Manx Financial Share Discussion Threads

[smithie6] 29/9/2024 12:05

but the point/info you post (from Communist China, a country without basic justice) is completely unrelated to what happens in the UK & Europe.

and completely unrelated to MFX.

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any directors in China that upset the people in power risk a lifetime jail sentence, loss of all their possessions & perhaps even a death sentence. And they are scared of court processes in China which they know have little or no resemblance to justice.
So, yes, in China many directors in the financial sector have resigned so that if the state decides to seize the assets of acting directors that it will be from a new director & not 'their' assets !
And it is a sign that the directors in China do not trust the state or the justice system (& rightly so).

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the property sector bubble in China was created/supported by the State politicians.
As was the property sector bubble in Spain in 2004-2007.
The politicians in the UK & Europe are also responsable for the high rental prices & the lack of social/council homes. But they behave like normal politicians & try to blame everyone else but themselves ! (in the UK & Europe the politicians have co-operated with a never ending increase in housing demand from (illegal) economic migrants ....while doing nothing at all year after year to increase, in response, the number of homes in the country. (& the new PM is arguably more interested in having nice new clothes & spectacles (all for free) & going to watch Premier League football matches with his son, for free !; & the new PM is a left wing politician so it is in his blood to do nothing to stop the arri al of economic migrants, & for some years he worked as a lawyer for immigrants.....so, he is an ally to their cause. Personally I expect Starmer & his Govt to be shown to be incompetent. In its first months the Govt is filling that expectation).

[kaos3] 28/9/2024 17:21

on the broader topic - why some executives resign

[smithie6] 27/9/2024 19:57

apologies for another post from me

but

Just to make one point.

That it appears proven that Douglas Grant as the CEO does not have a golden touch.

- PA Ltd. failed to deliver the target of >=@£2.5m/year PAT

- plan for acquisition of PA Ltd. Not delivered to plan.

- plan for expansion of PA Ltd in to other sectors. failed.

- growth in profit & prospects/hopes for PA Ltd have hit a brick wall after high profit growth in 2023, profit is apparently down in H1 '24 but a lot of that profit growth in '23 was perhaps/probably due to one off cost cutting (getting rid of directors' cars etc)....the turnover didn't increase that much (15% ?)

- D.Grant departed from the bod of PA Ltd (the great white hope for MFX shareholders) in January 2024. Which appears to register failure to deliver according to plan. PA Ltd was the biggest most exciting acquisition by MFX. No shareholder is interested in any of the other subsidiaries.

- Exploitation of the new UK banking licince which was hailed by the dirs as great news.
1 year later & no use appears to be being made, at all, of the UK banking licence despite it producing many fixed costs for MFX !!

- cash going out for fees & comissions has rocketted, when the plan for last X years was to keep reducing/avoiding paying it !

- while the stated plan/strategy has FAILED to be delivered the exec dirs & the bod they have rewarded themselves very highly, 973k for the bod in '23 & ~1m shares for free for the CEO !

- while the stated plan/strategy has FAILED to be delivered by the execs & the bod the communication from the company to shareholders and the market is a DISASTER ! ( every poster on this forum complains about it, including large shareholders).....there is basically NO communication to shareholders & the mkt.

- the H1 accounts stated that a fall in performance at PA Ltd was expected in advance of H1.
NOTHING was communicated to shareholders or the market imo !! The AR makes NO mention of this.

- it seems that every time that MFX issues accounts it just creates a cloud of confusion because the numbers give in the text (written by James Mellon) never agrees with the actual numbers inside the accounts.
These H1 accounts it has happened YET AGAIN !
That, imo, is PATHETIC !
& imo the dirs should be ashamed.
The accounts need to be viewed by shareholders & the mkt as being clear, correct, understandable & to have no contradictions. Yet, all MFX accounts are imo difficult to understand & always include contradictions !!

This time around the chairman wrotes that profit at £1.9m for PA Ltd is down & remedial action will be taken. Yet £1.9m for pbt (=~£1.4m pat) for PA Ltd is 58% higher than it was in H1 2023 !?
And the accounts give/infer a PAT for H1 for PA Ltd of 2 x the minority interest of £372k for H1, = ~£744k

HALF the PAT that the Chairman claims that PA Ltd achieved.

This creates a situation of doubt, not good.
(imo incompetence but we have to wait & see if the co. can provide a logical explanation; the accounts do not include any explanation for this major contradiction).

- & main part of MFX, Conister bank, is operating at a loss, & borrows tens of millions via loan notes at 6% to then deposit it in treasuries & get ~4%, losing 2% on each £ !!, imo. while the chairman claims that Conister is operating "admirably" !!
From treasuries MFX gets an income of ~£4m/year (100m @~4%, +/- X)
When the treasury rate reduces to 2% that £4m will be reduced to just £2m.
How will MFX compensate for a £2m fall in profit ?
Is there a plan ?

