The mm's are going to shake the hell out of this and they normally win. They are looking for bigger fish to give up and sell out at lows.

[troutisout] 28/2/2019 09:52

Danny Baker,

They have also invested millions from free cash flow, so the placing doesn't have to account for the debt repayments made, it could easily have gone on capex as stated, they bought two large machines shortly afterwards.

They have made it clear they are amortising loans at a rate of $400k per month and this figure roughly stacks up with the figures published today. I am sure that there will have been another $800k reduction since the Interim period, but may have seen more of the construction loan drawn down.

Cutting the interest bill is an ongoing aim and one they have told us today will be announced before the end of next month.

The balance sheet is standing still because they are investing back into the business to grow it, The shed, construction works on the shed have all increased the debt figure, but I am happy with that as that will improve the business, it's capabilities and finances for the future.

[unionhall] 28/2/2019 09:40

...and also a reduction in the Capital spend in Property, Plant and Equipment.

They have spent AU$16.5m on PP&E in the last 12 months.....


Necessary I'm sure but hopefully the spend rate will decline soon.

[danny baker] 28/2/2019 09:10

Troutisout, the reduction in debt of $2 million is largely accounted for by the receipt from the placing with management and employees in July 2018 of around the same amount. The key to this company generating free cash in the future is to cut the interest bill. At the moment they are running hard but the balance sheet is standing still.

[thehitman1] 28/2/2019 09:05

Lol, tit.Good news for mrs, 10p on.

[dave4545] 28/2/2019 08:11

Trying a shake trout although saying that you can buy around 4.75p mid price

Not many people taking the bait and selling this low.

I'm happy to hold now

[troutisout] 28/2/2019 08:09

So debt has reduced $600k in the first half and this against the new loan of $1,450k which is being used for the construction works at the shed. So in effect historical like for like debt has reduced $2m in H1.

All looks good with the restructuring news due by the end of March....

That shareholder list, how accurate is that really?

[12bn] 28/2/2019 08:04

My fault truffle1,I forced you to invest your £500 life savings with physical threats and the use of a thumb screw and the rack.

[danny baker] 28/2/2019 08:03

Presumably the promised debt restructuring will be along the lines of a long-term loan and revolving credit facility to replace the expensive asset and debtor financing. This would reduce the interest bill and give the business more flexibility in how it invests in replacement equipment. At least we know it won't be issuing any new equity because it doesn't have the authority. Everything looks rosy for once!!

[truffle1] 28/2/2019 08:01

Hopefully I wouldn't have to wait till end of 2019 to get my money back. This has been a very stressing experience, all thanks to 12bn.

[12bn] 28/2/2019 07:56

This will re-rate northwards sooner or later,patience and this will be a multi-bagger,imo.

[thehitman1] 28/2/2019 07:51

All looks good to me.

[bazildonbond] 28/2/2019 07:40

Depends, when and where, early April would be better!

[12bn] 28/2/2019 07:39

Management Resource Solutions PLC

28 February 2019

28 February 2019

Management Resource Solutions PLC

("MRS" the "Company" or the "Group")

Half Year Results

A solid first half with growth delivered across the business

Management Resource Solutions PLC, a leading Maintenance, Fabrication, Civil and Earthworks company, announces its Half Year Results for the six months ended 31 December 2018 ("1H19" or "half year").

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.

Enquiries:


Management Resource Solutions PLC via FTI Consulting
John Zorbas, Chairman Tel: [phone]
Paul Brenton, CEO
Tim Jones, Finance Director
Arden Partners plc (NOMAD & Broker) Tel: [phone]
Tom Price
Alex Penney
Maria Gomez de Olea
Fraser Marshall, Corporate Broking
FTI Consulting (Financial PR) Tel: [phone]
Alex Beagley
James Styles
Laura Saraby

Notes to Editors

Management Resource Solutions PLC (MRS), through its subsidiaries Bachmann Plant Hire and MRS Services Group, offers plant hire, equipment repair, refurbishment and fabrication, mine rehabilitation, earthmoving, road construction and other support services to a wide base of private and public sector clients in Australia. MRS caters predominately for the mining, civil engineering, construction and infrastructure industries.

