Manx Financial Share Discussion Threads

[castleford tiger] 07/10/2024 08:55

we are getting 5.25% with virgin instant access on amounts over £1m

I am getting 4.75% as a premium ac holder on any amount.

tiger

[nakedmolerat] 07/10/2024 08:49

i vote to install smithie to sign off accounts

[smithie6] 07/10/2024 08:24

...well, that word/name doesn't appear in the AR for '23, according to pdf search, so that looks like a non-starter.

(unless they held <3%....but my guess is that >3% has been sold.
...seems strange that no RNS about change in holding % for the seller)

[1chrism] 07/10/2024 08:16

Blackrock?

[smithie6] 07/10/2024 07:47

no rumours yet for who the big seller has been, how many shares they held & why they have been so keen to sell ?

[smithie6] 06/10/2024 19:11

what % rates are other banks paying on deposits , in comparison with MFX ?

1) Nationwide in UK seems to be paying mostly 2.0-2.5%

massively lower than the 3.9%-4.6% type of numbers being paid by MFX IoM



2) Natwest
ok...paying a higher % than Nationwide

3.9% AER on 1 year fixed term
similar to MFX

but only up to £5k, whereas at MFX, £5k is the minimum.

[...]

[smithie6] 06/10/2024 15:04

GEARS

so, MFX pays 3.9% on a 6 month deposit
or 4.6% on 6 month notice deposit
(I assume the difference is the requirement to give notice)

4.6% annual.

absolute madness imo !

ridiculously high imo.

no surprise that Conister bank (+ HQ costs) effectively operates at about break even. :-(

-----

and 3.6% on 3 year deposits.
hmmmm
if the BoE % base rate falls to 2% from current 4% then the rate being paid would be higher than the base rate, which looks unwise imo ....the rate paid looks too high imo

it 'perhaps' also infers that MFX is not expecting to take a lot of money in deposits in the UK in the shortterm....so it has to raise its public client money solely in the IoM & that seems to require high % rates to attract depositors.
I assume that Barclays, Natwest, Halifax on the IoM must also be offerring high % rates (yes ?), giving MFX little option but to do the same in order to get deposits & replace/renew deposits which end their fixed period.
:-(

----

Are UK banks paying 3.9% or 4.6% on 6 month deposits, I doubt it ?

-----

MFX can take that deposit and put it in UK Govt treasuries at 4% and make a profit margin before costs of just 0.1% !

which provides about enough for a new jar of Nescafé every Xmas for each bank branch but makes no contribution to the cost of the IoM bank branches & the staff costs & £1m cost of the bod !

[smithie6] 06/10/2024 14:57

MFX profit
...while it is dissapointing to post about a jump in tax rate from 10-13% to 21%, jump in commissions paid of ~£0.9m, jump in admin. costs of ~£0.9m doubling of the cost of the bod from 2019 to 2023 (to £1m)

one can see the possibilities at MFX,....through the fog

if the company can reduce the cost of the bod to say £700k from £1m (saving £300k; impossible imo since just announced another extra director, so more cost !!), achieved a reduction in the group tax rate of say 6% to 15%, reduced the jump of £0.9m in commission paid out, reduced the jump of £0.9m in admin. cost, reduced the external banking cost of £1m !!, etc etc.....& hopefully achieved a better nett profit from the IoM (after HQ costs)
...then the result for MFX's PAT would/could be notably higher.
The underlying profit is there.

MFX has a number of cylinders, if it could get all of the cylinders firing instead of 3 out 4 & fixed the sticking brake .....it could do much better. But in the last X years it sometimes feels that when cylinder 3 gets fixed, that then cylinder 2 starts misfiring ! and so on.
Recently the small UK subsidiaries are doing better and the 2 main IoM subsidiaries.
..imo now just need to get the cylinder for Conister bank (+ HQ costs) firing nicely.
And then in time for the added cylinder to also fire up, Conister Bank UK ltd, but how many years that might take is anyone's guess, 1 year has gone past so far & it hasn't even started taking deposits yet ! :-((

[gears] 06/10/2024 12:22

hxxps://www.conisterbank.co.im/savings/fixed-rate-savings/
The new rates are out.

[smithie6] 06/10/2024 11:21

...long sufferring readers of my posts are surely used to read me criticising the MFX chairman Jim Mellon.

and that imo that various things that he writes are imo just not true ! or are white lies and intentional misrepresentation of what is 'true & fair/correct' (as required by the Company Act 2006; not that the UK regulator has ever actually applied said Act !)

Here is a new complaint.

