Mbl Share Discussion Threads

[masurenguy] 06/5/2011 09:44

encarter - 3960: The 3 year contract may have been a 2 year contract with a 1 year option.

It was very clearly announced as a 3 year contract, not a 2 year contract with a 1 year option. If it was the latter then it should clearly have been announced as a 2 year contract with a 1 year option at the outset !

"RNS Number : 2066U - 22 June 2009 - The Board of MBL Group plc, the UK distributor of home entertainment products, is pleased to announce that it has signed a new 3 year contract with Wm Morrison Supermarkets plc ('Morrisons') for the supply of Morrisons entertainment into 2012. The contract covers the supply of CDs, DVDs/BluRay and all Games formats."

The RNS issued on 22 June 2009 specifically states that it is "a new 3 year contract". This was followed up, just 17 days later on July 9th, by the following comment by Peter Cowgill (RNS Number: 3695V) in their results announcement for the year ending March 2009.

"We recently signed an exclusive three year contract with Morrisons plc, further strengthening our market position and providing us with the security to plan for the future.........The Group has made a positive start to the new financial year with the announcement on 22 June 2009 that it has signed a three year exclusive supply agreement with Morrisons plc for the supply of its entire home entertainment category."

No reference to any 2 year contract with a 1 year option there either !

When the interim results were announced on 10 December 2009 (RNS Number: 8803D) Peter Cowgill once again reiterated the timeframe of the MRW contract. "During the period, MBL signed a three year contact with Morrisons PLC"

Still no reference to any 2 year contract with a 1 year option there either.

The very next reference to the MRW contract was 11 months later on 8 November 2010 when they announced the Sainsbury contract. This comment was tagged on at the end of this announcement.
"MORRISONS CONTRACT: By way of update, the Board of MBL Group plc would also like to confirm that it has commenced discussions with Morrisons plc with a view to clarifying the future commercial relationship following the expiry of the existing contract in September 2011."

This was the very first time to my knowledge that any reference had been made to the "3 year contract" that was signed in 2009, ending earlier than that in 2011. Some 18 weeks later - on 15 March 2011 - they announced the termination of the Morrison contract !

[jeffian] 05/5/2011 15:57

Masurenguy,

Yes, I understand that which is why I said "one of the many things that seem odd and require explanation of some sort in due course". The fact remains that there must be a contractual relationship. I just look forward to finding out what it is!

[masurenguy] 05/5/2011 15:07

jeffian - 3956: surely this matter is covered by the terms of the contract between MUBL and MRW? It's one thing playing hardball but at the end of the day the terms of terminating the relationship will be written down somewhere in black and white.

That would be my view too BUT it didn't seem to be the case in relation to securing MBL's "three year contract" with MRW did it ! To my knowledge, no explanation has ever been provided as to why MRW were able to terminate a 3 year contract after only 19 months without penalty and why MBL subsequently then also agreed to an immediate mutual termination 3 weeks later which was 6 months earlier than the September 2011 date quoted in their termination announcement on March 15th.

You would have thought that the quid pro quo for this earlier termination would have included MRW's agreement to take the remaining inventory or pay some alternative compensation for relinquishing any liability for it. However some 7 weeks later the outcome of this issue still remains unknown so how much confidence do you really have that there are contractual terms that protect MBL's position in this context that can be legally enforced if necessary !

"RNS Number : 2066U - 22 June 2009 - The Board of MBL Group plc, the UK distributor of home entertainment products, is pleased to announce that it has signed a new 3 year contract with Wm Morrison Supermarkets plc ('Morrisons') for the supply of Morrisons entertainment into 2012. The contract covers the supply of CDs, DVDs/BluRay and all Games formats."

"RNS Number : 6382X - 09 December 2010 - Negotiations underway with Morrisons plc regarding the future commercial relationship following expiry of the existing contractual agreements in September 2011
RNS Number : 3170A: 31 January 2011 - As stated in the interim results announcement on 9 December 2010, the existing contracts to supply Morrisons are due to expire at the beginning of September 2011. As a result of the continuing negotiations with Morrisons, the Company has now been invited to enter into a competitive tender process for the provision of home entertainment product logistics services.

RNS Number : 9476C - 15 March 2011 - The Board of MBL Group plc announces that it has received formal notification from its major customer, Wm Morrisons Supermarket plc ("Morrisons"), of the termination of its two existing supply agreements with MBL. The final termination date of the agreements will be 14 September 2011.

RNS Number : 3979E - 06 April 2011 - The Board of MBL Group plc, a UK multi-channel distributor of home entertainment products, announces that the trading relationship with its major customer, Morrisons Supermarket plc ("Morrisons") has terminated with immediate effect, by mutual agreement.

