Manx Financial Share Discussion Threads

[castleford tiger] 05/9/2024 20:44

The financial services arm is doing much better

[smithie6] 05/9/2024 20:21

"The bank is in for nothing"

...the IoM bank has some big disadvantages imo, it's margin is small imo while it has a fair amount of risk since it has a big loan book, if only a % of loans become bad debts then it produces a big hit to the group profits.

IoM bank, it has some branches, means business rates, heating, insurance, staff costs, staff training, safes, money counting machines, supervisors, managers,
& wage and other inflation in recent years,...increasing the costs....while the other numbers haven't grown as quickly imo.
And the IoM clients expect the branches to stay open, & to receive a level of service, very difficult to make any cuts imo.
We know that in the UK the traditional banks have been cutting the number of branches & staff for years. But on the IoM I don't think MFX could do that.

The IoM bank on its arguably doesn't have that much value imo in £, the value it has is strategic. A volume of turnover, skills, contacts etc...and assisting in funding acquisitions like PA Ltd.

which are very important for applying for & getting the UK banking licence.

One day it would be nice to see that the other acquisitions were contributing & perhaps 'growing excitedly'. But since that hasn't happened so far it seems unlikely to happen in '24. Although the currency exchange subsidiary has done very well over the last 3 years & put good amount of profit to MFX plc.....in the last reported 6 months I think it made £0. (the annual profit it made is equal to the 2023 H1 profit it made). Currency exchange sector has seen the margin % fall hard imo as new competitors compete on-line. The days of banks taking +5% & -5% from the mid price have either ended or are ending quickly. Wise, Revolut, Argentex et al are seeing to that imo.

[nick rubens] 05/9/2024 14:27

Yes cheers Tiger, kind of what I'm thinking, but still we have some share price weakness at the moment but then again it has been lowly valued for many years now.

[castleford tiger] 05/9/2024 14:00

Nick

very little if any exposure there.

Government were also looking at Buy now pay later ........

Its now so low we paid more for the companies we bought than their valuation.

The bank is in for nothing

tiger

[nick rubens] 05/9/2024 13:54

Is it the soon to be published report on car finance from the FCA that is causing the recent share price weakness here?

They mentioned it in the last accounts but didn't seem concerned or feel would be impacted by any potential compensation payments, if at all?

[smithie6] 05/9/2024 11:53

15.0p to sell
15.5p to buy

ouch. :-(

....perhaps some unreported/delayed sell trade causing the dip ??

[stewy_18] 05/9/2024 07:27

Tin helmets for the interims??

[smithie6] 04/9/2024 19:47

a trade report after the bell of 100k shares at 15p (£15k)

added to other sells (500k, was it yesterday, ~£75k)

some sizeable sells going thru in recent days/hours

:-(

who, what, why, where & when ?!

[smithie6] 03/9/2024 15:15

a sell trade of 500k shares sold at ~15p !!

~£75k worth !!

hmmmm

I wonder if there might be a resulting RNS....& if it tells us much...

[nakedmolerat] 03/9/2024 14:41

interims late sept 24
results march 25

not much in the way of updates per year

[castleford tiger] 03/9/2024 14:32

certainly a big seller the amount i have bought.

Baffles me but no news never helps

[lennonsalive] 03/9/2024 13:26

Might have hit traders stops or news leaked before interims?

[tiswas] 03/9/2024 12:59

Looks set to test recent lows.

[smithie6] 29/8/2024 18:16

PA
...but how is it getting on ?

..the documented plan was to expand in to other sectors (& not be mostly for motor servicing, tyres etc) such as retail. As someone has posted after looking at the PA website, there appears to be no real/notable expansion in to retail or dentistry or...

It really is a shame that so little (or none) news or updates comes out of MFX except for the annual & interim accounts & a presentation alongside (but which sadly seems to happily present false numbers !! (as if MFX owned all of PA Ltd when it doesn't, so claimed/presented numbers for growth etc have been wrong; & that sort of game will put off some potential investors imo).

