Melrose Industries Share Discussion Threads

[meanwhile] 01/4/2018 11:37

getting,

Melrose
News Releases 06 July 2016 07:00
"Proposed recommended acquisition of Nortek, Inc.
For the 12 months ended 31 December 2015, Nortek reported revenue and headline(2) operating profit of $2,526.1 m and $220.1 m respectively, with North America representing 90% of 2015 revenue."

[sogoesit] 01/4/2018 11:31

Post 3225 interesting numbers used for comparison which got me thinking but NTK 10-K Filing in February 2016 for FY to 31 December 2015 says last full year was a Net Loss of US $26.7m.
Cannot figure how "Operating Profit" of $220.1m arises.
Operating earnings were $85.4m less Interest Expense of $100.7m makes "best case" number of a $15.3m loss. Adding back Intangibles Amortisation makes best case "Operating Profit" of $52m.

Good luck with the "numbers game" fellas; not to mention the "mind games". Lol.

Happy Eater!

[brexitplus] 01/4/2018 11:11

Mucking out the lambing shed. Usually. !!!? Only for a couple of weeks around this time of year I think, if at all. They just need some fresh straw. Cows daily.

PS. My b-i-l would love to think someone thinks he is influential!!! Actually I am admitting I don’t know it all and do ask for advice, unlike some people.

[meanwhile] 01/4/2018 11:04

Yeh, whatever, on your Cotswolds bit.

I don't want to give, like you do, the names of influential people who assist in my investment methods, other than to say that I have occasionally consulted the sheep farmer next door, who I can usually find in the evening mucking out the lambing shed.

For God's sake, brexit, stop trying to impress us. I think you maybe don't know you're doing it. We're not interested.

[brexitplus] 01/4/2018 10:48

Meanwhile, you are proving yourself on a par with minerve (not a compliment) and embarrassing yourself.

[meanwhile] 01/4/2018 10:38

Oh, how modest you are, and how ill-informed I am.

I'll bet the sheep farmer next door to us also thinks Gloucestershire = Cotswolds, although I've never spoken to him about it.

[brexitplus] 01/4/2018 10:33

“Sage of the Cotswolds” might be apt but in fact we live below the Cotswolds. Many ill-informed people make the mistake of thinking that Gloucestershire = Cotswolds.

Actually, while I can read company accounts perfectly well, but when investing I also ask my brother in law, who is Finance a Director of a shipping company, to look through them as well. He is better at the small print. And sometimes we invest in the same shares if we agree. Melrose is one we agree on.

[meanwhile] 01/4/2018 10:23

In 3225, I said "The figures, as usual, speak for themselves but of course different people will arrive at different conclusions about what they believe these figures indicate."

We have one conclusion lodged already, from brexitplus, 'the sage of the Cotswolds'.
His conclusion "Too many numbers!!!!"

[brexitplus] 01/4/2018 10:17

Oh, so patronising!!!!

[meanwhile] 01/4/2018 10:05

Yes, brexitplus, there are too many for you, but others, like Minerve, will make some sense of them.
But on a basic level for your own use, these numbers, translate, with deductions, to net profit, this being the money that the company retained for its own use. Some of this is paid out in dividends. With dividends, we buy things.
The profit figures also determine the movements in the share price, up and down.
If we sell when up, we make money. With this, we buy things, for ourselves or for others.

This model is an alternative to yours - 'the blind hope theory of investment'.

[brexitplus] 01/4/2018 09:41

Too many numbers!!!!

[meanwhile] 01/4/2018 09:37

Here are some numbers, all taken from Melrose reports, annual, interim & a Nortek takeover Proposal from Melrose in July 2016.
These 2 sets of figures are Sales Revenue and Headline Operating Profit for various time periods for the Nortek part of Melrose.

For the last full year of Nortek, 2015, before the takeover :-
$2526.1M $220.1M
(£1943M £169.3M at a £/$ rate of 1.3, my choice for comparison purposes only)

For the 4 months, Sept-Dec incl. 2016
£642.9M £88.3M

For H1, 2017
£987.4M £146.8M

For H2, 2017
£885.8M £139.6M

The figures, as usual, speak for themselves but of course different people will arrive at different conclusions about what they believe these figures indicate. To me, these figures show that the improvement at Nortek was all achieved in the first 4 months and since then there's been little improvement. According to Melrose, this has been achieved by cost cutting and debt interest payment reductions.
Presumably the gains from 'nurturing', 'R&D' & 'other investment' are yet to come.

[brexitplus] 01/4/2018 09:23

I see Will Hutton is having a rant this morning in the Grauniad with lots of misinformation.

