Mbl Share Discussion Threads

[jeffian] 12/12/2011 10:03

Kimboy2,
Ref your 4508, I was at the AGM where Cowgill said that there hadn't been a written contract with Morrisons prior to the '3-yr' one announced in 2009, but it is impossible to believe there was no written contract in the light of the RNS statement of 22/6/09 ("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.")

I would just dearly like to know what it said!

[kimboy2] 12/12/2011 01:10

Seems to me that they didn't understand the contract even if they actually had one anyway.

It is apparent that TA's reputation was essentially based on luck. Once the fair wind changed the decision making became exposed as hopeless.

The quality of the management is the most important feature and the most difficult to judge.

[davidosh] 12/12/2011 00:44

marben100,

From memory only that question was asked at the AGM and I think that the answer was until the three year contract that was signed in 2009 there was no formal written contract with Morrisons. That suggests the 11 year relationship could have ended with no notice whatsoever up to that point...which is pretty much what happened at the bitter end as it was impossible to complete it once the 80% of business was known to be lost by suppliers !

It really amazes me that the Redworth business was bought for about 12x earnings by Air Music & Media when due diligence would have shown that their huge dependence was on Morrisons continuing as a customer and there was not even a supply contract in place to guarantee continuing business. TA negotiated and secured one of the best deals in history there and collected £17m plus the large shareholding in MBL that he now holds. In reality therefore the MBL collapse is something TA will have foreseen until the dependence on Morrisons was removed. So why did the directors all take such high cash bonuses before that key task was achieved ? Without that paramount hurdle jumped MBL were heading for the knackers yard if Morrisons changed horses !



The acquisition is for an initial consideration of £27,600,000 which will be
satisfied by a cash payment of £15,984,703, the issue of £1,615,297 of loan
notes and the issue of 100,000,000 consideration shares. An additional
£10,000,000 of deferred consideration may be payable to the vendors in deferred
consideration shares, subject to a maximum aggregate vendor shareholding of
49.99% of the then enlarged share capital, and thereafter in cash, subject to
the achievement of financial performance targets by Redworth for the year ended
31 March 2005.

[marben100] 12/12/2011 00:17

Kimboy2,

Just for clarification, my understanding is that, incredibly, there was no proper written contract with Morrisons.

Mark

[exmblstaff2011] 11/12/2011 15:13

i am waiting to hear what you all have
and what you all want to know

email me at

[e-mail]

i have had 3 emails so far, surely they are more of you who are curious to discover the truth

[kimboy2] 11/12/2011 15:09

I would suggest discussions take place off board.

[cockneyrebel] 11/12/2011 14:51

exmblstaff2011 - you're not TA are you? :-)

I'd say before anyone sends you anything then Deppthroat, CA and Timeismoney should confirm here that you are kosher imo.

CR

[exmblstaff2011] 11/12/2011 14:04

Dave,

we all know that the large high profile shareholder is Sefton Group plc, from the Isle of Mann.

working out who I am is not important.
i can tell you who Timesmoney, Curved Air, Deepthroat3, and others are.

Email me what you know, what you want to know and I will see if you are anywhere close to the truth.

"The truth is out there"

[davidosh] 11/12/2011 13:53

exmblstaff2011

In fairness none of us are likely to know who you are so it seems a touch strange to ask peeps to wemail you first and then to collate info on behalf of shareholders. I will retain confidentiality for everyone and the large shareholder who is backing this is very high profile so will not want to do this without protecting everyone and then taking the correct action as necessary.

If any of you know exactly who this new poster is then I am happy that you liaise with each other.

[davidosh] 11/12/2011 12:28

Thank you for the emails. I can be contacted by email simply by replying to this posting..



Just uncheck the reply to board option and tick the email option.

[kimboy2] 11/12/2011 00:13

No I am not saying it is all right. What I am saying is that they will have a defence to most accusations. Their defence will be incompetence rather than deliberate criminality.

As davidosh says there is loads of smoke but people are going to have to come forward to show where the fire is if anything is going to be pinned on them.

I don't think Cowgill is going to be any help unless something absolutely concrete is produced. His agenda is to cover his backside.

I suspect that their exit strategy is to buy the company out for virtually nothing, which is where the company is heading.

There is no doubt that they have been utterly incompetent running the company. I would be surprised, if they have been up to no good, that they have been competent in this.

