Manx Financial Share Discussion Threads

[elsa7878] 11/4/2024 07:29

Most of that increase in costs will have been wage increases.

[castleford tiger] 11/4/2024 07:19

In October 2023, Conister obtained its UK Branch Deposit Taking permissions which, as well as providing an alternative source of liquidity, will allow the Bank to access new lending and liquidity opportunities. We anticipate taking UK deposits in the second half of 2024, principally via a user-friendly online process.

Overheads, excluding provisions, increased by £1.5 million to £11.9 million (2022: £10.4 million) as the business geared up to become operationally ready to take deposits in the UK. Prudently, it has bolstered its Credit and Collections teams to continue to protect Conister during these challenging times.

That seems to me 1.5 m spent with currently no return
Tiger

[smithie6] 10/4/2024 21:01

...personally I don't think we have full visibility in the accounts for the costs linked to the UK banking licence.

Some of the costs have been capitalised (not charged against the P & L calcs), some have been charged to P & L ; & some were one off costs & some are repeating on going costs.

I personally don't think the accounts give the data for each of those items (& perhaps it is commercial MFX info anyway), so it is difficult or impossible to estimate the cost for 2024 resulting from having the UK banking licence.

-----
Considerable costs have been incurred to set up the UK banking function in advance of getting the licence, (ref. text in accounts)
But this AR says that the co. doesn't plan to start taking deposits until H2 2024.
I have never operated a bank, but it seems slow before starting to take deposits.

And I had expected MFX to provide the banking for it's UK subsidiaries, & for them to deposit their cash (a few million £) with MFX UK, increasing MFX's cash held number.

[castleford tiger] 10/4/2024 15:30

I said profit 6.10 you are looking at profit after tax.

Whilst the 1.5 million ( some of which will occur each year i agree) the operation will be trading and making money



This last year these were additional costs taken to get a uk licence and get systems and staff up and running.

Had we not gone down this route DO YOU AGREE WE WOULD NOT OF SPENT 1.5M?

Therefore the profit would of been 1.5m higher.

are you with me?

[smithie6] 10/4/2024 11:41

Hmmmm

Not sure I agree with all of your data CT.

Attributable PAT was £5.3m & not £6.1m.

UK banking costs.
Some costs were capitalised & hence not charged to P& L.
Some/many costs for the new UK banking function will continue every year imo & won't vanish after the first year. Staff costs, office costs, advertising, travel, lighting, heating. These on-going costs are surely all charged to the P & L account.

There was/were some one off benefit(s) to the PAT this year, such as a large capital gain on treasuries (£1.9m as a PBT, 10% IoM tax, so I assume £0.19m tax, so, £1.7m PAT). You have assumed that it will repeat every year, but it was reported as a one off.
Removing the treasuries one off gain reduces the MFX attributable PAT from £5.3m to 5.3-1.7= £3.6m. A lower PAT than in '23. :-( despite adding + ~£0.6m delta from PA Ltd due to owning 1/2 for 12 months. If remove that you get £3.0m (3.6-0.6) attributable PAT for '24 versus , I think, £4.3m attributable for '22 ie. a fall in profit from £4.3m (2022) to £3.0m (2023). :-(

The margin on money reduced, which was a negative.

The good news was the growth at PA Ltd.
And on-going growth in the loan book & gross income.

How are the various other UK subsidiaries & associates performing?
My recollection of reading the AR was that very little or no data was given, apart from the foreign exchange subsidiary reducing its PAT by £0.7m if my memory is correct; and that the IoM wealth management part has performed better (but not a major venture for MFX, it's been struggling the last few years). (In 2024 imo the £0.7m PAT from the foreign exchange part could suffer further imo, it is clearly suffering from competition imo. Perhaps from WISE, Equals, etc, lots of new players doing FX imo, & margins are surely down.

------

The key for 2024 imo is making a bigger nett margin % between interest received & interest paid out; & reversing the fall of underlying PAT that occurred in '23. In 2023 the nett interest margin reduced, but perhaps affected by various costs linked to PA Ltd & the new UK banking function (while noting that various costs were capitalised).

[castleford tiger] 10/4/2024 11:32

ok a few key points.

Equity value 36m at last year end v market cap of 22m . So 50% under nav.

Profit was 6.1m after paying 900k to Payment assist.

We also has 1.5m costs taken this year to set up the UK banking division without anything coming back.

So next year we should be at 9 million ( 8.1 million ) net without any growth.

We could if interest rates fall be close the £10m this year.

All for a business valued at 22m ?

Then very soon we will have another million a year coming from Payment assist.

This has huge upside potential.

Get signed up to MELLO for monday night as MFX are presenting.

regards
Tiger

[stewy_18] 10/4/2024 10:53

You have a bit of reading to do elsa7878, everything noteworthy in in the history of this board.

[elsa7878] 10/4/2024 10:23

Yes - your right. Still can't see the attraction when compared to the larger banks but happy to hear the logic.

[smithie6] 10/4/2024 10:16

Elsa
There is a yield/divi here.
Is it ~0.46p/share ?
~2.3%

[smithie6] 10/4/2024 10:14

19p to sell now
Ouch.

[elsa7878] 10/4/2024 10:05

Question is do you buy this one on a diluted basis (once the loan notes convert) at 6x with no yield or Barclays on 7x and a 4.5% yield.

