Manx Financial Share Discussion Threads

[clocktower] 24/9/2024 13:58

Great analysis Smithie6 but I think the fall is due to the outlook statement about the country being set up for a very austere budget that will have a detrimental effect on investment.

The Labour Party have painted a picture of fear and blamed the Tories for a £22 billion hole but it really comes down to the choices they are making. Nothing to do with needing to raise money but refusing to cut the vast sums given to countries that are richer that the UK even.

Billions of waste or is it a form of corruption money?

I think we have to expect a lot of stocks to fall when the details of the budget come out.

Hence a lot of money coming out the market now, even Frasers selling some of the stakes they built in the likes of Curry's & ASOS.

That along with the government reducing it's stake in NATWEST etc

[smithie6] 24/9/2024 11:31

PA Ltd

'23 AR

"... to a Profit After Tax of £2.1 million (2022: £0.8 million)"

H1 2024

PBT of £1.9m (text written by Jim Mellon)

OR

a PAT of
£372k for 1/2
ie. ~£740k PAT for H1 for all of PA Ltd.

depending on which page of the H1 report you believe.

Since I never believe anything written by Jim Mellon I discard the value of £1.9m & take the PA Ltd PAT as being

~£740k for H1 '24

= ~£1.5m for 2024

down from £2.1m PAT if one believes the text in the '23 results.

======

Result for investors ??

COMPLETE CONFUSION IMO
BECAUSE OF INCOMPETENT NEGLIGENT H1 ACCOUNTS & 2023 ACCOUNTS.

when the bod starts issuing correct accounts (including the text) it will be a good day for shareholders.

[devonlad] 24/9/2024 10:05

Either way you look at it, getting the rest of PAT on board is going to make things a lot clearer and improve earnings. Hopefully then things will be less muddied. The big block trades going through from 8:30 onwards are buys.

[smithie6] 24/9/2024 09:55

MFX attributable PAT. H1 £2.4m

if H2 = H1 then '24 PAT could be ~£4.8m

versus a cap value of only £18m (@15.5p)

a p/e of 18/4.8= 3.75 !!

-----

& owning all of PA Ltd
£2.4 increases to £2.77m for H1
or £5.54m for '24 if H2=H1

p/e= 18/5.54 = 3.25 !!!

(but noting that to see results including 12 months of owning all of PA Ltd one has to wait for the '25 results)

----

And MFX now owns all of PA Ltd.

At this moment there is doubt about the profitability of PA Ltd.

was it £1.9m PBT in H1 or £372k PAT in H1 ?
the interim results give both numbers.

At some time we will find out !

Adding ~£1.9m to the annual MFX PBT would give quite a boost to the MFX profit numbers.
while adding ~£740k to the annual MFX PAT would not be quite so exciting but still a healthy boost.

[smithie6] 24/9/2024 09:13

btw
I make the PBT for subsidiaries, excluding PA ltd , to be £3.4m/year.

(forex £0.5m, Edgewater £0.3m, Brit Lending Exchange £0.4m, other subs £0.5m (believed to be excluding PA Ltd) = £1.7m for H1, if H2=H1 then £3.4m for the year)

ah ha, the other subsidiaries are suddenly making a very material contribution (in previous years only the foreign exch. subsidiary contributed in a material way) & in the cap. value of MFX they are valued at zero.

----
£3.4m PBT = £2.55m if pay 25% UK tax
if give that a p/e of 7 then those subsidiaries would be valued at £18m.

...while the mkt value for all of MFX is ~£18m

the cap. value for MFX looks wrong & underpriced

however !

the mkt value (share price) suffers imo because :-
- the company keeps the market in the dark between accounts
- the quality imo of company presentations is 0/10 & just create negativity because the dirs. present false data.
- there are normally always factual errors in the text of the co. accounts & that puts off many PI investors from investing. (in these accounts the claim of a PBT of £1.9m for PA Ltd appears to be not true)

[smithie6] 24/9/2024 08:51

I think I am going to question the truthfulness of the text written by the Chairman, as I sadly seem to do with each MFX accounts.

"As anticipated, PAL has had a difficult start to this year, despite recording a profit of £1.9 million (30 June 2023: £1.5 million), .."

(= £1.425m PAT if pay 25% uk tax on it all.
ok, that is for 100% of PA Ltd.
so, 49.9% = £0.7m

but

the accounts say that the PAT attributable to minority interests (that 49.9% at PA Ltd is the biggest, most other subsidiaries are now 100% owned), ie 49.9% of the PAT at PA Ltd was
£341k.

The numbers £0.34 & £0.7 for the PAT attributable to 49.9% at PA Ltd do NOT agree !

and by a mile.

One of the numbers must imo be wrong.
I think the £341k number in the financial numbers is correct & hence that the textual claim of a PBT of £1.9m for 100% of PA Ltd must be wrong.
'If' so, it is a major factual error & a new RNS would be needed to give a corrected H1 report.

[smithie6] 24/9/2024 08:43

cashflow statement

last part before the notes section

dividend paid. £2.2m

if paid ~£1m out to the owners of 49.9% of PA Ltd
that leaves £1.1m, looks a bit high at first glance

[smithie6] 24/9/2024 08:34

MFX attributable profit. H1 £2.4m

versus £1.9m for H1 '23

increase = £0.5m on £1.9m

+ 26% !

