Mbl Share Discussion Threads

[maxcashflow] 18/3/2011 08:18

Shares are being offered at 13.4p this morning, so it looks like buys are going through as sells on ADVFN both today and yesterday. 13.4p is £2.3m market cap. Surely the company, even on break up value, is worth more than that?

[timesmoney] 17/3/2011 19:36

Recent posts by understandably angry shareholders are drifting toward allegations of fraud. The related party transactions declared or undeclared are deeply suspicious. As is the whole uexplore investment. If you shareholders think that might be the case you need to coordinate yourselves and report it to the DTI.
If I were a shareholder which I am not (and have no loss or cause of action) I would do it. Davidosh has been vocal and must feel very let down by PC and the gang perhaps he would do this?

[typo56] 17/3/2011 19:05

Tanners...I would have also thought that Trevor Allan should have declared having been a director of Media Sales Direct Ltd, a position he resigned in August 2009. Media Sales Direct Ltd was the related party conduit they used after Sales Media Solutions Ltd became insolvent.

[jonc] 17/3/2011 08:47

Many of these laws or regulatory requirements are quite clear.

Remedies however are more opaque.

[tanners] 17/3/2011 00:26

Kimboy2.......I would refer you to the Annual Report and Financial Statements.

In 2010 on page 60 in the notes at paragraph 23 it states that there are related party transactions with Sales Media Solutions Ltd to value of 2,832,000 pounds (2009 7,029,000 pounds) - yet in the 2009 accounts there is no paragraph 23 and no mention that I can see of related party transactions.

If anyone else can find mention of these in the 2009 accounts then by all means enlighten me, but as far I can see MUBL have failed in their obligations to report this not inconsequential figure.

If this proves to be the case then clearly there is a breach of their statutory requirements and action should be taken.

[encarter] 16/3/2011 23:08

Just seen the RNS, looks like Artemis Investment Management have bought 515,000 shares. May explain why my buy wasn't filled.

[encarter] 16/3/2011 22:41

Still think it's worth a punt at these prices. As long as Morrisons take the outstanding stock they will still have a business, though much more streamlined and loads of cash. The way these deals normally work, though this one may be different, is that Morrisons would commit to x amount of stock, MBL would buy the stock from their supplier. Morrison would have a % on sale or return and if MBL are on the ball they have the same deal with their supplier, so that any stock returned or unwanted by Morrisons is then returned by MBL to their supplier. They just need to agree the numbers imho.

[tommyjnewton] 16/3/2011 21:34

It's interesting how litle fear the crooks at MBL had of the regulators. Maybe a £20K fine or a serious crack at making several naughty millions. As a modern gambler without fear of Hell etc it's an obvious choice.

[qvg] 16/3/2011 18:11

Just seen this in thebusinessdesk.com
quite relieved I assessed it as a Value Trap in November. Maybe KPMG will recover some value.

YORKSHIRE supermarket group Morrisons has terminated two major supply agreements with MBL Group, a distributor of home entertainment products.

In the year to last March, around 78% of Leyland-based MBL's turnover related to sales to Morrisons.

MBL said the notification of the termination in September is a "significant disappointment" for the group, which has had a 14 year relationship with the supermarket.

The board of MBL had been in negotiations with Morrisons for several months regarding a future commercial relationship but also failed to secure a third party logistics service tender.

MBL said: "The announcement will necessitate a significant downsizing of our operations and with regret the resultant loss of employment for many of our employees.

"We are commencing discussions with Morrisons and the new service provider regarding those employees who will be in scope for TUPE (Transfer of Undertakings Protection of Employment Regulations) at the end of the agreements.

"Negotiations are also continuing regarding the stock balances which MBL has purchased in support of the existing agreements and which represent a high proportion of the total stock balances of the group."

The board also announced that KPMG Corporate Finance is to be appointed to seek a suitable purchaser for the group.

MBL said: "As such this may or may not result in an offer for the entire issued share capital of MBL, though there can be no certainty that any offer will be forthcoming."

[deswalker] 16/3/2011 18:05

Kimboy - incompetent they are not. Questions of what is immoral and what is illegal are open to debate but preferably not on a public forum as walls have ears.

[druinsky] 16/3/2011 17:59

1p beckons

[kimboy2] 16/3/2011 17:58

What have they done that is illegal (as opposed to incompetent or immoral) ?

[masurenguy] 16/3/2011 14:01

Axe threat for 320 jobs
Wednesday 16 March 2011

Staff have spoken of their fears after it was revealed more than 300 jobs are to be axed by a Lancashire firm which supplies DVDs, CDs and computer games. The MBL Group, which employs 320 people at its base in Leyland, confirmed on Tuesday that it expected "many" of its workers to go after supermarket giant Morrisons confirmed it was axing its contract to supply its stores.

Shareholders in the company told how some of them have lost £100,000 after the value of the company's shares nose-dived, losing half their value following yesterday's announcement alone, and questioned the company's management team receiving £1.7m in salaries and bonuses last year. Non-executive chairman Peter Cowgill, the high-profile boss of North West sportswear giant JD Sports, received a £300,000 bonus on top of a £30,000 salary last year while chief executive Trevor Allan received a package worth £1.1m, the company's annual report has revealed.