- while the stated plan/strategy has FAILED to be delivered the exec dirs (Douglas Grant & James Smeed) on their high salaries present data to shareholders & the market which is FALSE.
the dirs take the shareholders for idiots !
(for the data for H1 2023, & 2023 annual data.....MFX owned 50.1% of PA Ltd & 50.1% of its profit. Giving data in a presentation to shareholders which included 100% of the profit of PA Ltd (in order to present more impressive growth & profit numbers) was intentionally presenting FALSE data. (& imo disgraceful).

And when questioned about this the directors still avoided being honest. 'ah, but we will own 100% in the future'. (well, when you own 100% include 100% in the profit numbers in presentations, until then, include 50.1%, & stop telling porkies !!!)

=======

If one compares the accounts & communication for MFX with another company that does lending to businesses in the UK (as does MFX), lse:time. The accounts from Time communicate text & results from directors that are executing according to the company's stated plan & are successful at what they do & have everything under supervision/control. Their accounts & text & their presentations (!!) give confidence to their shareholders & the mkt.
Very different than for MFX, which is opaque in its reporting (eg. forecast drop in performance in H1 at PA ltd was kept secret from shareholders & the mkt !), every time MFX issues accounts a cloud of unknowns or contradictions is created (again this time) & MFX does not like to interact with shareholders or potential shareholders, whereas at Time I think they are quite happy to communicate with investors (they present to investors, eg. at Mello).

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imo the low p/e given to the MFX shares in part shows the low regard that the market gives to the bod of MFX. imo they should not repeat year after year that the market is wrong but instead they should imo change & take on board some of the criticisms given in this post, many of which have also been posted over the years by other posters.
Beckham changed from an uncontrollable problem player, a bit wild, to someone much more controlled & then diplomatic & tactful. change is possible.

And of course MFX need to manage Conister & debts/loans & start making money out of a £300-£400m loan book rather than it (+ HQ & central costs) dragging down profits achieved by the various subsidiaries in the UK.
If Conister (incl. bod & central costs) continues as a loss maker & the cost of the bod remains bloated then it will be harder for MFX to attract share buyers.
And need to make a success of the UK banking licence or will it fail to achieve the plan for it, as has happened for PA Ltd.

[smithie6] 27/9/2024 14:57

stewy_18
...I agree

£300-400m loan book for Conister itself (apart from PA Ltd & other subsidiaries)

& that infers a risk for shareholders since 1% of additional bad debts in a year might = £3m, & make most of the group profit vanish.....

and yet despite that big risk

it doesn't produce a nett profit if you include the cost of the bod !!

taking a risk in return for making a loss !!...that is a bad deal imo.

------

and plenty of fixed costs for having the new UK licence
.....so, one would expect urgency to have some deposits producing a nett % income, to start reducing the monthly loss for having that UK licence & the associated Basingstoke office & staff

& yet, almost 1 year after getting the uk licence the impression is that Conister uk is not operating !
....the H1 accounts state that not yet taking deposits.

and despite having the uk licence for ~1 year the newsflow to shareholders for use/exploitation of that licence is about 0. :-(

[sooty snipes] 27/9/2024 14:51

Bit naffed off with this share. I can see why Tiger has been here for ten years or more.

[stewy_18] 27/9/2024 14:08

"Conister Bank ltd.....group's principal profit driver...and continues to perform admirably..."

This really annoys me.

Why do they think investors are interested in a high loan book bank that makes sweet FA in terms of profit??

Investors are not here for Conister bank. I can invest in many better run banks than Conister!!!

They need to stop dropping the ball with PAL and give this a lot more focus than they have been.

[smithie6] 27/9/2024 11:10

Why did Douglas Grant leave the bod at PA Ltd ?

I don't know.
But, one guess
..he surely played imo a major part in the 50% increase in staff at PA Ltd in '23, & the stated plan to expand in to other sections. And the presentation to investors that PA ltd had high growth & it was hoped/expected to keep growing.
That story has now changed. The expansion to other sectors failed to happen. The profit at PA ltd has apparently failed notably in H1 (although there is confusion about what the profit actually was !!!, FFS !!).
And PA Ltd has failed to achieve it's targeted PAT of £2.5m/year.
And MFX has bought PA Ltd early, because everything has not been going as planned.

The focus now at PA Ltd appears to be the reduction of costs.

The plan & focus has changed radically.

So, Douglas Grant is not a shining star regards PA Ltd....& what he stated was the plan has not been achieved.

