Mbl Share Discussion Threads

[jeffian] 02/12/2010 11:55

david,
Whilst that may make all sorts of practical and strategic sense, it's hard to see how such a thing would work to our advantage. The Hut is valued at £32m with a 2008 t/o of £24m; we are valued at less than £20m with a t/o around £200m! With those ratings, the tail would be wagging the dog!

[davidosh] 02/12/2010 11:24

Maybe individually we should thank PC for the excellent Matt Porter presentation and advise him that we are 100% behind the current strategy and certainly do not want any offers until the end of 2011 when the white label deals and digital offering will be well established and Morrisons deal out of the way.

Here is some interesting info on the main competitor for GMV and white label deals....



The Hut Group has completed a unique deal, achieving a highly attractive valuation and raising a significant amount of money in advance of its planned admission to AIM in early 2011. Given the obvious challenges associated with raising pre-IPO equity funding, the appetite from such high quality investors to back The Hut Group has been exceptional and reinforces the company's potential for growth."


Anyone thinking they could do a clever bid for MUBL and sweet deal with TA allowing him to exit with the old business and use the listing and future business would dominate market with GMV on board and useful supply too ?

[scott84] 02/12/2010 11:21

David.

Just a thought !

If online sales are surging and they are the future here and everywhere
else that means there has to be a surge to deliver it all on time, i'm
only saying it's going to be a bit tricky if this weather dont improve
in a hurry and they reckon it's going to be with us for a while, certainly
where i am we dont see snow much and it's knee deep.

With everybody grounded and going online for xmas can it all get delivered
on time ?

[jeffian] 02/12/2010 11:16

They said they would update us on the Strategic Review when they report the interims in December. It would be really nice if they could knock this quasi-offer on the head and we could concentrate on the fundamentals again.

[davidosh] 02/12/2010 10:41

If there are any Harry Potter fans or any of you looking for a nice bargain Xmas filler for family/friends the HP box set of the first six films is terrific value at £12 on the Sainsbury site. It is £30 in some shops and the individual films even on the same site are £4.99 a piece. Do let me know your order numbers. Looks like over 1700 sales yesterday. This weather will drive traffic online

[jeffian] 02/12/2010 10:34

This from the Morrisons thread, so it appears that they are not totally against web offerings.

DMF - 1 Dec'10 - 21:59 - 75 of 75


Morrisons goes mobile, launches iPhone app and mobile website

[edmundshaw] 01/12/2010 14:13

tx Max. Very helpful for those that were not there.

[davidosh] 01/12/2010 14:05

Remember,remember 5th November...first day launch
Day 5....101238
Day 7....101792 (am)(dvd)
Day 8....102353 (am)(book)
Day 12...104263
Day 20...109109
Day 21...110059 (pm) (Two dvds)
Day 22...111070 (pm)
Day 25...114342 (am) (multiple order)

Wow....orders are rapidly increasing and over 1200 a day average now.

At this rate the orders are going to hit 2000 per day within next two weeks at some point. With snow on the ground those online sales are bound to increase.

[maxcashflow] 01/12/2010 12:40

I've done a bit of a writeup on the GMV presentation here:

[miamisteve] 01/12/2010 10:29

David - Just sent you an email. Wanted to discuss the presentation when you have a moment.

[marben100] 30/11/2010 00:10

Timesmoney - please don't waste OUR time by expecting us to comment on matters that you know perfectly well can't be discussed whilst in a bid period.

[rbcrbc] 29/11/2010 18:19

I am happy re: the 'mbo this way' situation because that RNS was issued on 5th October when the share price was around 125p, any such mbo (if it happens) would normally be at least a 25% premium to the then share price i.e 150-160p ish. which would leave me in profit - although I think the co, is worth more.