[mayers] 31/3/2018 21:24

Thank you Brexitplus. Well, we will see.

Enjoy Easter in the fullest sense.

[brexitplus] 31/3/2018 21:20

Mayers, as you know Melrose are the holding company, setting the targets, capital allocation and working with the management on strategy, and if there was any deficit in understanding of the market it was the Brush management. Likewise, Melrose will not be performing the day to day running of GKN. They allow the management to do this.

I have no worry whatsoever about Melrose. I had great worries about Stevens and a Sclater.

[mayers] 31/3/2018 21:13

bexitplus

Thanks for your comments. It does sound from what you say that MRO were not quite alive to some engineering changes and that was what I was querying in relating to the acquisition of GKN, that it wasn't just an accountancy exercise.

Don't however forget that it is Easter.

[minerve] 31/3/2018 21:02

gettingrichslow

I would like to know the things that I have predicted which haven't come to pass. Please quote me. I haven't predicted anything and I knew that the arbitrage clan would be coming into this heavily - you only need to look at the RNS feed. I knew that, most likely, Melrose would win. Why else would I have held the shares until now?

My entry in the little competition you ran was offered by someone else, not I, remember?

[brexitplus] 31/3/2018 20:36

Meanwhile. You keep purposely misrepresenting what I say, particularly re cars. Try reading the post again.

Getting, yes I agree. I wonder if Nigel Farage has been in touch yet.

And having thought about m’s business, I wonder how much more successful it might have been with Melrose improving it!!!

[gettingrichslow] 31/3/2018 20:21

Minerve, given your incredible experience and success, isn't it amazing how pretty much everything you've predicted on this forum has not come to pass, usually the polar opposite. You even managed to come last in the competition!

[meanwhile] 31/3/2018 20:16

Well, getting & brexit, in a strange turn of view, I more or less agree fully with everything you've both said today, on MRO, GKN & whatever.
On MRO, so much so, that my wife & I have decided to incorporate your theories, postulations, calculations etc. into our future investment strategy. I hope you are pleased by this sudden about turn.

A 2nd matter I would like to clear up. When brexit talked/boasted about his shares being worth a car, I had no idea he was referring to a new Aston Martin. When I responded about buying a car with the interim dividend, I was thinking more of a Nissan Micra or equivalent, say 2008, a bit of work and MOT being required, some rust spots, nothing much to worry about. So there is just no equivalence. So that's cleared up then.

[brexitplus] 31/3/2018 20:12

Mayers. Brush is four separate businesses of which three are doing ok. It is the two-pole turbo generators that are suffering. Melrose bought FKI when there was no indication of a change in the market for these and they actually produced a record number before alternative energy/wind turbines took a large part of the market very quickly.

To be fair to Melrose they have stayed with Brush, and continue to do so. I dare say normal private equity companies, and possibly a GKN, would have closed that side of the business. Melrose are attempting to redesign the business and make it more profitable. Brush has no pension deficit and a operating margin better than GKN.

Something to be admired I think.

Others might disagree!!!!

[mayers] 31/3/2018 19:46

Hello friends

It sounds as if a spot of group therapy is in order :-) Go easy.

The matter that troubled me most was the redundancies at BRUSH (please see my original post 2280. Ignore the medical nomenclature comment.). It has been said that Melrose do not require any advanced knowledge of engineering and that the takeover was purely a managerial matter, but it was the failure as I understand it, to recognise the changes in the need for turbo-generator engineering which led to the failure of BRUSH. I confess I am somewhat out of my field here but this point seems to me not to have been made sufficiently in press coverage.
The future with GKN is not going to be easy in many ways and I suspect quite unlike MRO's previous triumphs. I hope the triumvirate are on their knees, so to speak, at this Eastertide.

Enjoy your Easter walk MEANWHILE and best wishes to you all at this time of renewal even if we may differ.

[brexitplus] 31/3/2018 19:30

Minerve

That’s something to be really proud of.

So why are you so obnoxious and foul mouthed, and look down on everyone here.

With all your success and money I would hate to be you.

[minerve] 31/3/2018 18:56

brexitplus

I doubt Melrose ever visit this circus unless they want a laugh.

They are not captains of industry. Captains of industry create wealth and are masters at growing the top line. Melrose just know how to extract and transfer value, and yes they do it well, but wealth creators and captains of industry they are not!

[meanwhile] 31/3/2018 18:16

With such a positive attitude, and with an acute sense for seeing envy, greed & jealousy in others, I think you'll all do very well.