-----

getting a banking licence for the UK in Oct '23 was supposedly a big strategic step forward
....but there has I think been zero news about what is happening with that...& yet we know it is quite an expensive new venture, office in Basingstoke, UK director on about £300k, admin. staff, IT costs (one assumes that software is being created in order to receive customer deposits automatically)
..so plenty of costs
...yet we think that the group has not yet started taking deposits in the UK. From Oct '23 to almost Sept '24 that looks very slow (inacceptably slow imo !) at first glance.

Well, in X weeks will know more about how things went in H1.

[castleford tiger] 28/8/2024 13:58

clocktower

is there any wonder...........

news flow is terrible.

We have to hope the business continues to drive us forward.

Add another 5m plus to nav and this looks silly.

I would get it sold once we have PA it must be worth 100m,

I base that on 10m a year profits

Tiger

[clocktower] 28/8/2024 10:31

Frustration seems to be setting in with some.

Good luck.

[castleford tiger] 28/8/2024 10:05

no i agree plenty coming forward

[stewy_18] 28/8/2024 07:00

I think you are clearing out all the stale bulls CT. There doesn't seem to be a shortage of them.

[castleford tiger] 27/8/2024 17:52

some of those sells are buys.... they were mine

tiger

[smithie6] 18/8/2024 16:27

but I expect that the H1 results will not be very clear, as is normal for MFX, & as usual us PIs will be left with many things being unclear.

(while for sure the chairman will claim everything is a record !!, even if its not)

..while yes, perhaps for some subjects & plans it might not be commercially wise for MFX to reveal too many of its cards/plans.....&; we just have to live with that.

-------

And the big question in the forthcoming H1 results will imo of course be PA Ltd & is it growing, if so by how much or is performance flat.
And how is the overall MFX nett loan margin now. Previously it did reduce I think, has that continued or has the nett % increased ?
It's a big loan book, the % margin makes a big contribution to the group PAT calculations.

[smithie6] 18/8/2024 16:20

Stewy_18 wrote
"When will they start taking deposits and what has the staff in the UK been doing in the mean time?"

indeed

(since getting the licence in Oct '23 & for the year preparing to receive it.....a lot of shareholders' money has been invested.....be nice to get some news on how that has gone & resulting annual income, gonna need to build up a good income (& big amount of deposits) in order just to break even for the UK banking section (with the dirs pay of MFX UK bank of ~£300k & many other costs).

[smithie6] 18/8/2024 16:10

....continued

Foreign exchange part

H1 2023 results said

"Of particular note is our foreign exchange advisory business. It continues to go from strength-to-strength with an impressive first-half profit before tax of GBP0.8 million (2021: GBP0.7 million). "

& the annual result 'was a profit of £0.7million' ..the directors' text didn't say if PBT or PAT. (usual poor clarity imo)

so, while I wrote that I predicted a fall in profit at the forex subsidiary for the H1 2024 results, it is clear that it has already happened in 2023, with the H2 profit clearly being about 0 ! (since the annual profit for forex was about the same as for H1)

for 2022 it was £1.4m profit
for 2023 it was £0.7m profit. (with H2= £0m imo)

for 2024 will the annual result be £0 ?

if so that would be a reduction in profit from that subsidiary in 2 years of £1.4m

if so then clearly the other parts of the group need to run on all cylinders (which PA ltd seemed to be doing, but very opaque numbers, profit is markedly up but official turnover is only slightly up. hmmmm)

to compensate for that fall in profit, imo, at the forex subsidiary.

[stewy_18] 18/8/2024 12:41

The lack of newflow is a real concern Smithie and the main reason the share is so illiquid.

They have a point of care to investors to give a bit more detail regarding the UK banking license. Was it premature to put staff in place before they gained the banking license? When will they start taking deposits and what has the staff in the UK been doing in the mean time? I read it is the second half of this year but this should come directly from the company and what the hold up is.

I want more detail on PAL also. Which direction are they going? Checking the PAL website (hxxps://www.payment-assist.co.uk/search?q=Stamford%2C+UK&distance=20&sector=) I see no movement for the vertinary, dental or legal. Checking my local area I don't see extra automobile merchant added since last year. Is the website maintained?

Are they focussing on the growth of their biggest customer(s) (i.e. Halfords)? I have no clue.

I find it strange I have organise calls with management to try and get this information. I'm really hoping they get their act together.