[tiswas] 09/4/2024 18:37

There was an Edison note last year after the results.

Are we expecting one this year?

[castleford tiger] 09/4/2024 17:42

22p is tempting me

[nakedmolerat] 09/4/2024 13:19

someone is clearing out at 21p today, bonkers when you consider what good value this is

[smithie6] 09/4/2024 07:36

There are some good directors around. The exec Chairman at Touchstar, Ian Martin, has done a good job of improving the company & without taking high pay or big amounts of options. And the CEO & Chairman at MFX have both been there/here for many years. And recently the deal to buy PA Ltd has been a good success.
(J.Mellon is sitting on a big profit from convertible loans, I don't know why his loans are convertible while the loans from other dirs that exist are not convertible & hence not sitting on a big profit ?).

..well, I guess that AIM especially only has itself to blame. Complete lack of regulation has allowed too many dodgy directors to operate. And so many tiny companies from other countries or continents have listed in London & then turned out to be frauds (eg. Globo) & British frauds as well. Although people have the option to invest in funds to reduce their risk but for AIM companies there are very few funds investing I think. And reducing number of funds investing in listed companies with cap. values <£50m, did Chelverton sell it's small company holdings, & Downing ?

Big companies have had their problems as well, I recall the accounting scandal at Tesco, & directors making tens of millions via options at Persimmon builder, & then leaving ! And at various LSE companies there have been shareholder revolts against directors' benefits/options, but perhaps only at a % of the total number of listed companies.

Sadly the LSE & AIM markets are owned by the brokers, who are only interested in their own pockets & short term gains. (Well, many UK investors are the same; although at MFX there are many PIs, dirs. & >3% holders who have held the shares for some years & have been looking at the medium/long term).

[clocktower] 08/4/2024 09:19

Smithie6 yes his it is Joe Grimmond and if only all directors were like him, there would he a lot more investors that trusted AIM companies and the market in general.

I think Mellon associated shares have an issue as well.

This seems to be the forgotten share, as there seems to be so few trades when there is no news, as it settles down to a pattern and slips as frustration steps in, then the bounce.

How long before the next one?

[castleford tiger] 05/4/2024 17:33

not a trade today

[spangle93] 04/4/2024 21:44

Spruiking of Time by a tip organisation, following the securing of funding - included here for comparison of earning and projected target wwith MFX


In his improved estimates, analyst Andrew Renton at Cavendish Capital Markets, published after the Q3 Update on 26th March, his new figures suggest that the year to end May will see TIME total revenue up from £27.6m to £31.5m, lifting pre-tax profits to £6.0m (£4.4m), taking earnings up to 4.9p (3.7p) per share.

For the coming year Renton suggests that revenues will rise to £33.1m, with profits up to £6.7m, and boosting earnings to 5.4p per share.

Understandably Renton has a high Price Objective for the group’s shares – 71p, which compares very favourably with last night’s closing price of just 39p

[smithie6] 04/4/2024 18:55

..I guess this share has a history of being volatile in the last 24 or so months....
...the small total value & small % of the company in the hands of small PI holders of <£5k, who might be buying & selling some MFX shares, combined with their other buys/sells...producing an illiquid scenario..... doesn't need that much volume to move it up, or to move it down.

[castleford tiger] 04/4/2024 15:08

21/23
not loved at the moment again

these were 30p early on results day

tiger

[smithie6] 04/4/2024 08:50

...CRU...& 'Joe the chairman' :-)
...seems a top honest bloke. & a very good boss, & foreward planner. There are some about.

For forward planning MFX dirs. have done well with PA Ltd, although the jury is still out on all the other acquisitions over the years (& the ability of MFX bod, or not !, to get them to grow !) which arguably have not been significant for MFX, most do not even get mentioned in the AR for 2023 !

'Joe the chairman' :-)
at CRU, is his name Joe Grimmond ?, agree with you on that....'good bloke'
.....but CRU is not for me. Making anything physical in the UK, without patent protection or some other protection of the margin, that's a very tough/risky sector for investing in imo.

[clocktower] 04/4/2024 08:26

Thank you Smithie6, I appreciate your response, and I agree with you about voicing your opinion about salaries and practices of the BOD even when holding shares.

The bulk of them seem to milk it for them and their selected pals.

One of the few companies that have not done so, is CRU over many years, and Joe the Chairman seems to be one of the few exceptions.

[smithie6] 04/4/2024 08:17

Clocktower
...my sentiment, on divis or on MFX ?

On divis, in theory the money is best kept inside MFX, to compound year after year. That has always been my opinion. But, it can always be reviewed/debated, & whether the % of PAT paid out is 10%, 15%, 20% etc.

For MFX, I often/sometimes post criticisms on a share where I hold shares. I criticised the MFX dirs reporting profit & growth as if MFX owned all of PA Ltd when MFX in fact owns 50.1% not 100%. That is an old story, not new, not a change of sentiment.

[smithie6] 04/4/2024 08:09

... definitely an item to discuss/review.

If the bod increase their pay, as they have, by ~25% ....with an increase in £ that is more than the £ increase in the payment to shareholders (see my earlier post) then perhaps the bod should at least justify that.....

Or also increase the payout to shareholders.

[clocktower] 04/4/2024 08:07

Your sentiment seems to be changing Smithie6 ?