In the H1 '24 accounts Jim Mellon writes about the profit made by subsidiary
British Lending Exchange Ltd.
" Our UK based sub-prime lender, The British Lending Exchange Limited"

Well, according to Companies House UK there is no record of such a company !!

I repeatedly complain about the low quality of the MFX accounts. This is yet another example.

yet again
Jim Mellon 0
Smithie6 1

=======

We pay the bod £1m/year and yet the quality of the accounts is imo pathetic.
Clearly no one checks the accounts to identify & remove any mistakes or make sure that the text used can be understood by a reader.
It appears to me that Jim Mellon writes the text & he also signs it off, without letting anyone else check it for errors.

Giving 2 very different profit numbers for PA Ltd on different pages (one number being 2x the other) without any explanation was another error.

Giving the MFX PBT as £3.5m was arguably another error since MFX owned 50.1% of PA Ltd not 100%, so the PBT of lse:mfx was not £3.5m. But that is an error that has been repeated for ~2 years, so hopefully all shareholders that read this msg board know all about it.

=======
(updated)
....I had forgotten that MFX did any lending at all to the sub prime sector !!
....neither of the words prime or sub-prime appear in the pdf file for the AR for 2023. But they do appear once in the AR for 2022. With mention of sub-prime lending to UK SMEs. At the end of 2023 the loans in place were ~£6.5m. With bad debts/loans of £1m. But it seems to be fairly consistently profit making now.
I thought that the MFX thing was all about low risk lending, asset backed lending to businesses, lending to people with cars via PA Ltd (if they can run a car they are hopefully/often a low risk borrower), etc

Interesting to see that what was perhaps the last founding director resigned at Business Lending Exchange in August '24. James Smeed (MFX CFO) is now the sole director I think.
So, founding directors departing at PA Ltd & at Business Lending Exchange.
Can the MFX dirs now run these 2 subsidiaries & any others in a good manner; as well/competently as the founding directors did ?
Are these subsidiaries now more profitable due to having a lower cost for directors (since a number have departed) ?

[smithie6] 06/10/2024 11:05

apologies for my posts taking over this forum

but
I think I am throwing out some useful numbers
& I am doing some real calculations.

--------

I try to avoid posting now for a while, and perhaps others can post their opinions and/or comment on any points I've made, in agreement or disagreement.

[smithie6] 06/10/2024 10:48

Do the accounts for H1 2024 or the related presentation include mention of corporate re-structuring of Conister including Conister UK ltd ?

If so, does this perhaps indicate that the bod & exec. dirs are asleep, noting that the UK banking licence was obtained 1 year ago & money was also being spent on that months in advance, to prepare in advance, to help start using the licence more quickly (that never happened !!!)
If these costs generated in the UK (just the MD costs ~£350k/year !!!, + office costs+ staff costs....) are not used as a cost for UK tax calculations for MFX plc because Conister UK ltd generates no profit to set these costs against & because it is owned by Conister IoM (different country for tax)....is that pretty stupid on the part of MFX ?

(perhaps MFX is about to take action & fix it, but with 9 directors & £1m cost of the bod it seems surprising if there was no forward planning and/or why it was not done before)

( if a new Conister UK holding co. owned PA Ltd & also Conister UK banking ltd then one assumes that the losses from Conister UK banking ltd could be added to the profits from PA Ltd, reducing the overall profit & hence reducing the tax to be paid, increasing the combined PAT).

-----
.(....could a hydrofoil be hired 8 times per year, & have the 8 bod meetings on UK soil & charge the £1m cost of the bod as a cost, versus UK tax, & avoid £250k of UK tax !
....just joking !)

[smithie6] 06/10/2024 09:04

...here are the numbers. :-)))

so
in H1 '24

UK produced £2.6m of PBT. 25% tax
IoM produced £0.9m of PBT. 10% tax

..giving £3.5m PBT & £2.8m PAT (including 100% of PA Ltd, when MFX only owned 50.1% in H1, but now owns 100%)

noting, these are using numbers from the financial pages, not from the chairman's blah blah text,

--------
IoM
PBT of £0.9m
PBT of Edgewater + forex subsidiary combined was £0.8m in H1 2024.

so, all of Conister Bank IoM (& its big loan book of ~£400m + ~ £2m income from treasuries + HQ/plc costs (£1million for the VERY EXPENSIVE BLOATED BOD, ~9 members, 9 !!!!,)

produced a PBT of only

£0.1m !!!!!!

remove £1m of that £2m income from treasuries in H1 '24 if the treasury rate reduces from 4% to 2% over 18 months & it would be a loss of

£0.9m !!

imo for Conister bank, for just 1/2 year !!