As for the 'profits warning' a pbt last year of 9.9m vs a Mkt cap of 19.8m gives a lot of room for trimming. and 'the Board is ...... taking positive steps to address this anticipated fall in profitability'

We should know a lot more soon:
'The Board will provide a further update in the Group's interim results statement, which is expected to be announced in December.'

[timesmoney] 29/11/2010 18:05

Sorry to put a downer on all this wonderful stuff about how well the on line is going and these other new investments, but did anyone chat to the elephant in the room? you know, the one which has the placard saying 'profits warning' and 'mbo this way'(please don't waste your time telling me they could not comment as they are restricted by the SE)
But please do comment if you take off the rose coloured specs for a minute, and tell me why you are so happy when we are all still in the dark apart from the restricted and limited rays of light that have been allowed out only due to the pressure of folk on this BB.

[rbcrbc] 29/11/2010 18:04

I am staggered that nobody has written a review of the presentation over on TMF btw.

Marben always does such good write-ups ;-)

I am staggered that more people didnt have a top-up today....

[jeffian] 29/11/2010 17:25

We can "presume" whatever we want but the truth is we simply don't know. It does indeed seem that U-e needed MBL's cash and financial muscle to drive its growth, as well as access to its technology and content catalogue -
"Andy Pickles, CEO of U-Explore, comments:

"This partnership with MBL comes at a critical time for U-Explore as we move into a significant period of projected growth which will require the business to gear up to maximise on the wealth of opportunities available to us. MBL brings an added level of expertise to our board, access to resources to drive the business into new markets, and the ability for both businesses to leverage their content and technology assets to further exploit new and existing markets."

but that is not so different to the rationale for the GMV acquisition -

"Matthew Porter, GMV's Managing Director said,

"We have been seeking a partner for some time now who can support the development of our rapidly growing company. Joining the MBL Group gives us the strength and credibility necessary to drive our business further forward. It's a great strategic fit for us."

- the difference being that we took 100% of GMV (thereby aligning the interests of both parties) whereas we have only 15% of U-e. Matt Porter sounded quite excited about the potential for U-e saying that it could be 'massive' and envisaging that it could be 'taken out' at some stage - in which case 85% of the fruits of our cash support, financial muscle, content and technology assets goes to someone else!

I've flogged this to death now so I won't go on, but I still think it's odd and nobody has come up with a convincing case for it.

[davidosh] 29/11/2010 16:53

'As part of the agreement, Trevor Allan will join the Board of U-Explore and MBL will receive fees for the management services that MBL provides, amounting to £100,000 in the first year.'

It sounds to me like Andy Pickles preferred a deal with MBL for cash structured like a loan with a 5% return. Maybe they could not get the investment they needed through standard routes. At the Agm it was made clear to us when we asked about the shareholding in U-Xplore that the share agreement gave us more shall we say influence than the 15% on paper.

Incidentally I rather think PC and KPMG are unlikely to allow 100k to go amiss after the tone of the recent conference call with shareholders.

[kimboy2] 29/11/2010 16:48

It might all go into his pocket yet but the RNS says it will be paid to MBL.

[miamisteve] 29/11/2010 16:42

I'm quite sure the 5% will go into TA's pocket. It's a management fee for his pearls of wisdom.

[kimboy2] 29/11/2010 16:24

I would presume with regard to the £2m that U-Ex needed cash and they have in effect been given the cash at 5% by MBL in return for a 15% shareholding as part of the agreement.

I think the important point is that it is part of the agreement between the 2 companies. This agreement will involve both the trading relationship and the equity relationship.

We do not know how revenues and profits are going to be split or the value of the relative assets that are going to be used by the companies. I presume the £2m is a conterweight to these considerations.

I think the agreement has to be seen as a whole rather than in parts. Of course it would have been very helpful for us investors to get a better idea of the whole if we had been given more information.

Perhaps more will come out in the interims. Incidentally I notice from companies house that TA is not yet a director of U-X.