By leaving the bod at PA ltd it might be that he is trying to separate himself from his part in the decisions & failure to achieve what he stated was the plan. He was/is the MFX CEO so he played the mejor role in defining strategy for PA Ltd. PA Ltd was dependant on MFX funding for its growth & MFX controlled the bod ...so, it was MFX making the top level decisions....= Douglas Grant.

[smithie6] 27/9/2024 11:02

kaos3
You are completely wrong imo.

Directors often leave a sinking company because of a combination of reasons such it would be bad for their CV to be at a co. that goes in to administration (& they have to declare it to other companies where they are a director), being involved in a co. in administration is not fun, dirs will not get bonuses at a co. doing badly, any share options they have will not be worth anything.....etc

It is imo usually nothing to do with the subject of legal liability.
And note that directors are not legally liable for any poor decisions they make. They are only imo liable for theft or intentional actions made to damage the company; & only if proven in court. In the UK there are imo almost no legal cases against directors.

[smithie6] 27/9/2024 10:48

....MFX pays 6% for £30m of money obtained from loan notes

Only to park it in Govt treasuries where it gets ~4%.

MFX says it has excess liquidity, too much cash. (Inferring it doesn't need X amount of that £30m of loan note money)

Losing 2%/year on that £30m of loan note money !

(When most banks like to make a positive nett margin on money, not lose !)

(& for some loan notes I think MFX pays ~8% interest !....4% higher than the money gets parked in UK govt treasuries !)

anyone want to comment on that ?.

[smithie6] 27/9/2024 10:34

Btw

I disagree with some other text written by Jim Mellon.

"Conister Bank ltd.....group's principal profit driver...and continues to perform admirably..."

imo the main part of Conister, including the bod costs, is loss making !!,
(& that imo is why the share price is so low).

The bod mainly exists because of Conister bank. The subsidiaries have their own directors & do not need the 8 expensive directors on the MFX bod.

The MFX half of PA Ltd made £0.4m pat in H1
The other subsidiaries made ~£1.4m pat
and ~£1.4m pat was made from selling treasuries.
That adds to give ~£3.2m pat.
But the group attributable PAT was £2.4m.

So, the rest of MFX (which is imo Conister + bod-HQ costs) made a loss of 3.2-2.4
= £0.8m for H1 !!!!!!!!

That equates to £1.6m annually.

There is no mass demand from investors to invest in shares of a bank (MFX) where the main core of it is loss making !

And a lot of the costs of Conister come from staff costs & branch costs; these are costs that Conister can not reduce. The IoM clients expect the branches to be there & to keep operating. The £1m annual cost of the bod in '23 is unlikely to reduce, in fact recently another non-exec. director has been added ! And the bank staff & the dirs will all demand pay rises that at least keep up with inflation.

:-(

[kaos3] 27/9/2024 10:23

i was asking, not saying.

if are there any possible risks outweight pay

ps - i have seen deserted posts in several companies well in advance by good experts. because there were risks - not known to the public. they went long before risks were recognized so experts that went away were legally free.....

[smithie6] 27/9/2024 10:13

!!????

I'm not really sure what you were trying to say.

perhaps you were referring to Douglas Grant resigning from the bod of PA Ltd.

....if you get paid £400k/year as the CEO of a listed co. & are given ~1m shares for free !

well, yes, there are risks involved in doing the job....& responsability...but clearly with high rewards

and the risks are reduced by working with other experienced qualified people & the use of meetings to discuss difficult/big subjects. etc

[kaos3] 27/9/2024 10:02

not engaging into subsidiary means
1. not wanting to take on additional work
2. risks

so a Q
are there any risks holding an executive position at PAL. insiders know. because work means giving directions mostly. could be done. many people hold many executive positions. so risk might be the cause.

[smithie6] 27/9/2024 08:48

What words are different?

What you wrote & what I wrote in posts 2500 & 2501 look the same to me.

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Anyway, you agree that claiming a PBT for PA Ltd of £1.9m AND stating it is a reduction in profit & that remedial action will be taken .....does not make any sense at all
...because the PBT for PA Ltd for all of '23 was £2.4m (ref. the PA Ltd accounts), which is £1.2m for 6 months

So, achieving £1.9m for H1 would be a JUMP in profit....not a reduction!!

& no remedial action would be being taken !!

So, my opinion that the claim of £1.9m is false, is a logical opinion.

And the accounts say the PAT for PA Ltd was £372k, minority interests.

The only other minority interest where MFX owns >50% is in Nakinsi, the beer fermentation vessel company. The value of the 10% stake not owned by MFX is valued at ~£50k. And the turnover of Nakinsi is ~£1.5m, small. And the company operation is quite stable imo. So, imo it can be safely ignored when considering its part of the minority interest PAT.

