Manganese Bronze Share Discussion Threads

[toffeeman] 10/7/2003 16:52

They are good deals, I presume done to satisfy JB (where are you JB?!!!)

They sell the component division and collect rent of £310k pa from the new owners.

They sell Cov and lease back the part they occupy for £375k pa for 5 years. The loss of rent from the Beamer dealer is offset by the lower interest charge.

If Matega get planning permission then they essentially pay MNGS to vacate based on a re-valuation of the site with planning permission. MNGS will get [Market value - (£5m+env clearing up to £450k)] *.25. So if the site with planning permission was valued at £12m and the costs of cleaning it were £300k then MNGS would get (12-5.3) *.25 = £1.7m

I think this is a smart deal because it removes the uncertainty over the planning application. The city council has repeatedly baulked at giving permission for more retail space and housing in that area would not be attractive.

I assume the 25p div is the price JB wanted for backing the deal = after all he'll pick up £2m of the special div.

This now clears the deck for a real crack at Zingo - it's sh1t or bust now!

[guru] 10/7/2003 16:48

mmmmm interesting point. They dont mention that this was the second asset transaction in the press release. Maybe you are right - there is more to come! Great day for me - Bought at lunchtime and made a cool 25% return in an afternoon! :-)

Mind you I was talking to myself all day!

Regards

Guru

[abcd1234] 10/7/2003 16:44

In this mornings announcement they referred to...:

"Manganese Bronze also said it is in talks on another "possible asset
transaction" but added that no final agreement has been reached...."

So is the one they snuck out just before close what they were referring to....or is there more in the pipeline?? Certainly the one this afternoon at 4.14pm (let alone this morning's) has a considerably positive impact on the bottom line!

[abcd1234] 10/7/2003 16:38

25p sounds pretty good to me!! .... :O)

[guru] 10/7/2003 16:37

Fantastic - what a play - 25p special dividend!

[abcd1234] 10/7/2003 16:36

It's that second disposal announced at 4.16pm this afternoon, adding an extra net profit of 2 mill

see the points from the RNS below......


* Proceeds of #8 million
* Pro-forma profit of #2 million
* Proposed special dividend of 25p per ordinary share
* Proceeds of disposal to further reduce debt, reduce pension fund deficit
and support Group growth strategy

[guru] 10/7/2003 16:27

Not sure whats going on but its gone up again. The mm's seem to have sucked in a few sales and then increased the price. I could only buy 500 online whereas the mm's were happy to take all my stock.

Any further thoughts toffeeman?

Regards

[toffeeman] 10/7/2003 15:46

Yeh - the silly s@d who sold 10 more than they owned yesterday and had to buy them back today!

Seriously though it's such a piddling stock that the MMs won't have factored in the news until some broker came on and asked to buy some stock - I assume the 5000 early on was from yesterday and the two piddling trades were too small for them to bother with.

Then they woke up and realised they could start shifting stock at higher prices.

Jamie must be pleased to see his recent buying in profit!!

- Note how he has been VERY quiet recently....

[guru] 10/7/2003 15:15

Hi Toffeeman,

You are probably right but I do think its odd that the share price shoots up 4 hours after the annoucement and since then there has been hardly any volume and the shares shoot up again. I also would have thought that the mm's would widen the spread if its illiquid but currently its 97-100p, quite a tight spread for a small market cap company with little float. Just my thoughts. Anyway, lets see what happens over the next few days.

Regards

Guru

ps - mind you it could be the buy of 10 shares at £1.00 which may have done it! ;-)

[toffeeman] 10/7/2003 15:01

Guru,

stay calm,

this stock moves greatly on bu@@er all volume because it's such an illiquid stock (JB owns 40%) and so there is very little free float and it's a tiny market cap. The point is that it can move down just as fast although 110 looks a key resistance level to break.

Basically the MMs who make the market don't know what the implication of the deal(s) is/are so they mark up the stock to see if anyone will trade at that level.

At 120 I would expect to see Richer offloading his remaining holding so I will (hopefully) be moving the stop up.

[guru] 10/7/2003 14:34

Up 15% now. Something is happening.