Further information on the Company can be found at hxxp://www.mrsplc.info.

Chief Executive's Review

Bachmann Plant Hire Pty Ltd ("BPH")

Bachmann Plant Hire Pty Ltd is based in Ipswich, approximately 40km west of Brisbane (Queensland), and specialises in providing bulk earthworks to the construction and infrastructure sectors, generally throughout South East Queensland. BPH delivers wet hire services (plant is accompanied by operators) which is completed through either an hourly wet hire arrangement or performed at a bulk cubic metre rate, which is often referred to as contract work.

The Ipswich Economic Development Plan 2016 to 2031, enacted by the Queensland Government, is an ambitious plan to attract 292,000 people to 20 employment and population growth areas in the vicinity of Ipswich. More than 500 new residential dwellings are required to be completed every month to achieve the plan, resulting in the fastest growing residential growth corridor in Australia.

BPH has a 50-year history and an experienced workforce of long-term employees and is perfectly located to benefit from the current opportunities. The majority of BPH's contracts are based on bulk earthworks within a small, well defined area of a residential or commercial sub-division to a final level finish of +/- 50mm. Although operations can be hampered by excessive rainfall, overall BPH operates in a relatively low risk contracting environment. Whilst contracts are generally relatively short (two to six months in length), there is a steady pipeline of work for the foreseeable future.

BPH's 1H19 contribution was an Operating Profit of $1.5m (1H18: $1.8m) on revenue of $10.3m (1H17: $10.5m). The first half revenue and profit contribution is slightly lower than the comparative year due to extended rain periods during the October to December period.

MRS Services Group Pty Ltd ("MRSSG")

MRS Services Group Pty Ltd is strategically located in the heart of the coal mining region of the Hunter Valley in New South Wales, approximately 125km north west of the coal exporting port of Newcastle and approximately 240km north of Sydney. Some 90% of revenues are derived from blue chip mining companies including Yancoal, New Hope, BHP and Glencore. Demand for high quality coal (containing high energy content with low ash and pollutants) from the Hunter Valley remains strong, in particular for export to China and East Asia where over 1,000 new High Energy Low Emissions Ultra-Supercritical Coal Fired Power Stations are planned or under construction.

The majority of MRSSG's work in the Hunter Valley is low risk, derived from selling trade labour at hourly rates. The fabrication and mine rehabilitation businesses are based on longer-term contracts in well-established work relationships and well understood risk profiles.

MRSSG's 1H19 contribution was an Operating Profit of $4.0m (1H19: $2.8m) on revenue of A$24.5m (1H18: $23.3m). This strong profit performance was delivered through a continued focus on minimising MRSSG operating costs and leveraging the Group's central processes. This was helped by the reduction in distractions and unnecessary costs associated with the discontinued operations from FY17.

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.

Financial Review

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

The results for the half year ended 31 December 2018 are a net profit after tax of $2.6m (1H18: net profit after tax $2.5m) on revenue of $34.8m (1H18: $33.6m), reflecting the significant restructuring that has been executed within the MRS Group and the strength of the Bachmann Plant Hire and MRS Services Group businesses.

As a result, there is a significant change in the operational results compared to 1H18 as set out in the table below:


Profit and Loss 1H19 1H18
$'000 $'000

Operating Profit

* BPH 1,606 1,836

* MRSSG 3,984 2,812

* Overheads (974) (968)
----------------------- ------------------

Total Operating Profit 4,616 3,680

Interest (1,107) (1,156)
----------------------- ------------------

Profit before Tax 3,509 2,524

Tax (865) -
----------------------- ------------------

Net Profit after Tax 2,644 2,524
======================= ==================

Prior year tax losses only partially offset the 1H19 operating profit, the net result is a tax expense for 1H19 of $865k (1H18: Nil). Profit before tax in 1H19 was $3.51m which has increased $985k (39%) on the prior year comparative of $2.52m,

Property, Plant & Equipment

During 1H19, the Group invested $7.1m in Property, Plant & Equipment, with $1.7m in Capital Work In Progress. The majority of the capital expenditure (CAPEX) has been funded through free cash flow. New debt contributed $2.1m, with $0.7m equipment finance and $1.4m property and construction finance. During 1H19 the Company has continued to invest in CAPEX, extending the life of the capital equipment and supporting the Group's sustainable growth.

