Mercia Asset Management Share Discussion Threads

[columbarius] 16/7/2020 11:10

Maybe coronavirus has something to do with the decline in NAV, rather than an unsuccessful acquisition as you suggest.

[weatherman] 16/7/2020 08:25

I hope that the stock price recovers and that the management has learnt the lessons of the past. I continue to hold in the hope of a recovery of 25% to sell at breakeven. Like other investors, I saw a discount to nav, and hope for growth in nav, and a narrowing of the discount. But it hasn't materialise. Note, their FuM is near £800m, and their target £1bn. So there may be further dilutive offers in the near term. Now it is true that the actual nav is probably closer to 40p, including FuM business, but when will that be realised in a revaluation?

Read carefully """During the year the Group made substantial progress...through the successful placing and acquisition in December 2019. Acquisitions compress time and successful ones enhance shareholder value [really? when stated portfolio nav has declined from 41.6 to 32.1p]. The early signs for Mercia's most recent acquisition are encouraging [how?].

Since its inception, Mercia has been clear in its determination to trade profitably, so that its annual revenues exceed the total operating costs of the Group. The key to reaching this objective is twofold - continuing to increase the quantum of funds which the Group manages on behalf of third-party stakeholders, whilst, at the same time, maintaining control of costs."""

For me this is the wrong strategy - I don't mind coughing up for new shares to invest in new start-ups, if it keeps nav the same, or we see growth in nav, but at present we haven't seen any benefit from the new strategy. We need to see evidence of enhancing shareholder value by a rise in the stock price.

[p1nkfish] 15/7/2020 14:27

Delivery will cover a multitude if sins.

[wan] 15/7/2020 14:17

PI's probably think that management need to continue to get, loud and clear, the message regarding the lack of tolerance for the slightest element of past mistakes (hence it is repeated). To be fair, management do need to deliver and prove that the past is the past. Tangible delivery, such as what Pavey Ark is describing should certainly help shift sentiment!

There does appear to be indications of underlying improvement and change. And I am hopeful that something meaningful enough will be delivered.

[pavey ark] 15/7/2020 13:22

The only "trick" they are likely to pull is a substantial increase in NAV and profit....at least that is my expectation and my reason for being invested here.

Not sure why you and others are invested here but regardless of why you are invested surely you can see that the pointless a weary repetition of some perceived massive slight is incredibly annoying.

Being as polite as I can I would suggest you sell up and just move on or concentrate your efforts on evaluating the company and its management as it exists today.

I for one would welcome any comments from current shareholder based on recent/current events.

[weatherman] 15/7/2020 12:09

The NAV figures are taken from the accounts. I appreciate that is not the whole picture, because the FuM business has a value also, but if they repeat this 'trick' then the downward trend will continue.

[weatherman] 15/7/2020 10:39

The company issued a whole load of new shares at a low point to buy another fund, and didn't include private shareholders, which led to their holdings being devalued.

This is why net assets per share 2020 32.1 pence, versus 2019 41.6 pence.

It will take a while for confidence to recover.

[wan] 15/7/2020 10:38

A well put and considered post PA (and not just because you mentioned my name).

[pavey ark] 15/7/2020 10:11

As has been said, these are excellent results.

just a quick recap:

Net assets- Net liabilities = £25m (always the first stop for review of results)

Investment portfolio £87m or equal to ENTIRE MARKET CAP

Investment portfolio at £87m is the most conservative valuation imaginable (see wan's recent post on the potential value of ndreams.)

The portfolio was valued on the 31st of March ...just about the lowest market valuation you could get

The Native Antigen sale should give some clue as to the value of OXGENE (hint : it is worth much more than the current valuation)

The next three on the list look ripe for serious up-grade.

I don't know much about the fund management side of things but it is valuable and seem to be going well..I could go back and get figures from the IC article but you must get my drift by now.

An awful lot of mindless , repetitive, nonsense spouted here but the results trump all of that.

I suspect that if Simon Thompson hadn't thrown a hissy then he would be waxing lyrical about these results and without that private investors will have to do their own thing.......hmmm....not hopeful.