Lets hope we get a bit more information from the interims.

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[smithie6] 17/8/2024 21:27

ah ha

-----

....although it would be nice if the co. was willing to output a bit more news, anything !
....X months of complete silence...
:-(

----

...looking at the PA Ltd website
...there is no real growth of their client base in to retail, dentistry, etc
(I think about 5 dentists are signed up, for all of the UK)
...not based on the info on their website anyway
...& one of the aims mentioned by PA Ltd & MFX was to expand in to other sectors.
If it has not happened, which was a stated company target, why not ?

-----

What has the bod been doing to justify their cost of ~£800k-900k/year...we wait to see.

(everyone & their friend sits on the bod...
one non-exec gets >£100k/year. High for a small cap. company. Hope he earns it !)

The uk banking licence was obtained some time ago (Oct '23)....& for about 1 year before the co. invested assuming it would be granted. Yet, so far there is no news of any progress. Last time I looked at the MFX/Conister UK website they were not yet offerring to take deposits from UK clients.
Well, fingers crossed that the interims will reveal that they have been working hard & made progress.

The costs for the UK banking section are being paid every month, high cost of its director (~£300k), office rental in B.stoke (in a trendy office building), reception/admin. staff, lights, heating, insurance, monthly building service cost,
.....need to get some gross profit generated from the UK banking licence to counter balance these costs.

----

profit from foreign exchange function/division, MFX Ltd.

btw
...despite the words from the chairman about "impressive performance" from the foreign exchange subsidiary.....the annual profit halved !
"...with an impressive performance .... and earned a profit of £0.7 million (2022: £1.4 million)"

(sadly I now ignore whatever the chairman JM writes since imo it is often very different than the truth !; which is a sad state of affairs)

I expect the profit from this division/section to fall again in this period.
Why ?
Because there are so many new/newish listed & also unlisted companies doing foreign exchange now, & always at lower % margin/commission.
(Wise, Argentex, xe.com, Revolut, Equals, Finseta (lse:fin; ex Cornerstone), Sokin (fin. payments, surely does forex & many more imo). (& look at the bad problems at Argentex forex, with big share price slide down from 120p to 35p)
...clearly, imo, the margin doing foreign exchange is falling year by year)

...& the MFX FC ltd does not act directly but uses an intermediate party ....so a client is paying a % to 2 middlemen not just 1.....I can't see much of a future in that business model, over time ppl will imo just use cheaper services. While, sure, customers of Conister may keep doing some FX using Conister since they have money in an account at Conister & can hopefully quickly do an on-line currency conversion, but the turnover & profit from the MFX fx division/section is from businesses not from £200-£500 conversions by Conister bank clients (any margin on that surely appears in the numbers for Conister IoM bank & not in the separate FX company's accounts.

----

in the annual prelims it said
"Looking further ahead, the unwinding of the pressure on our net interest margin will naturally drive organic growth"

...the nett interest margin has been going the wrong way imo, getting smaller, MFX paid high interest to get in new money in the last fin. year.

MFX imo needs to increase that nett margin (to help pay the inflation on wages, UK banking operating costs & hopefully increase the PAT).
It will be interesting to see if any of that happened in H1.
Of course as the BoE interest rate falls (1 reduction so far & the mkt expects more, over time) the income from regulatory capital deposited at the BoE (or in Gilts etc) will reduce, giving a negative impact on the PAT. And a negative impact imo from the FX subsidiary. And some inflation on costs, although lower than previous years hopefully.
The group needs to get all cylinders firing & be able to absorb (& exceed overall) likely negative impact imo on the PAT from FX & fall in BoE % rate.

Since we have had a news blackout for months (the norm. for MFX) us PIs have no idea imo how the group is getting on. (although we think that the development of the UK banking licence has been perhaps 0/10 (since we think deposit taking has still not started !) & that the expansion of PA Ltd in to other sectors such as retail, dentistry, lawyers has achieved 0/10 (ref. PA website info).
So, I'm hoping the H1 news is good but some indicators are not so rosy imo.

(sure, the chairman will claim record everything but I will ignore that since his claims & the actual reported financial data (= the truth !) are 2 very different things !).