CONCLUSION
Conister Bank needs a shake up imo.
Reduce the number of dirs from 9 to 5 to reduce the cost of the bod. (imo removal 2 of Jim Mellon's sidekicks/mates, Denham Eke & Gregory Bailey),

is this the professional bod of a banking group or a club for Jim Mellon's friends & business partners to plug them in to the MFX gravy train ?

No pay rise for any director in '24 since the pay rises in previous years have been excessively/very high, except phps for the CFO who is not on a high pay & is paid notably less than the CEO.

Note that the cost of the bod has doubled from the AR for 2019 to the AR for 2023, to £1million/year, that imo is just taking the mickey !!

Has this expensive bod suceeded in keeping the group tax rate close to 10%, the IoM tax rate ?
NO, failed ! (tax rate in H1 '24 = 21% !!, up massively from 12.8% for AR '23 )

Has this expensive bod suceeded in increasing or maintaining the profit from the IoM part of MFX, excluding Edgewater & the forex part ?
NO, failed !!
the profit from the IoM part of MFX if exclude Edgewater & the forex part was just £0.1million !!
& reduced from previous periods.

Has the bod guidance & direction enabled PA Ltd to expand in to other sectors ?
NO. failed !
(even the CEO of MFX no longer sits on the bod at PA Ltd !!!!!!!!!)

Has this BOD succeeded in maintaining or increasing the profit from the loan book ?
Failed ! margin & profit are both markedly down.

Paying this bod a fortune is NOT producing the required results.

Shareholders need to admit/accept that A) these non-execs have little influence on the business. Or that B) they do have influence but are incompetent ( look at the terrible performance of Conister bank) . Whether it is A or B, the solution is to remove 1/2 of them, & reduce pay levels.

The bod costs a fortune but is FAILING to deliver !!

(One non-exec. gets ~£100k !!
That seems absolute madness imo !!!!)

CONCLUSION
get rid of some/lot of the 9 board members & no pay rises in '24 (except perhaps for the CFO since his pay is much lower than that of the CEO).

[smithie6] 06/10/2024 08:59

if the tax rate had been as per AR for '23, 12.8% then H1 '24 PAT would have been ~£300k higher, at £3.05m, much better wrt growth etc.
....& the share price might be a smidge higher than 13-14p.

-----

the jump in the effective tax rate is simple clear evidence that PBT in the UK as a part of the group total is notably up, while the IoM part of the group total is "notably down" versus H1 2023 & versus AR '23.
Going on, IoM businesses, combined profit from Edgewater + forex part was quite good or at least similar to previous periods ....so, the profit from the remaining parts on the IoM has notably FALLEN. That means that the profit from Conister bank IoM has notably fallen.

imo there is insufficient presentation of information for that in the H1 accounts (eg. what was the PBT or PAT for Conister bank IoM in H1 '24 & what was it in the prior year ?
What action is being taken to improve/recover the reduced profit performance ?

...there might be some numbers for nett margin etc in the accounts but I think us PIs want to see information revealed at the top level,

for example
' the PBT for Conister Bank IoM fell by 30% from ___million in H1 2023 to _____million in H1 2024. This was because we have been lending out money too cheapily. To return to the same profit as in H1 2023 we will be increasing the % rate for any new loans to clients started after H1. We will also keep a close eye on staff levels & try to avoid any increase in the number of staff. The on-going increase in the use of digitilisation/automisation to try to increase productivity will continue'.

[smithie6] 06/10/2024 08:33

...if anyone was bothered enough they could work out the PBT in the IoM (that pays 10% tax) & the PBT in the UK that pays 25%
...to produce the result of 21%...

[smithie6] 06/10/2024 08:14

well, 10.3%, 12.8% & now 21%.....shows that it isn't working very well, imo ....or not in H1 '24 at least. :-(

With all the IoM finance experts on the BOD (costing £1m !!) you would think they could do better.

MFX plc is based on the IoM but in H1 it was paying close to the normal 25% UK company tax rate & not the IoM 10% tax rate for banking (& perhaps 0% for anything else !?).

-----
Can they do anything to get that % rate down ?
... 10% less tax in H1 would equal £350k, ~£700k/year increase to PAT.

[castleford tiger] 05/10/2024 21:46

Think that’s what they were doing

[smithie6] 05/10/2024 17:34

btw

tax %


2022. 10.3%
2023. 12.8%
H1 2024. 21% !!