DYOR

Guru

[guru] 10/7/2003 13:58

Share price jumps up 8% at 12.58 - about 4 hours after the annoucement. Strange or what? Its as if something other than the annoucements this morning triggered a jump in price.

Some news leaking out?

Guru

[toffeeman] 10/7/2003 13:46

Either the site or Jamie bidding for Zingo!!

About time they ditched the components, but the cash doesn't relate to the market cap - the components division was loss-making and has a book value of twice the sale price.

I assume they will use the proceeds just to repay the bank loan for the Zingo development - given that the last balance sheet had net debt of twice the market cap!!

Think it's time to set the stop loss!

[guru] 10/7/2003 13:23

Very Interesting.

They sell the components division for half the market cap of the company and then ....

"In addition Manganese Bronze is in talks regarding another possible asset
transaction but no final agreement has been reached."

I wonder what this is, redevelopment of the existing site?

Regards

Guru

[balcony] 08/7/2003 09:13

action on the way here,anyone want to speculate about this statement.

[toffeeman] 07/7/2003 16:56

Sumat's oop!!!!!

[toffeeman] 23/6/2003 18:58

1. Of course small shareholders are heterogeneous and if they are risk averse they invest in low beta stocks or composite investment vehicles. If they are risk hungry they can invest in CFDs or MNGS-like equities! The regulators are there to ensure that directors manage in the interests of shareholders and not themselves - as long as they are transparent about the risks then it is up to shareholders to either invest or if holding sell and reinvest elsewhere.

2. I don't believe they are! - and if they are it is likely due to the illiquidity of the stock coupled to a restricted free-float. Also the term dependable is unfortunate - you can have a dependably poor stock! You have to evaluate the stock on a risk-adjusted basis.

Kind regards

IMO

[jamieborwick] 23/6/2003 18:37

I'm sorry, but I can't debate your detailed points on MNGS. Where you say general points like

"1. I am not convinced that you can categorise small shareholders as being risk averse/non-sophisticated. If small shareholders wish to diversify their risks then they can buy trackers/unit trusts. We need opportunities like MNGS to be available to small shareholders, otherwise it's the already wealth VCs who make the capital gains.

2. I don't buy the hypothesis that a higher risk profile reduces the value of small companies: once the risk is identified, the value of the shares should reflect the associated risks by way of a premium - I believe the analyst terminology is re-rating!"

1 I believe that small shareholders are as varied as any group of people. They include the risk averse as well as the risk hungry, but the directors must manage to meet the requirements of the regulators, and the regulators are responsive to the problems of the risk averse.

2 So why are smaller companies so lowly rated ordinarily, then? And when the companies are rerated, they still seldom exceed the rating of a dependable share. Sometimes, but seldom.

Jamie

[toffeeman] 23/6/2003 18:08

If I might politely debate Jamie....

1. I am not convinced that you can categorise small shareholders as being risk averse/non-sophisticated. If small shareholders wish to diversify their risks then they can buy trackers/unit trusts. We need opportunities like MNGS to be available to small shareholders, otherwise it's the already wealth VCs who make the capital gains.

2. I don't buy the hypothesis that a higher risk profile reduces the value of small companies: once the risk is identified, the value of the shares should reflect the associated risks by way of a premium - I believe the analyst terminology is re-rating!

My reading of MNGS is that the management have been backward in coming forward wrt Zingo - I am no rocket scientist but if the concept works and MNGS gets (say) £1 per Zingo hailed cab ride and you have 5,000 cabs with the system and each does 3 Zingos a day, 5 days a week and 40 weeks a year then that means revenues of £3m per annum with a rather high contribution margin!!

Then if you increase the number of cabs, increase the number of cities, move into private hire, look to other big cities in other countries......

Now the only reason I can think why management aren't shouting from the rooftops is that they don't want to over promise and under deliver, which is presumably why you wanted to take it off the market!!

Anyhow to return to the point having rambled, when/if an institutional investor or two identifies the risk reward profile the price has to move rather quickly - it is just a shame it's taking as long as it is and of course if it takes too long the window of opportunity may well close and trap my fingers.....

regards

[jamieborwick] 23/6/2003 17:22

My original quote was "It is, in my opinion, a large gamble that would be better taken in a private company than a small PLC."