Perhaps the fact that so many seem to know bits and pieces would support this supposition.

I think that if anything is to be done it needs people to come forward soon before the waters close over.

[deepthroat3] 10/12/2011 23:41

[e-mail] for anyone who would like to contact me.....

[jeffian] 10/12/2011 23:37

Kimboy2,

I don't know how to respond to #4494. 'Oh, that's alright, then"? I don't think so!

[timesmoney] 10/12/2011 22:45

Davidosh
What you say makes sense in that a co ordinated approach is needed.
However I imagine that some ex staff and others would be nervous of an open meeting and who might be there. Using the solicitor that you mentioned I wonder if suggesting one on one appointments might not be a better proposition?
Is there a department at the SE that can help?

[davidosh] 10/12/2011 21:35

I think we are also forgetting the late reporting of the related party transactions with TA being a director of his brothers company at one point too. That was detailed in the 2010 AR but actually stated that there had been £8m of business done in the previous year with nothing shown in the 2009 AR. If I had known about such transactions with a family member then I would have asked far more questions at a much earlier stage in my investment and certainly not invested as heavily during that particular year.

I naturally had concerns about the 15 year warehouse deal without a break clause especially with a U-Explore director who we also now know so much more about. However my biggest concern now is probably the fact that seven different potential whistleblowers suggests there is no smoke without fire !

You guys need to all decide how much that information needs to be properly placed in front of shareholders as a group rather than drip feeding us and putting titbits on here. I think a few of you must know each other so come to a joint decision if necessary.

There are shareholders keen to meet you but airing things here does damage to the future business and just adds costs if the company is spending on legal fees to have them removed. Shareholders need to know the truth about what went on here.

[kimboy2] 10/12/2011 21:12

Hi Jeffian
1. They annonced the MRW contract in June 2009. However it was clarified on 27th July 2010;



To clarify, the contract with Morrisons was signed in June 2009, but was dated March 2009. The contracts runs to March 2012, but Morrisons has the option to terminate the contract six months early, in September 2011, provided they give MBL six months written notice. It should be noted that MBL has had a successful long-term commercial relationship with Morrisons.

As we know MUBL was not in a position to fulfill the last 6 months of the contract.

2. With regard to stock you will need to know what the actual contracts stipulated. MBL was in breach of these contracts by ending it early due to loss of credit lines.

3. They didn't say employees should transfer under TUPE. They said;

Discussions with Morrisons and its new supplier continue regarding those employees who will be in scope for TUPE (Transfer of Undertakings (Protection of Employment) Regulations).

IMV it was always unlikely that many would transfer unless the new supplier bought out MBL.

4. I read the U/X deal as them having invested £2m into the company. However it can be read either way. I am in no doubt that they did not want to specify the details of the deal. They were being heavily criticised for putting £2m into such a company without the full details being known.

The cash was paid to Allan Livesey and John Pickles.

No sign of TA joining the board or the £100k.

There is also no sign of MBL getting any money for it's stake. Then again I suspect that Livesey has come to the calculation that he will get a better deal from the administrator.

[jeffian] 10/12/2011 16:20

Judgement,
My point was not that "With most weak supply contracts, I'd think there is plenty of scope for either party to wriggle out" but that very specific things which they issued to the market via RNS (and on which investors would have made decisions to buy, hold or sell) turned out not to be true.

* "a new 3 year contract with Wm Morrison Supermarkets plc ('Morrisons') for the supply of Morrisons entertainment into 2012" ended within 18 months. As we now know, there was a break clause, but there was no reference at all to that.

* "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". Well it didn't did it. Why not?

* MBL said that employees working on the Morrisons supply contract should transfer to the new supplier under TUPE, but many did not, leaving MBL with a higher redundancy bill than anticipated.

* Any reading of the announcement of the U-Explore deal would have made the assumption that MBL had "invested" £2m cash in the business. They didn't; they gave £2m cash to one of the Directors for his existing shares in the business meaning that no new cash was invested into the business at all. The supposed "fees for the management services that MBL provides, amounting to £100,000 in the first year" have not, I believe, been paid.

And so on and so forth. What integrity does the RNS service have if statements which are designed to put the market on an equal footing and are potentially price-sensitive are not worth the paper they're written on?

