Mereo Biopharma Share Discussion Threads

[momentos] 12/10/2007 08:16

AS ORIGINALLY issued:

Special business

As special business to consider and, if thought fit, to pass resolutions 7, 9, 10 and 11 as ordinary resolutions and resolution 8 as a special resolution:

7. That the Directors be generally and unconditionally authorised to exercise all powers of the Company to allot relevant securities (as defined for the purposes of Section 80 of the Companies Act 1985) provided that:

(a) the maximum amount of the relevant securities that may be allotted under this authority is £2,265,000 [=45.3m shares!!] in nominal amount; and

(b) this authority shall expire on the day five years after passing of this resolution save that the Company may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the Directors may allot, relevant securities in pursuance of such offer or agreement as if this authority had not expired and all previous
authorities of the Company under Section 80 of the Companies Act 1985 shall cease to have effect.

8. That the Company be and is generally and unconditionally authorised to make market purchases (as defined for the purposes of Section 163(3) of the Companies Act 1985 of any of its ordinary shares in such manner and on such terms as the Directors may from time to time determine, provided that:

(a) the maximum number of ordinary shares hereby authorised to be purchased is 2,670,291;

(b) the minimum price which may be paid for an ordinary share is 5 pence;

(c) the maximum price which may be paid for an ordinary share is an amount (exclusive of expenses) equal to 105% of the average of the middle market quotations for an ordinary share as derived from the Stock Exchange Daily Official List for each five business days immediately preceding the date on which the ordinary share is purchased;

(d) unless previously revoked, varied or renewed this authority shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2008; and

(e) the Company may make a contract to purchase ordinary shares under this authority before the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority, and may make a purchase of ordinary shares pursuant to any such contract as if the said authority had not expired.

9. That the Directors be empowered to allot equity securities (as defined for the purposes of Section 95 of the Companies Act 1985) for cash pursuant to the authority conferred by resolution 7 as if Section 89(1) of the Companies Act 1985 did not apply to any such allotment provided that this power shall be limited.

(a) to the allotment of equity securities in connection with an offer of securities to the holders of shares in the Company in proportion (as nearly as may be) to their holdings on a record date fixed by the Directors (but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with problems under the laws of any territory or the requirements of any regulatory body or any stock exchange in any territory or in connection with fractional entitlements or otherwise) and to the allotment to other persons of equity securities not taken up by such holders pursuant to such offer; and

(b) otherwise than pursuant to sub-paragraph (a) above up to an aggregate nominal amount of £340,000.

and that this power shall expire on the conclusion of the next Annual General Meeting of the Company after the passing of this resolution save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry but otherwise in accordance with the above provisions of this power, in which case the Directors may allot equity securities in pursuance of such offer or agreement as if this power had not expired.

10. That a dividend of 0.45 pence per ordinary share of 1 pence each be declared, payable to shareholders on the register at the close of business on 12 September 2006 and be deemed satisfied by the receipt and retention by shareholders of the final dividend paid to them on 14 September 2006 with the intention that the prior payment by the Directors of such final dividend be approved, ratified and confirmed.

11. That a dividend of 1.5 pence per ordinary share of 5 pence each be declared, payable to shareholders on the register at the close of business on 1 December 2006 and be deemed satisfied by the receipt and retention by shareholders of the interim dividend paid to them on 22 December 2006 with the intention that the prior payment by the Directors of such interim dividend be approved, ratified and confirmed.

[taffee] 12/10/2007 08:14

marchpole is controlled by market makers....look what they did to the share when it hit 60p for no reason.

supply/demand out the window...if you believe in the company hold on,however, the market makers system is organised rip off imo

[pbracken] 12/10/2007 08:06

From the August IMS:

"The retail environment in North America continues to be difficult and sales by Moda America are lower than for the same 13 week period last year. On the positive side margins have improved as a result of Marchpole's sourcing capabilities."

I'm assuming Moda contributes about £8.5m in revenue and barely anything in profit, so the impact of this mini-warning is easily absorbed by the strong performance in other divisions. Is it weighing on the shares unduly?

[eagle eye3] 11/10/2007 18:28

marben,

I should have said downside risk and what is the up side

[dan de lion] 11/10/2007 16:43

It is to pass item`s 7,8,9,10 & 11 that weren`t put before the AGM for some technical reason.


"For technical reasons Resolutions 7-11 will not be placed before today's
meeting. An explanatory letter is being sent to shareholders and these
resolutions will be put to shareholders at an EGM which will be held at the
earliest possible date."

[wbjunior] 11/10/2007 16:21

marben what do you make of the EGM, have you any idea what its aboyt
thanks................wbj

[thefod] 11/10/2007 15:46

What was not discussed at the AGM which requires calling an EGM for, very strange. Is the company going to be taken private on the cheap?

[marben100] 11/10/2007 15:24

eagle eye3,

Anything I or anyone else posts regarding future share prices or earnings is purely opinion.

You have to form your own opinion based on the facts available to you.

how much could I lose

Everything. If Marchpole goes bust. You have to decide whether that is likely or not.

Regards,

Mark

[eagle eye3] 11/10/2007 15:14

thank's, a negative view from someone would be nice, to balance the 2 value's,
I added a few days ago, not so much how much I can profit, more how much could I lose,

[marben100] 11/10/2007 13:38

Hi wbj,

I think you're misunderstanding my point. I'm certainly not holding for a possible 24% return either.

I don't think it's likely that the shares will reach 142p BEFORE THE INTERIMS. If they do, without any news, I might be tempted to top slice those I bought recently at below 112p (for a 25% return within 2-3 months). I'd be retaining the bulk of my holding.

Anyway, not long to wait until the interims now :0).