One shareholder, who asked not to be named, said questions were also being asked about the decision to buy careers advice business U-Explore in a £2m deal last June. He said: "Ever since those figures came out in the annual report, shareholders have been banging their hands against a brick wall trying to find out how the management team justified such pay levels for a company of the size of MBL. There are a lot of questions which need answering about both about this and the purchase of U-Explore, a company which had apparently few links to MBL's core business, for such a price."

Shares in the company, which stood at £1.60 per share last year, plunged 51% to just 15.5p per share at the close of trading yesterday – wiping millions off the value of the company. The deal made up 78% of the company's sales. A spokesman for MBL said that the company's management team, including Mr Allan and finance director Lisa Clarke, who is was reported received a £265,000 pay packet in 2010, were unavailable for comment.

Mr Cowgill was also unavailable for comment when contacted by the Evening Post yesterday. In a statement to the stock exchange responding to news of the Morrisons deal yesterday, MBL said:
"The notification is a significant disappointment to MBL which has had a successful long-term commercial relationship with Morrisons for 14 years. The board of MBL had been in negotiations with Morrisons for several months regarding a future commercial relationship but have also been notified that they have been unsuccessful in securing the third party logistics service tender. As previously announced Morrisons had decided to move away from the existing full supply arrangements provided by MBL and the announcement will necessitate a significant downsizing of our operations and with regret the resultant loss of employment for many of our employees."

It is believed that Mr Allan holds a 26% stake in the business with his family holding a further 12%.



NB: The newspaper thoughtfully published a nice picture of a smiling Peter Cowgill to cheer them all up !

[typo56] 16/3/2011 13:46

Given that the directors haven't exactly been open about the situation, can you be sure there aren't more negative revelations to come?

[tanners] 16/3/2011 13:46

encarter- don't be fooled by the stock level, as this is not free stock as from the last set of accounts creditors exceed debtors by 9M, so in the event of the winding up of actvities they will need to get cost price on 90% of the stock just to satisfy this difference.

Given the disparity in the two recent statements with regards to the Morrison contract, i.e. the first seemed to state that Morrisons would take on and pay for all the stock MUBL held on it's behalf, and then yesterday's statement which gives a very different impression; I think there has to be some doubt that even if all the stock was sold that it would not* raise the sum of £9M.

Given other inevitable pressures on MUBL's cash from this sitaution, I personally struggle to see any value even at these levels; let alone taking into consideration the judgement of those running the business!

*Edited for loads of typos, and a rather important 'not'..!

[encarter] 16/3/2011 12:45

They paid 15p a share in divis over the last 12 months. I bet most shareholders would take that now. It's worth multiples of the the £2.5m it's at now to any potential buyer imho. When they announce the details of the Morrisons agreement I expect a sharp rise in the share price

[encarter] 16/3/2011 12:14

If Morrisons are contracted to take 78% of the stock and it's worth £20m then MBL could have £16m cash coming.

"Morrisons has confirmed to the Company that it will assume responsibility for the stock held by MBL on its behalf during the remaining period of the existing contracts. This stock commitment represents a significant proportion of the stock held by the Company."

Perhaps one final divi. £17m in to 17m shares is 100p per share. Could be one last big pay day for directors and other shareholders.

[hugepants] 16/3/2011 12:04

Its possible there could be a significant lease liability on the new factory building (see thread on Motley Fool) so I sold my paltry investment this morning. Bought a few more shares in that mutt Hirco with the proceeds. So out of one frying pan and into another!

[moathunter] 16/3/2011 11:52

Well, there might be value in buying MBL at £2.5m, *IF* you're knowledgeable of liquidations and buyouts. KPMG's involvement should tighten past governance standards.
But personally being ignorant of such situations, this is a loose suggestion.

[encarter] 16/3/2011 10:51

Just doing a bit of research and these are looking cheap now. They have £20m stock and £10m cash coming in plus £2.5m in the bank, total £32.5m with only £20m going out. Think I will try to free up some cash and grab a few.

[moathunter] 16/3/2011 09:57

This reminds of Buffett's observation "when a manager with a great reputation meets a company with a dire reputation, the company's reputations stays intact"
Peter Cowgill of JDSports could be considered the "great manager", but he couldn't save MBL.

Tiswas- sadly, if I were you I'd just sell MBL and spend more energy on examining how your investing process led to this investment and tweak your investing process accordingly. Better to spend your energy minimising risk of error with your future results than trying to salvage wrecks from the past.

Forget conference calls and questions such as a TMF poster suggested- that's often just anger with oneself spilling out onto the Directors. Given the tiny probability that a few minority investors could enact meaningful improvement in their circumstances, this is a waste of time.
I lost 3% of portfolio in RCG- just got to suck it up and learn not to repeat it.

(Own thoughts on MBL at post 3631).
Sefton Group invested c. £3.6m into this around a year ago and now have c.£0.36m! "I am the destroyer of wealth, look on my works ye almighty and despair".

[tiswas] 16/3/2011 09:06

Have any of the above knowledgeable posters actually filed a formal complaint?

Is David Dosh still looking to organise a conference call, is there any point to that still?

Do we know what cash balances will be assuming sale of Morrisons stock?


I have a loss of less than 1% of my portfolio but still feeling pretty stupid for holding on to these.