Cash and Borrowings

The cash balance of the MRS Group varies significantly on a day to day basis. The MRS Group utilises a Debtor finance facility, and only the cash required to service the business in the very short term (i.e. the next week) is drawn down through the debtor finance facility which minimises the interest cost to the business. The available capacity of the debtor finance facility at 31 December is $2.6m in addition to the closing cash balance at 31 December 2018 of $768k.

The restructure of the debt is progressing well and will be announced during Q3.

There are five current core debt facilities:

1) Debtor Finance - BPH has a $2.6m facility, and MRSSG has a $7.0m facility
2) Commercial Bills - The commercial bills were established with the restructure of the Group in FY17.

3) Equipment Finance -There are two equipment finance loans and the "Rent to buy" loan in BPH

4) Property Finance
5) Property Construction Finance
Current Trading and Outlook

The Directors believe the markets which BPH and MRSSG service continue to be strongest they have been in years and trading during the first half of our 2019 financial year has been in line with expectations. BPH is currently working close to full capacity and has a strong pipeline of work to complete. MRSSG is experiencing strong end market demand. The Hunter Valley thermal coal price has been strong and stable providing confidence for the coal mines to commit to repairs and maintenance.

1H19 has set up the MRS Group for another successful year and on behalf of the Board, I'd like to thank all employees for their continued commitment to working safely and to all stakeholders of MRS including our customers, suppliers, funders and shareholders for maintaining their support of the Company

On behalf of the board, I'd like to thank all employees for their continued commitment to working safely and to all stakeholders of MRS including employees, customers, suppliers, funders and shareholders for maintaining their support for the Company.




Paul Brenton

Chief Executive Officer

Consolidated Statement of Profit and Loss and Other Comprehensive Income for the period ended 31 December 2018


6 months ended 6 months ended Year ended
31 December 31 December
2018 2017 30 June 2018
(Unaudited) (Unaudited) (Audited)
Note $'000 $'000 $'000

Revenue 3 34,830 33,561 69,075
Cost of sales (21,223) (22,703) (45,969)
--------------- --------------- -------------
Gross profit 13,607 10,858 23,106

Recurring administrative
expenses (8,745) (7,018) (14,423)
--------------- --------------- -------------
Profit before non-recurring
costs and finance charges 4,862 3,840 8,683


Non-recurring administrative
expenses:
Share based payment charges (246) (160) (370)
Operating profit 4,616 3,680 8,313

Finance costs - interest (1,107) (1,156) (2,281)

Profit before tax 3,509 2,524 6,032

Tax expense (865) - (609)
--------------- --------------- -------------

Profit for the year attributable
to equity holders of the
parent company 2,644 2,524 5,423
=============== =============== =============

Earnings per share 2


Continuing Operations
Basic 1.35c 1.43c 3.02c
Diluted 1.18c 1.28c 2.62c

Consolidated Balance Sheet

as at 31 December 2018


As at As at As at
31 December 31 December
2018 2017 30 June 2018
(Unaudited) (Unaudited) (Audited)
Note $'000 $'000 $'000

Assets
Non-current assets
Property, plant and equipment 4 35,763 17,981 29,114
Deferred Tax 1,613 - 1,613
37,376 17,981 30,727
Current assets
Trade and other receivables 5 15,561 17,579 16,725
Cash and cash equivalents 768 2,172 50
Inventories 1,829 962 1,968
18,158 20,713 18,743

Total assets 55,534 38,694 49,470
------------ ------------ -------------

Liabilities
Current liabilities
Trade and other payables 6 17,664 13,899 16,125
Tax 522 (249) -
Borrowings 7 17,477 10,142 16,025
35,663 23,792 32,150
Non-current liabilities
Borrowings 7 2,491 7,597 4,522
Other non-current liabilities 365 314 2,521
Deferred tax 2,222 - -
5,078 7,911 7,043