Cheers,

Mark

[wbjunior] 11/10/2007 13:22

If I thought fair value today was £1.42 I would sell the lot as I would be holding for a potential return of around 24% and there is better out there......................regards wbj

[wbjunior] 11/10/2007 13:21

marben the fair value imv is £2.60 to £2.90 today, why they are not at that level beggars belief. We are half way through 07/08 therefore 0.5x19.8 + 0.5x26.3 gives f/c eps of 23.05p which equates to around 12 x earnings to reach my mid value range. If others want to reduce the value by discounting for various assumptions that's fine but I see things going along fine and hitting my target earnings, so that's my present valuation......................wbj

[marben100] 11/10/2007 13:00

wbj - Nardelli's question was what is the fair value TODAY - not when the targets are or are not achieved :0).

That's a tougher question.

[wbjunior] 11/10/2007 12:41

My view is range from £2.60 to £2.90 wbj
Targets being achieved, targets not met where we are now minus 10%

[marben100] 11/10/2007 12:40

Good question Nardelli,

If MPH hit the EPS forecast of 19.8p for this year and are likely to hit the 26.3p target for next year, then a PEG of 1 would argue for a P/E of (26.3/19.8)-1 = 30.

OK, that's cloud cuckoo land (perhaps) :0). Nonetheless, if they DO perform that well, even allowing for the MM factor/poor IR a P/E of 12 is hardly demanding. A P/E of 12 on the current year forecast of 19.8p = 237p. If we put a 40% discount (arbitrary, allows for fears over lack of transparency) in for the risk of them not hitting that target, that gives a "fair" price of 142p - and a hold at that level for me, as there is still substantial upside possible.

Of course a lot of that 40% disappears if the interms are OK & outlook is for at least in-line earnings.

Any other views?

BTW Cantors have put 40K on offer @ 113p today.

Regards,

Mark

[nardelli] 11/10/2007 12:22

ok guys, while we are all here waitig, what do you all think a fair value to mph is, TODAY,

[marben100] 10/10/2007 22:45

AFAIAA MPH have not changed their sourcing from Brazil. Having a long term relationship with suppliers to get the right quality is very important. However, I'd expect contracts to be in US$ rather than Reals. That's the usual currency for trade with Brazil.

Might be a tough round of price negotiations for next year, mind you.

[eagle eye3] 10/10/2007 18:01

greenmark was getting it's shoes from brazil, see exchange rate over the last 3 years they would be in trouble had they not sold out, if it is now sourced in asia by MPH the profit will be up, I might be mistaken but I remember reading greenmark guesstimates of 3 million on Hardmans , sorry 3.1 million shoes, however the braz real is up about 30% v usd, I think better than expected was used by MM

[dan de lion] 10/10/2007 16:49

Holding for the long term is not half taking a long time.

Been holding and adding for over four years now, back under water now!

[marben100] 10/10/2007 15:46

Deferred tax... ish, something I asked about at the AGM. AIUI its a theoretical liability, in the event that MPH were to sell Greenmark or any of their other acquisitions, based on the infamous "fair value adjustment". If they book the FVA, they have to book a corresponding deferred tax liability. Any deferred tax acquired with Greenmark would have been for similar reasons in the past.

The thing to note is that it's a one-off charge to the P&L, so best to just assume 30% (or whatever it is post-budget) on profits going forward...

...re those shares being dumped. Why not use some of that bonus to soak some up at a bargain price? Perhaps we should watch for an RNS :0).

[Edit: I suppose he can't do that yet, due to close period for the interims]

Obviously, if you're holding for the long term, what the share price does short term doesn't matter too much - except insofar as it provides opportunities for a top-up which I and several others took when it dipped below 112p.

[argy2] 10/10/2007 15:21

MM's work rate has never been in question. However his ability to spend shareholders money has in the past and looks to be an issue again.As long as he can produce profits and increase divis many will be content but not at the expense of the share price which is what most PIs are interested in.He needs to address that problem too by whatever means otherwise, value or not, investors will look elsewhere imho.

[momentos] 10/10/2007 15:20

Annual REport:

Turnover of Greenmark Limited for the period from acquisition to 31 March 2007 was £3,208,000 and the profit before tax was £255,000. For the period between 1 April 2006 and the acquisition date, Greenmark Limited had sales of £21,178,000 and a profit before tax of £1,824,000.

Totals: Sales: 24m pbt 2m in 12 months to 31 Mar 2006. Vs 24m / 3.2m y/e 31/12/2005.

Dont see where Morris himself got any 3m in this. But not a bad deal by the co as we got a company turning a 2 or 3m pbt for about 3.6m.

Can anyone explain the deffered tax liability position, as I dont fully understand it. THey have also taken on a deferred tax liabilty of 2.4m from Greenmark - hoe much can this be considered as a further amount of consideration (the balance sheet was otherwise pretty much flat foloowing the cash removal prior to sale).

[marben100] 10/10/2007 15:01

Re Cantor's - yup I'm sure they've got far more than 50K to sell. They wouldn't be bothering otherwise. I guess they take the view that they might as well put a bit of "bait" in the order book and see if anyone bites (so far, no-one has).

That's the reason for the depressed SP: there simply aren't enough buyers. If MM want to see a fair SP, he has to do two things: 1) Produce decent interims with a healthy sounding outlook; 2) Get more "investor friendly". As jamesjoel said, MPH's IR doesn't exactly make one feel happy to invest.

I doubt that 2) will happen but hope that 1) will be enough to give the share price a decent lift, if it happens. It doesn't help that MPH is classified as a retailer, when retailers are somewhat out of favour. It is interesting to note that CCT, who's business model is similar to MPH's (but based on toys, rather than apparel), is classified in the "media" sector.

Cheers,

Mark