A massive increase in the tax % in H1 2024.
One assumes this is due to higher profits from UK subsidiaries.

Can the group do anything to reduce this tax % & book more of the profit in the IoM with its 10% tax rate ?

[smithie6] 05/10/2024 13:44

btw

be interesting to know interest rates for deposits (& loan notes) & money lent out (& deposited in treasuries)

for H1 '24

A) deposits & loan notes
cost = £ 10.7m + 3.85 (commission expense)
= £14.6m

£ 409 + ~£30m loan notes
= £439m

% = 14.6/439
= 3.3%

B) money lent out (& deposited in treasuries)
income = £27.2m + 0.766 + 2.0 (incl. £0.3m gain existing but not booked)+ 2.2 comission
= 31.6+ 0.8
= £32.4m

£370m +70m treasuries +23m (lent/moved to other banks)
=463m

% = 32.4/463
= 7.0%

C) difference
= 32.4-14.6
= £17.8m

========

Observations
7.0% interest rate average is very dull/low imo when you have bank branches & staff to pay for and a bod that eats £1 million per year !!!!!!!

while the interest margin is healthy enough.....but clearly most/much of the cash generated is eaten up paying for bank branches & their staff.

The big hope over the last 2 years was that PA Ltd (which obtains the highest % on money lent out) would do well, expand in to other sectors & that it would lift the profits of the group.
Sadly PA Ltd has dissapointed many of us with its growth (although the information provided to us market is very little & is very 'cloudy') & it has not expanded in to other sectors (or not that anyone would notice). And the recent news is that PA Ltd is seeing challenging conditions & remedial actions will be taken at PA Ltd. So, the big hope, PA Ltd, is currently looking faded compared with the bright star that it was in the weeks after MFX bought 50.1% of it.

And the CEO of MFX resigned from the bod of PA Ltd in January 2024. That does not give the impression that the MFX CEO plans for PA Ltd to expand rapidly & take over the world, otherwise he would have stayed on the bod imo. :-(
Many investors in MFX in the last 2 years were interested because of PA Ltd & were not very interested in the rest of MFX which have seemed to be trundling along with ups & downs (Edgewater Wealth Managers, MFX forex) & little growth in profits. Although those smaller subsidiaries did well in H1 '24 & made a notable contribution to the group profit. Any chance they might provide growth for MFX ?

[smithie6] 05/10/2024 13:31

Island Farms ltd

looks like the owner is
RICHARD DAVID BELLAMY

-----

Anyone know why an IoM registered company appears in the data at the UK Companies' House when the UK data base is for UK companies which I assume excludes IoM companies
& there is surely a separate entity in the IoM for IoM registered companies. (with surely almost equal rules & regs)

It is because of the rules for money laundering ?
Perhaps so that any company buying/selling shares on a UK stk mkt or registered as holding >3% perhaps needs to register at Company House UK of any holder of 25% of that non-UK company.

[castleford tiger] 04/10/2024 17:40

Payment assist made 2.7m last year and cost us 10m.

Look at the market cap now.

Its madness and it will come out ok

tiger

[sooty snipes] 04/10/2024 15:17

If only the directors had your confidence in the company Tiger. Apart from Mellon I don't see that. Not one of my better investments. That's for sure

[castleford tiger] 04/10/2024 15:09

Time FOR THE COMPANY to buy back some shares i think.

Problem is Jim holding might increase over the allowed limit

tiger

[nakedmolerat] 04/10/2024 13:46

maybe wait until after the budget with aim stock

[smithie6] 04/10/2024 12:09

"Either reduce the public spend or tax the economy to it's death knell"

..be interesting to see what happens with this labour Govt

I think they realise that they can't tax the economy to it's death knell & of course no left wing Govt will cut spending on services (or only minor cuts if no other option)

but I guess that there are sectors of society which have money & I guess the Govt will try to take some money off those people !!
perhaps
- ppl with savings/money
- ppl with income that doesn't come from working every day
- reductions in tax relief on pension contributions to a max of 20-25% (personally I always thought that ~40% tax relief for 40% tax payers was too generous)

(I would expect that the CGT allowance will just be deleted (but Brits can use an ISA so why should they get CGT allowance as well ??), any divi income tax free, again delete
....owners of second homes or homes to let might well be targetted again.
-------
so, it is unlikely to help the uk stk mkt indexes but perhaps 1 month later it will be gorgotten, hopefully...

-------
while season tickets to football stadiums, gifts of expensive clothes, immoral bahaviour by Govt ministers , etc will surely get very kind tax treatment !
je je