[charliebrown2000] 05/5/2011 14:47

Jeffian, I'm sure that's normally the case but based on the evidence - weeks later and there's still no news about a settlement on this point - I believe there's a problem and this is only bad news for MBL - firstly it's choking cash flow and secondly, the value of the stock decreases day by day (recent releases quickly become bargain bin fodder).

[jeffian] 05/5/2011 14:08

It may be, CB2000, but one of the many things that seem odd and require explanation of some sort in due course is that surely this matter is covered by the terms of the contract between MUBL and MRW? It's one thing playing hardball but at the end of the day the terms of terminating the relationship will be written down somewhere in black and white.

[charliebrown2000] 05/5/2011 13:29

Is there an incentive on the part of MRW to hold out on a deal? eg If MBL goes bust becuase it can't pay its suppliers, does that leave MRW in a position to pay pennies for the distressed stock?

[encarter] 05/5/2011 12:43

Timesmoney, as my friend JonC likes to put it, lol. There is no mention of them going bust. They were expecting Morrisons to pull out and have been making other plans, mentioned several times in previous statements. Also please stop implying that directors have broken the law, you are treading dangerous ground. The only fly in the ointment is the Morrisons stock and why they haven't agreed on a number yet. Imho they will agree but not sure how much.

[kimboy2] 05/5/2011 12:16

The DTI ? Now you are clutching at straws.

I think there will be lots of smells but no identifiable skunk (in a legal sense).

[timesmoney] 05/5/2011 11:02

Kimboy. When they go broke the DTI are obliged to look at every aspect of the company, they would pay particular attention to recent deals, so a cosy deal will only make the position worse. The reality is the KPMG are discovering that 15% of Uexplore is not worth a light and that the only sale if at all is to the majority shareholders for a few bob. net result (unless something smelly tiurns up, which has been muted by others)is that MUBL directors look like idiots again.

[kimboy2] 05/5/2011 10:13

It may be that they think a cosy deal before they go bust (if that is what happens) may be better than a closer scrutiny from the administrator.

There is £100k that was meant to be paid for a start for MBL "management services" (sic) . However I think the administrator may be interested in the realtionships of the protagonists.

[microscope] 05/5/2011 09:52

Why would U-Xplore want to buy back their stake? If they think both companies have a future I guess they might.
If however they suspect there might be even a small possibility 15% could soon be for sale far more cheaply from an administrator, they might be rather less keen imho.

[encarter] 04/5/2011 22:39

It's all guess work. If they get a decent payout from Morrisons the share price should double and if they don't then it will probably halve, but they have too many assets to go bust imho. Either way talks on redundancies start this week so we should know something within 10 days I'd guess.

[timesmoney] 04/5/2011 20:11

Do not believe it has been built. As it will the company pulling out or cancelling the deal you can be sure that they will be on the wrong end of any financial consequences.

[kimboy2] 04/5/2011 18:10

Tm
Do you know if the shed has been built ?

If it hasn't then the landlord will be in no hurry to build it for a company that may well go bust. In this situation I suspect that the landlord will be in default of any time limits put in the contract.

Assuming there are any conditions.

[timesmoney] 04/5/2011 17:39

In normal cicumstances I would agree. However with this lot, expect the unexpected, except for the certain fact that shareholders will be at the very end of any thought process and any communications.
The reality however is that the landlord has no reason to relax any obligations and will sit it out. Uexplore shareholders will offer 2/6 that's two shillings and sixpence, they have no need of the 15% back. And Morrisons on the stock? I have made my point on that previously.

[kimboy2] 04/5/2011 17:30

Lack of announcements doesn't necessarily mean a lack of progress.

If they hadn't made any progress I would have thought the administrator would be in by now.

[timesmoney] 04/5/2011 17:23

Back to the real issues. It is now 7 weeks since the company announced amongst other things;
'in the next few weeks we will negotiate a payment plan from Morrisons for the considerable amount of stock the company holds on its behalf'
'Immediate downsizing of the opperation'
'the sale of Uexplore to the original shareholders'
'reviewing the lease on the new warehouse'
Sherholders may want to question the directors about the lack of progress on these matters.

[encarter] 30/4/2011 13:34

3 notorius de-rampers posting on the same bb, mmmm, what conclusions can we draw from that? It seems that they are getting worried about something, now what could it be????

[cockneyrebel] 30/4/2011 12:15

I'd like a pint of whatever he's on JonC :-)

CR

[jonc] 30/4/2011 11:29

Is encarter on happy pills or is he just an idiot.

[timesmoney] 30/4/2011 07:23

Encarter. It's not a question of truth or lies, it's a question of likely outcomes. My predictions on these likely outcomes over the past few years have tended to be right. Take a review and you will have to agree.
These shares should be suspended and an investigation undertaken.