I'm afraid that many shareholders are not as sophisticated as you, Toffeeman, and many fund managers believe that public companies should not take the sort of risks that you mention. It is the higher risk profile that normally reduces the valuation of smaller quoted companies relative to FTSE 100, but the trend of regulation is to have the same rules for small and enormous companies, and therefore to judge the Directors harshly if the investment was to fail.

Regretably, I think that this will mean that it is harder for risk enthusiasts such as yourself to find an investment to your taste, but you and I are in a tiny minority of people investing their own money. With the professionals doing the fund management, risky companies disappear from the market.

Jamie

[toffeeman] 21/6/2003 22:00

Hi Jamie,

I don't follow the logic that the risks of Zingo are more appropriate for a private company than a small public one.

As investors we know the risks and indeed my original investment in MNGS was precisely because there was that risk (coupled with the fact that there is sufficient asset backing to get someone to pay 100p even if Zingo goes belly up!)

You own 40% of the company and institutions most of the rest. Small shareholders like those on this board account for a minimal proportion of the equity. If MNGS were taken off the exchange the shareholding would be virtually identical. JB et al 40% institutions 60% (vs JB et al 40%, institutions 55% the rest 5%).

If Zingo zingoes then it is clear that it will transform the company and with it the share price. I for one am happy to accept the downside in the knowledge that the upside is potentially far greater.

Regards

[jamieborwick] 11/6/2003 09:57

Thanks for your friendly comments. Of course, some would have sold at a loss, and perhaps some at a profit.

My own feeling is that I (mostly) got far better questions here than I did from the analysts and institutional investors, mainly because people here had taken the trouble to read and study the company. A meeting with an institution in which he appears to be glancing at the annual report for the first time as one speaks is rather debilitating.

Unfortunately, the points that you make about price, though fascinating, have many counter points and are exactly the sort of comments that I should resist the temptation to reply to on a public bulletin board! All I should say was in my RNS announcement.

Sorry about that.

As you say, let's hope MBH's loss-making trading improves. If it doesn't, then it will have been a shame that you weren't offered the chance to take 80p, just as you were nearly, but not quite, offered 250-270p.

Regards

Jamie

[jim digriz] 10/6/2003 18:36

Jamie

Your postings to this newsgroup in this past have always been a positive feature of the company - showing an interest in smaller investors which was welcoming. I also think that MBH's accounts which you signed off as Chairman are amongst the clearest accounts of a plc which I have read. This has also been encouraging to smaller investors. However, if the company is taken private, this doesn't much help us smaller investors who will have to sell out to you at a loss.

Many of us small shareholders are prepared to take a gamble - perhaps not too big a gamble for long term investors given the 189p a share asset backing stated at the interims. Even if Zingo fails utterly the situation doesn't seem TOO bleak. Certainly, the "earnings" figures will look a lot better without the Zingo expenditure.

OK, the point in your RNS about the pension deficit is partially relevant - lets hope lots of the pension fund has been in equities since the last valuation!

On that subject, surely it isn't impossible to put together a bid for an awful lot more than 80p, given that, if the bid is successful, there would presumably be 189p-ish of asset backing the resulting company could give as security for the associated very large loan???

Anyway, as we are all shareholders, lets hope MBH's trading improves, and Zingo proves popular.

Jim diGriz

[jamieborwick] 10/6/2003 09:09

Well, you are right that I have a serious interest, but I posted on this site when I was Chairman of MBH, and in a way I was more free to talk then. Anything that I say now may be misinterpreted, and I don't want that.

I am a great enthusiast for Zingo, as I picked up the original comment that inspired it, and wouldn't let it die. However, the question of what it is worth is still open and as yet unproved. It is, in my opinion, a large gamble that would be better taken in a private company than a small PLC.

Jamie Borwick

[hybrasil] 07/6/2003 19:32

Mr Borwick. Its great to see people with a serious interest in a company on this site.

I dont even live in London but I think when they go properly marketing Zingo which they tell me they are not going to do for a while ( they hope to have many more units installed before they do) that it will be a great success. Apparently or so the company tell me its having considerable success already when you condier the only rela marketing is personal recommendation,

Sorry your bid didnt succeed. I had actually told my broker to buy the day befor e your bid was announced but he had no luck