Declaration of interest: bought more yesterday and this now accounts for 9% of my investments ....happy and willing to wait but a very large disposal from the direct investment portfolio could/should wake people up.

[p1nkfish] 15/7/2020 08:57

Does it also make it easier to make fake news that can't be detected?

[weatherman] 15/7/2020 08:42

Is that fake news? :)

[p1nkfish] 14/7/2020 12:51

That attitude is the managements saving grace and a bit of Northern grit. Missing elsewhere but we need more if it.

[p1nkfish] 14/7/2020 12:12

Yes. That is one example I can applaud. Good.

[columbarius] 14/7/2020 11:49

A very fair and comprehensive account. I feel more patience is required but that is solely due to the impact of covid-19 and I applaud management for their handling of the situation with wisdom and compassion. Unlike many companies Mercia will not be a financial drag on the economy, but will actively support the recovery.

"As a result of our increased active engagement with all portfolio companies across our asset classes, no staff have been furloughed. Furthermore, given our strong liquidity position, the Group has not needed to seek any government-supported debt funding.
Those of us who have been through previous sharp downturns in the UK economy, if perhaps not as stark as this one, will know that the survival of any company, large or small, new or old, often depends on two things - the strength of its balance sheet and the quality of its people. At a time when cash is king, Mercia is blessed in having a very strong balance sheet, with approximately £30million of unrestricted cash, combined with an extremely capable and experienced leadership team, all of whom are pulling together in the same direction."

[robsy2] 14/7/2020 09:25

Super set of results.
32p of assets of offer for 20p now , huge discount. nearly 40% Mature portfolio of investments with some showing real potential.
profitable underlying FUM business generating cash and opportunity for MERC.
Network that allows them to plug into opportunities across the regions.
received 54m GBP through partnership with British Business Bank.
290m GBP of unrestricted cash to invest.
30m GBP of their own money to invest.
Ready to invest at lower prices.

It seems to me they are progressing well.

[p1nkfish] 13/7/2020 13:29

PA - this needs a catalyst to shift it. Management changes could well be one of those catalysts, or a real demonstrative management attitude change.

They are responsible. Look at that trend!
Don't blame the market.
Convenient smoke screens.
The market has memory.

[sev22] 13/7/2020 13:06

Trading View's technical analysis based on the moving averages has thrown up a 'Strong Buy' this morning. The share price could break out at around 23.0p if results are well received by the market and private investors tomorrow.

[pavey ark] 10/7/2020 17:20

OK, I get it but so does everyone else.

You bought more when it bottomed out yet continue...and I mean continue...to go on about the management being incompetent.

All I'm suggesting is you give it a rest.(with the emphasis on suggesting)

We can all make up our own minds especially when our money is at stake and I'm pretty certain I wouldn't invest if I shared your views but thanks for the heads up and I will keep a close watch on things here.

[p1nkfish] 10/7/2020 17:09

I hold at a very decent average price - was lucky when it bottomed etc.

Fully aware of incentives but they were so unaware of their business they set option to high first time, reset them too high second time. Now we are here.

Being underwater might encourage them to drive the business but no surprise if they just manipulate and re-issue. That is not completely honest.

I hold as I like supporting SMEa and portfolio not bad. Just not a fan of the management who have been unable to make any money in the options for themselves. In other words they are hardly driving the business. Just floating and the wider market drives it. Why pay them.much for that?

[pavey ark] 10/7/2020 16:59

pinkfish, I did watch the recent video with the CEO and must say that I didn't warm to him but that is surely not a deal breaker.
You seem genuinely surprised that these people are out to make as much money as they can....hint: that is the way of these things.
Every company I am invested in the management are overpaid and receive overly generous share options (I suspect that this is the case for EVERY COMPANY !!)

I don't know if you hold here or lost money but I (we?) get the message ....you don't like/trust the management but take a look at the number of times you've said it.

On a more general (positive) note...I bought here because of my view that the direct investment portfolio was/is massively undervalued ....nothing has changed my opinion and this weeks announcement only shows me how undervalued these holdings are.

[sev22] 10/7/2020 16:38

A 500,000 buy delayed from earlier today just shown on the listed trades, ahead of the results on Tuesday.