=======

imo the dissapointment is Conister Bank
despite having a loan book of £300-400m is doesn't seem to make any profit imo.

[smithie6] 24/9/2024 08:27

yes, various good points

MFX, profit up.

PA ltd. profit up
Foreign exchange. profit up. *1
Edgewater Wealth Mngmt. profit up
British Lending Exchange. profit up
other subsidiaries. trading "admirably"

yet the text is downbeat

ignore the text imo, just look at the financial numbers

Profit up & we own 100% of PA Ltd whose profit more than justifies what it cost to buy it.

I think the results are good.
Shares are risk/reward. For me these results reduced the risk. And the reward part has increased. So, I'm surprised by the share price fall.


*1 And I expected a fall, due to competition from Revolut, Wise, Equals, Farensi (spelling ?), I'm happy to have been wrong.

[devonlad] 24/9/2024 08:18

Yup, some of the bits in there are muddy stewy for sure but as you say, essentially that is a good set of results, pe of less than 5 now with PAL being bought out that would add significantly to earnings!

[stewy_18] 24/9/2024 08:14

If you just look at the figures, it is a good set of results. If you read the text without knowing the figures it reads as a profit warning. No wonder no-one knows what to make of it.

They have to ensure the focus is on PAL.

[nakedmolerat] 24/9/2024 08:09

mellon has his fingers in lots of mellons, probably chicken feed to him

[devonlad] 24/9/2024 08:06

Gut feeling is they clearly bought out PAL because they didn't see enough progress. Owning 100% would clear the picture a lot and further growth would leave this now at a silly price. All imho, nai, dyor.

[tiswas] 24/9/2024 08:04

I am not one for conspiracy theories but is this being talked down so that the major shareholders can take it private on the cheap? Bailey and Mellon already own 34% and a foreign company another 14%. I would imagine private shareholders are a nuisance.

[stewy_18] 24/9/2024 07:43

I loved the "Strategy update" in the results. Absolute nonsense!

[smithie6] 24/9/2024 07:39

and PA Ltd profit going from £1.5m to £1.9m is a notable % increase in profit.

So, the wording "leading to a renewal of profitability in 2025" is factually wrong ! (which infers/says that profit fell in H1 '24 but it didn't).

Well, MFX dirs. have never been good at issuing accounts which were clear.

-------

PA Ltd profit for '24 would be £3.8m if it were 2 x H1.

£2.85m PAT

if pay UK tax at 25% on all of the profit. (my feeling is that the tax rate could be reduced to 10% (IoM banking tax rate) increasing the PAT by £0.6m)

if value PA Ltd at 10 x profit then PA ltd is worth

£28.5m

notably more that the cap value of ~£17m (@14.5p) for all of MFX !

----
~£2.85m PAT while it cost MFX 4.4 +5 - 1 (divis)= £8.4m
payback time = 8.4/2.85= 2.95 years !!

(& in fact the profit contribution to MFX is higher since MFX makes a margin in-house on the funds it lends to PA Ltd)

-----
or if pay out all of the annual PA Ltd profit as a divi
=2.85m/116m= 2.5p !!

17% yield !

[stewy_18] 24/9/2024 07:29

“As anticipated, PAL has had a difficult start to this year, despite recording a profit of £1.9 million (30 June 2023: £1.5 million), but we have every confidence that our remedial actions will be successful, leading to a renewal of profitability in 2025. Despite this, I fully expect this business to still have a major positive impact on the Group's full year results.”

Why was it anticipated the PAL was going to have a difficult start to the year???

What remedial actions???

Nothing really makes sense in the results.

[smithie6] 24/9/2024 07:23

bit confused with the info about PA Ltd

profit is up in H1 '24 versus H1 2023 to £1.9m pbt (=£3.8m if H2 is the same) but the text says its perf. is down

??

[lennonsalive] 24/9/2024 07:22

Oh well, now you know why there's a seller. Awful opening statement

[che7win] 24/9/2024 06:54

Hardly condolences, forward P/E must be around 5, it's cheap.

[scepticalinvestor] 24/9/2024 06:44

Oh dearCondolences

[kaos3] 24/9/2024 06:43

my focus is on this paragraph. so rich in info, which i am not able to understand/translate -. assumption, delay, possible attack. being firm, social trends reflection etc. very interesting



I reported at the end of 2023 that Conister Bank's exposure and potential liability following the UK FCA's review of discretionary commission arrangements in the motor finance sector was expected to be minimal. The UK FCA was due to publish its findings in September 2024, which would have given clarity on the position, but it has delayed its final announcement until 2025. Pending the announcement, the Board continues to be of the view that there is no present need for any provision, and Conister Bank continues to consider a range of possible outcomes.

[che7win] 24/9/2024 06:35

PAL profits not exactly what some were posting here?"As anticipated, PAL has had a difficult start to this year, despite recording a profit of £1.9 million (30 June 2023: £1.5 million), but we have every confidence that our remedial actions will be successful, leading to a renewal of profitability in 2025. Despite this, I fully expect this business to still have a major positive impact on the Group's full year results."

[kaos3] 24/9/2024 06:29

even if one of the best swimmers ... when the tide turns ....hard to get ahead .... but worth appreciating the swimmer and keeping a keen eye on the swimmer

future champ