[davidosh] 29/11/2010 15:50

jeffian...A very good point and well made. Mind you TA may well have tried getting 15% of Sainsbury as part of the website deal...LOL. If only.

I am staggered that nobody has written a review of the presentation over on TMF btw.

[jeffian] 29/11/2010 15:18

goonertone,
I don't know if I am one of the people who "have become fixated on u-explore and the need to tell the world they don't get it and to try to find some deep dark conspiracy theory between TA and Andy Pickles" but the limit of my "not getting it" is the 15% stake. Following Matt's presentation, I better understand the opportunities available but it seems to me that there are two quite distinct elements to the relationship - 1) the trading relationship and 2) the equity stake. I can quite grasp the benefits of MBL accessing U-e's customer base, sharing platforms/technology etc., on agreed financial terms but they didn't need to have an equity stake to do that (after all, they didn't feel the need to acquire 15% of Sainsbury's!). What do they get for their 15%? Control of the business? No. A share of the profits? Not necessarily if U-e choose not to make a divi distribution and they can't 'aggregate' a proportion of profits in their accounts with such a small stake. Is their interest marketable? Probably not. I take your point that this is very much an add-on to the core business at the moment but its importance is that it is indicative of the way they see the business going and as they've chosen to invest quite a lot of 'our' cash in it, I think it's fair to try to understand why they have structured it the way they have. I don't.

[davidosh] 29/11/2010 14:15

From the Sainsbury interims....

Our online groceries business continues to go from strength to strength, with annual sales up over 20 per cent, and weekly orders now regularly in excess of 120,000. Our offer is even more widely available across the country, with over 90 per cent of households able to access the service. At the same time we continue to see further improvement in our availability and customer satisfaction, with both performing ahead of target.


Weekly users must be around the same 120k level if doing a one week shop or maybe a little less if more active. I guess if the Entertainment site can attract 15% of those to buy something within the first month it is doing pretty well.

The profit margin on supply and delivery of a £20 average game or dvd order and a £70 grocery shopping trolley are probably not far apart either !

[davidosh] 29/11/2010 12:29

I have been emailed with another Sainsbury order number and the latest indication is that orders have breached 1000 a day for yesterday at least. All those box sets ordered....lol

They are missing a trick IMO though. Why invoice for £20 with £2.98 included making the net return to the seller at £17.02 without VAT when they could have sold it at £17.99 VAT free and increased potential sales, made buyers very happy and also gained nearly £1 in profit ???

With all those newly registered users and promotional ads in national media I can see sales going through the 2000 a day level pretty quickly and probably by the end of this week or middle next as these are the peak selling weeks online.

[goonertone] 29/11/2010 11:13

Whilst on u-explore and the meeting, one question summed up the problem with the u-explore deal and MBL's involvement and that was(apologies if I am picking on one of the posters here)why would schools allow MUBL to sell music via the kiosks(or other POD cant remember the exact phrasing)within schools if that is the cross selling invisaged?

As far as I can tell although the teachers can use u-xplore as a teaching aid the schools buy a licence but the users are the pupils who can then log on from home, at school, wherever once their school has signed up. The software is used as a tool by the pupils who access their own personal accounts. It is these pupils that I beleive that MBL want to tap into. Number of pupils tied in to u-xplore currently - 500,000+ growing rapidly as far as I can tell.

Now that budgets are tight the rush to divest careers advisors for an annual software licence that fulfils their commitments under the govts rules must be high for schools. If their was an option to pay a reduced fee and allow limited advertising from bee.com or something similar how many would take it?

GT

[rbcrbc] 29/11/2010 10:37

Agreed U-explore and kiosks are not the main business, even if we were to lose the large Morrisons contract it is low margin, and the underlying business together with the enormous potential of the white label website must make this a steal at 116p. Dont forget the EPS of 40p and yield of 6.5%.

p.s. A site to keep an eye on for future months:


p.p.s. Interims were out 8th Dec last year.