Mercia Asset Management Share Discussion Threads

[p1nkfish] 01/3/2021 16:35

30p+ soon?

[p1nkfish] 01/3/2021 16:35

Excellent sale and TU.
Well done
I can now forget Sci Warehouse!

[turbocharge] 01/3/2021 16:17

Prospects for long term holders looking good!

[morkandmindy] 01/3/2021 16:15

This screams 'buy' to me. You can buy (at present) at 27.24p.

I've taken a nibble.

[weatherman] 01/3/2021 16:13

NAV of investments goes to ~37-38p - the other part is valued at ~5p. Total value of ~43p against 27.5p now. There has been no covid revaluation of this stock despite a number of investments in the biotech sector - such as Oxgene.

[cheshire man] 01/3/2021 16:10

"Group's full year adjusted operating profit* is expected to be materially ahead of current consensus forecasts". :-)

[pavey ark] 01/3/2021 16:08

I'm afraid I've always been a bit ahead of the market here and this just puts me in profit.
£16m valuation now £30m so simple arithmetic puts that at a 3p rise ....but.... the £16m was never in the price to start with !!!

So the direct investment portfolio that was always undervalued and has always been the big attraction for me has now gone from undervalued to ridiculously undervalued.

There should now be a serious increase in dividend.

[weatherman] 01/3/2021 16:02

Good price for Oxgene - profitable sale that boosts cash reserves and NAV.

[fredfishcake] 01/3/2021 15:56

Strange time of day to release a trading statement....still, at least it looks a good one - presumably they were worried that news of the disposal would leak so couldn't wait til tomorrow.

[p1nkfish] 09/2/2021 15:38

26.5p broken to upside. Ideally close above there then 28p next, looking useful.

[srichardson8] 09/2/2021 15:05

quite correct and very annoying. for the record I have rejoined ShareSoc to see some of their useful interviews and follow their campaign for retail investor rights. Anyway, back up over 25p after a very long wait and I meant to add earlier that when I first met and then invested in MERC they told me their NAV was er 'really' 50p.

[redartbmud] 08/2/2021 19:25

The problem is one of regulation. In order to make a placing to PI's it is necessary to produce a prospectus and that is time consuming and expensive. Placing with institutions is quick and cheaper.

[srichardson8] 08/2/2021 19:01

I know this is pedantic but
1) My comment was really a general comment regarding the tendency of companies to carry out accelerated placements at discount to institutions only leaving individal investors to takwe the dilution in the face.
2) In fact the discount was 25p to the previous close of 32p. Well that is biggish discount but given the size of the issue (£30mn, 120mn shares) not entirely mad. It was clear management hoped the acquisition would be a game changer. After the announcement the share was trading at 28p which is about what one would expect. I think what really killed the price was the sell recommendation from Simon Thompson on Dec 9th. Up to then he had been keen on the share. On that day it closed below the offer price at 24p having been 27p at the previous close. Shares which go below new issue prices create a big psychological negative. ST had and still has a pretty big following and for whatever reason his advice that day has proven to be good advice to date. Like a lot of private investors he felt let down by MERC.
I do not think that would have happened if stock had been offered to private investpos in the placement. But that is history. And as Henry Ford said....

[weatherman] 07/2/2021 19:57

It doesn't matter to me whether they shut private shareholders out, you could buy lower in the market afterwards. The erosion of shareholder value came by issuing shares at a steep discount to NAV, thus undermining the long-term value of one's holding - which is why we are at 25p not closer to 45p.

[varies] 07/2/2021 19:42

srichardson8
I agree with you entirely.

[srichardson8] 07/2/2021 18:12

The problem is the conflicting interests. Companies wishing to raise money quickly and painlessly, brokers wishing to maximise placing profits and avoid annoying admin in dealing with retail investors, and the latter not wishing to be diluted. Personally I can see no reason why this could not be sorted out with a quick institutional placing to cover the cash requirement with a shoehorn follow up in the form of a quasi rights for private investors. I think the share society may be lobbying for something similar..perhaps someone could enlighten me...

[p1nkfish] 07/2/2021 17:27

Run up towards 28p+ due imho. Need to break 25.2p on the upside and a run through 26.5p will be rewarded.

[varies] 07/2/2021 17:08

Oxman
I understand your resentment and I hope that whichever investment you pick in preference to MERC will prove rewarding.
If you will forgive this hackneyed phrase, Time is a great healer. It make take a few months longer for many disenchanted investors to be reconciled but the institutions given the privilege (denied to the rest of us) of subscribing at 25p have only a very small profit to show for it.

[its the oxman] 06/2/2021 22:11

Hope your right but personally I'm happy to be out of Mercia given their regard for shareholders. Don't be surprised if you get the same treatment again in future from another opportunity that has to be seized.

[varies] 06/2/2021 20:25

It is a long time since I looked at MERC's purchase of NVM and I see that this took place in Dec. 2019.
MERC paid £12.4m in cash and issued the vendors with 16.8m shares with a value of £4.2m using the placing price of 25p.
It also promised deferred consideration of £6.3, payable in equal instalments on the 1st, 2nd and 3rd anniversaries of the purchase. I think that MERC has the option to make these payments in shares.
The deferred consideration is conditional on most of the NVM funds transferring to and remaining under MERC management.
The price of MERC shares before the announcement was 32p.
MERC raised £30m to pay for this purchase at 25p but did not allow its own small shareholders to participate in the placing. This upset many of us and scored a boycott from Simon Thompson still in force today.
Whilst sympathising with this reaction I believe that the course of action followed by MERC was in the long term interest of its shareholders in that NVM was well worth the price paid and such an opportunity had to be seized .

[columbarius] 05/2/2021 23:51

I doubt Simon will mention MERC again and that's fair enough. Rather than let emotion get in the way of future decisions, far better to make a clean break and move on. I can't stand sellers who throw the toys out the pram then keep sniping at the company ad infinitum.

[weatherman] 05/2/2021 19:50

ST in IC has a look at a number of similar cos. (eg. ARIX) with big discounts to NAV - but doesn't go back to MERC.

[pavey ark] 05/2/2021 19:44

columbaria , I certainly agree with your summary.
I hold some MHC at 1.7p and 2.1p so in profit but I was there because of the hormone/pregnancy kit and the new venture has passed me by.
If it gets back to 3p I will sell and follow it through my holding in MERC.

The bio tech holdings in the portfolio must be getting looked at but there are any number of holdings that are set to go.

One substantial realisation and the share price will take off in a very big way.

[p1nkfish] 05/2/2021 19:42

Yes, what we do need to see though is some path to narrowing the NAV.