Total liabilities 40,741 31,703 39,193
------------ ------------ -------------

Net assets 14,793 6,991 10,277
============ ============ =============

Equity attributable to
equity holders of the
parent
Share capital 39,061 38,810 38,840
Share premium 18,847 17,294 17,442
Issue costs reserve (332) (332) (332)
Reorganisation reserve (36,032) (36,032) (36,032)
Retained earnings (6,751) (12,749) (9,641)
------------ ------------ -------------

Total equity attributable
to equity holders of the
parent 14,793 6,991 10,277
============ ============ =============


Consolidated Statement of Changes in Equity

for the period ended 31 December 2018


Issue costs Reorganisation Retained
Share Capital Share Premium reserve reserve earnings Total equity
$'000 $'000 $'000 $'000 $'000 $'000

At 1 July 2017 38,711 16,808 (332) (36,032) (15,433) 3,722

Profit for the
period - - - - 2,524 2,524

Total comprehensive
income - - - - 2,524 2,524
-------------- -------------- ------------ --------------- ---------- -------------

Other Movements
Issue of Shares 99 486 - - - 585
Share based
payments charge - - - - 160 160
-------------- -------------- ------------ --------------- ---------- -------------

Total other
movements 99 486 - - 160 745

As at 31 December
2017 38,810 17,294 (332) (36,032) (12,749) 6,991
-------------- -------------- ------------ --------------- ---------- -------------

Profit for the
period - - - - 2,899 2,899

Total comprehensive
income - - - - 2,899 2,899
-------------- -------------- ------------ --------------- ---------- -------------

Other Movements
Issue of Shares 30 148 - - - 178
Share based
payments charge - - - - 209 209
-------------- -------------- ------------ --------------- ---------- -------------

Total other
movements 30 148 - - 209 387

As at 30 June
2018 38,840 17,442 (332) (36,032) (9,641) 10,277
-------------- -------------- ------------ --------------- ---------- -------------

Profit for the
period - - - - 2,645 2,645

Total comprehensive
income - - - - 2,645 2,645
-------------- -------------- ------------ --------------- ---------- -------------

Other Movements
Issue of Shares 221 1,405 - - - 1,626
Share based
payments charge - - - - 245 245
-------------- -------------- ------------ --------------- ---------- -------------

Total other
movements 221 1,405 - - 245 1,871

As at 31 December
2018 39,061 18,847 (332) (36,032) (6,751) 14,793
============== ============== ============ =============== ========== =============

Consolidated Statement of Cash Flow

for the period ended 31 December 2018


6 months ended 6 months ended Year ended
31 December 31 December
2018 2017 30 June 2018
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000

Cash flow from operating activities
Receipts from customers 35,640 31,392 77,741
Payments to suppliers and
employees (25,869) (26,467) (63,523)
Finance costs (1,106) (1,156) (2,281)
Tax paid - (121) -
--------------- --------------- -------------

Net cash flow from operating
activities 8,664 3,648 11,937
--------------- --------------- -------------


Cash flow from investing activities
Net purchase of non-current
assets (8,222) (2,399) (10,654)
--------------- --------------- -------------

Net cash flow from investing
activities (8,222) (2,399) (10,654)
--------------- --------------- -------------


Cash flow from financing activities
Net repayment of borrowings (1,493) (2,556) (5,038)
(Repayment)/proceeds from
debtor finance (105) 704 1,013
Proceeds from issue of shares
net of costs 1,872 746 763
--------------- --------------- -------------

Net cash flow from financing
activities 275 (1,106) (3,262)
--------------- --------------- -------------


Net increase/(decrease) in
cash held 718 143 (1,979)
Cash and cash equivalents
at beginning of the period 50 2,029 2,029
--------------- --------------- -------------

Cash and cash equivalents
at the end of the period 768 2,172 50
=============== =============== =============

Notes to the Consolidated Financial Statements for the period ended 31 December 2018

[danny baker] 28/2/2019 07:32

I hope 12bn, 12bm, bazildon, hitman and the others will all be going to the party, sorry results presentation in London next month. Chance to meet up.