[castleford tiger] 27/9/2024 07:50

Not sure you are right.

Jim Mellon writes in the H1 accounts that PA Ltd made a PBT of £1.9m in H1.
This is £1.425m PAT after 25% UK tax.
But that PA Ltd had a tough H1 & that profit was down & that remedial actions are needed.

HIS WORDS ARE DIFFERENT TO THOSE YOU USE

[smithie6] 26/9/2024 20:53

PA Ltd

PBT: PAT

2023. £2.4m : £2.05m

Jim Mellon writes in the H1 accounts that PA Ltd made a PBT of £1.9m in H1.
This is £1.425m PAT after 25% UK tax.
But that PA Ltd had a tough H1 & that profit was down & that remedial actions are needed.

A PBT of £1.9m in H1 equates to ~£3.8m for '24.
versus £2.4 in 2023. An increase of £1.4m or +58%.
That would not make sense since the text says profit is down & remedial action will be taken to try to get the profit back up. So, imo the text from Jim Mellon can just be ignored as being complete rubbish.

While the accounts say that PA Ltd (100%) made ~2 x £0.372m PAT (for 1/2 of PA Ltd)...for H1 '24.

= £0.74m for 100% of PA Ltd
or ~£1.5m/year. That agrees with a profit reduction from £2.05m in '23.

I have confidence in the number £0.372k given in the accounts for minority interests, 1/2 of PA Ltd. so, £0.74m for 100% of PA ltd.

[smithie6] 26/9/2024 20:48

reminder

PBT & PAT numbers for PA Ltd are given in post 2467

[smithie6] 26/9/2024 19:47

elsa7878

...imo just ignore what the directors may say

Why ?

Because the dirs & the chairman have a proven track record of telling porkies !

In accounts AND in presentations the dirs have given profit numbers that included 100% of the profit of PA Ltd, when MFX only owned 1/2 of PA Ltd. ie. they are quite happy to mislead investors.

The spikes on the 3 year chart shows that investors were in fact mislead & the numbers from the dirs were previously believed.

[smithie6] 26/9/2024 19:37

I'm not going around in circles, if you are referring to me.

I have the accounts. I can read the numbers in the accounts.
(It says "minority interests £372k")

If some chairman writes some rubbish, & also contradicts himself !!! (On one page he writes that PA Ltd was down from 2023 while on another page he writes that PA Ltd profit was up !. imo he's lost the plot !)

who cares.
If JM is off his trolley, it's not my problem/fault.

The numbers in the accounts are what matter.
----

...personally I expect a correction RNS next week.
With the PBT for PA Ltd reduced from £1.9m to £0.9m.
Although since the numbers are in the blah blah section of the accounts perhaps the rules might not insist on a correction RNS).

-----
..treatment in the MFX accounts of minority interests .
...it was debated & agreed ~1.5 years ago.
And I summarised it again in recent days.
If you have forgotten the posts from 1.5 years ago, it is up to you whether you want to go back & read them. Not my problem.

[castleford tiger] 26/9/2024 18:36

700,000 total buy?

[castleford tiger] 26/9/2024 18:34

Err thought PAL was up from 1.5 to 1.8 first half?

[smithie6] 26/9/2024 11:36

these results with the news shines a light on the high cost of the bod

almost ~£1m/year (£970k !!!!!!)

~1/4 of the PAT

with the poor performance at PA Ltd & its failure to expand in to other sectors (as planned) & failure to achieve a PAT of £2.5m (which "was" the reqt. in order to get the £5m).

and MFX has so far failed to do anything with its UK banking licence despite having held it for 11 months now !!
& it involving/creating a chunk of fixed costs for MFX, just its CEO costs ~£300k/year. (which also seems very high pay when we are not seeing any results !)

one has to question why the bod is about 10 people !!
& why 1 non exec gets >£100k/year...at this microcap company

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£3.8m of fee & comission costs in 6 months, =£7.6m/year !!

ouch !!

has Mr Banks returned ??!!

The policy for ~6 years was to reduce the cost of comissions paid to 3rd parties....so the sudden big % rise in that in the last 12 months is a bit worrying.

And MFX has various subsidiaries doing lending....with experienced staff, all getting paid by MFX
...so why is MFX paying so much to 3rd parties in order to find takers for MFX's cash ?

and if the money sits in Govt treasuries it collects an ok %.
Is the lending via 3rd parties paying a notably higher return ..."after" paying this £3.8m of commission to the 3rd parties ?

Does the bod look at these details & ask the exec dirs to justify what they are doing ?
Or are they kept in the dark just like the shareholders ?