[davidosh] 10/12/2011 15:15

I spoke to another shareholder yesterday after the results and he said that in the interests of shareholders his plan was to arrange a meeting of shareholders and all those who are NOT shareholders but clearly have a reason to provide information of whatever kind to the shareholder group. He said he was prepared to have the meeting at a solicitors office so that guidance could be given to all parties on the way forward.

Any thoughts ? Should I request that they make this offer public by personal RNS ?

[judgement] 10/12/2011 13:31

jeffian, if the contract's rubbish (as I'd guess it is), you probably can't do much about it. With most weak supply contracts, I'd think there is plenty of scope for either party to wriggle out if the other party isn't performing.

Ex-employees should remember that despite what their employment contract states, they have whistle-blower protection. If they feel they don't have the financial resource to take action against the company, perhaps they could speak to a lawyer appointed by a shareholder group?

It would appear reasonable to check related party transactions in any stock disposals. Any such transactions (announced or otherwise) would probably need to have been checked for fair value by an independent authority, for the protection of the directors. Clearly a company director who has received any recent bonus payments may not be considered independent, and may not be an authority. Can MBL demonstrate that the transactions with CableTower Ltd and Media Sales Direct were independently checked? Were the competing quotes they received from a sufficiently wide, competent, and competitive range of organisations (two or three quotes from non qualified sources is unlikely to be sufficient). I would think there would normally need to be a very good reason for choosing to deal with a related party, over a non-related party, since the risk is high, and there is a burden of proof that the transactions were in the best interests of shareholders (excluding the related parties).

I'm not a lawyer and this is only my opinion.

[jeffian] 10/12/2011 12:30

Could well be the case. They don't seem to have a business left. I have been asking, since the first occasion when events seemed to depart from previous RNS statements, what the Morrisons' contract actually said and I would dearly like to pursue this in the aftermath of whatever happens. From the length of the contract, through to the responsibility for stock and TUPE costs for employees etc., the actual outcome seems to be miles away from what we were told. As RNS statements are there to give investors a true and fair picture of their company, the regulatory authorities might well be interested in the apparent discrepancy between those statements and reality.

[timesmoney] 10/12/2011 00:41

The interims are confirmation, if we needed it, that they don't have a clue what's going on. PC states the losses are as expected and due to the Morrisons loss. Why then were they not provided for at the year end if this was all known and expected.
The morrisons stock issue appears to have been resolved at a fraction of the value that the directors assured us was guaranteed!
My guess looking at the cash position Sept is that they ill run out of cash in March if not before. Game over.

[judgement] 09/12/2011 21:42

"Debt free status has been maintained"


At least we can be confident that will remain the case!

[masurenguy] 09/12/2011 08:07

RNS Number : 6587T
MBL Group PLC
09 December 2011

Unaudited Interim Financial Statements for the Six Months Ended 30 September 2011

The Board of MBL Group plc, the UK distributor of home entertainment products, announces its interim results for the six months ended 30 September 2011.

Key Points

· Sales decreased to £15.7m (2010: £71.1m)

· Loss before tax of £7.2m (2010: profit £0.7m)

· Loss per share for the period of 43.9p (2010: profit 2.9p)

· Total current assets of £9.3m (2010: £33.9m)

· Settlement in principle agreed with Wm Morrisons plc regarding contract termination

· Debt free status has been maintained

· No dividend payment is proposed (2010: 7.5p per share)

· Business downsizing continuing

Post Balance Sheet activities

· Global Media Vault Limited and MBL Guernsey PCC Limited sold to Sainsbury's Supermarkets plc for £1m

Peter Cowgill, Chairman of MBL, commented: "The Group has experienced a challenging six months in which it has been managing the repercussions of the sudden loss of 79% of its business. During this period, a substantial downsizing has occurred and post the period end two subsidiaries, Global Media Vault and MBL Guernsey PCC, have been sold and the activities of one subsidiary, Outnow Home Entertainment, have been discontinued. The Board is committed to stabilising the business following the damaging events of earlier this year and we shall provide an update on headline performance in late January 2012......At 30 September 2011, the Group had a positive cash balance of £1.6m and remains without any third party financing. The Group remains in the position of securing the majority of its product supplies through the payment of cash in advance. It is considered, by the Directors, that the Group has sufficient working capital available to manage the business through this difficult year.....The performance of the Group for the first half of the financial year has been challenging and the loss incurred has been consistent with management's expectations, given the unfortunate circumstances of the period. The Group will provide
an update on headline performance in late January 2012."