Mereo Biopharma Share Discussion Threads

[lonrho] 19/11/2007 08:30

the release of negative goodwill to profit in one year is not good accounting practice,they have now adjusted some of this back as a prior year adjustment to fair value.The bit i dont understand is how a reduction in negative goodwill of 6million only produces an adjustment of just over 2 million,Also cash flow is horrendous.

[deanroberthunt] 19/11/2007 08:29

I'm only still holding for 2 reasons;

1. They're in my ISA
2. The divi

very poor show....bet Mr Naked's out!

[mick33] 19/11/2007 08:29

Tried to sell part of my holding this morning,but halifax sharedealing are hopeless ,will not sell at current levels ,so looks like im in for the long haul,dubious management and all.

[taffee] 19/11/2007 08:27

no,but mm does own almost 20% of the shares,has signed goodness knows how many licences and is expanding the business.The ysl termination was always going to be difficult and perhaps mr morris regrets not just 'coming out with it before'

Remember that turnover is twice what it was 3 years ago when it was mainly ysl and the shareprice is lower

[marben100] 19/11/2007 08:22

Well, these results hardly look good. I am actually rather angry as it appears to me that MM has been "economical with the truth":

a) He expressed confidence at the AGM that the Hardman forecasts would be met. I find it hard to see how they can be met now. At the time of the AGM, I understood that the business had good earnings visibility - how can the board not have known that the interims would be poor? If they feel that the year-end forecast can still be met, why haven't they said so? If they don't why did they express confidence earlier?
b) Thanks to mart12345 for spotting that "reserves adjustment". Whereas last year's reported profits were inflated by the "fair value" adjustment. The adjustment now appears to have been quietly reversed (and more), without any impact on the P&L. Just as well, or we'd be showing a hefty loss - though the whole matter is immaterial to the true profits.

After the board taking massive bonuses last year, I feel throughly "done over" as a shareholder and will find it hard to trust MM and the board again. I have disposed of a substantial part of my holding this morning, despite the lousy price on offer. Given the current SP, I will retain the rest because, despite my annoyance, I do think MM's strategy is likely to succeed in the long run and I would hope to get a better exit within a year or two.

I'd be most interested if anyone thinks there are any errors in my assessment.

Regards,

Mark

[jimelson] 19/11/2007 08:15

Old Mr Morris has some answering to do.

[warala] 19/11/2007 08:12

Wise man.Glad i had the nerve to sell on opening and also did not buy any more on Friday.Glad i had the bottle to take a loss which is now much more if i had have held on.Good luck to all long term holders eventually you will be rewarded.

[deucetoace] 19/11/2007 08:12

Writing back the value of customer relationships turns last years notional 23p into the real 15p that it always was. I wonder if Mr Morris might return some of his last years bonus to compensate. From this write back and the lack of a warning of these results I have no faith in the management of this company - I won;t hold shares in such a company (albeit that the full year will clearly see a recovery from these levels) so have sold.

[jimelson] 19/11/2007 08:09

yeah exactly
-15.5p now

[taffee] 19/11/2007 08:09

once the ysl comparables are gone...its a growth story again...unfortunately in 6 months time

[jimelson] 19/11/2007 08:07

Thought it looked suspicious. glad i stayed out. Good long term still i reckon

[momentos] 19/11/2007 08:01

Looks to me as if UK margins were very squeezed on Ungaro launch. They had to discount to sell it. GIven that Greenmark is supposed to have been same-ish (HY 12m pbt 1m?) this suggests UK apparel at 13m but at low / non existent margins.

Perhaps to be expected at a launch, but they need to get the margins nack up quickly. UK apparel does compare favourably with history (ex bounce year) YSL annual sales of 25-30m so perhaps it is just a blip.

Holding for long term.

[muffster] 19/11/2007 07:55

Get shorting

[warala] 19/11/2007 07:48

Early market shows 93p to sell.

[mart12345] 19/11/2007 07:47

The statment below was taken from the interims and isnt good is it? (i am no accountant)

"6. Reserves
On the acquisition of Greenmark Limited completed in the year to 31 March
2007, the value of customer relationships of Greenmark Limited was
provisionally valued at #8m. This figure has now been reviewed and reduced
to #2m. The resulting adjustment of #2.124m has been set against reserves."

[taffee] 19/11/2007 07:39

should still see healthy profit for the year ....turnover was higher than expected and growth story is on.....and in emerging markets.

[cosnova] 19/11/2007 07:38

In line with my expectations and with YSL no longer in play the turn-over is very respectable, and looking on target for £70mil for the year.

[mick33] 19/11/2007 07:36

So this is why the share price has been plummeting ,some people have known about this for a long while and have acted accordingly.

[taffee] 19/11/2007 07:34

if you look 2 years ago turnover has doubled...compared to recent fy results(a one off imo)it looks bad...but again..is it in the shareprice?

[polzeath] 19/11/2007 07:32

I'm afraid it looks bad. YSL has NOT been substituted by other revenue and profit streams.

[momentos] 19/11/2007 07:30

UK 23m (but clearly at squeezed margins)
ROW 4.1m - looking nice and healthy...
US - Ugh - T/O down to 5m (GBP2.5m) USD on HY.

If you look at the UK turnover figure it suggest potential. Half is Greenmark.

I had

US 4m PBT Nil
ROW 4.1m PBT 300k
UK - Non Greenmark 12m PBT 1.5m
Greenmark - 13m PBT 1.5m

So I wasnt too far out on turnover!!! US / UK Missed my turnover / profit ests, ROW outperformed.

Need to read again to spot the reasons for UK margin squeeze and whether it will significantly improve.


Turnover analysis by geographical origin of sales:

6 months to 6 months to Year to
30-Sep-07 30-Sep-06 31-Mar-07
#'000 #'000 #'000
United Kingdom 23,173 29,967 75,195
Europe & rest of world 4,159 3,366 6,835
North America 2,519 5,227 8,504
-------- ---------- ---------
29,851 38,560 90,534
-------- ---------- ---------

Geographical analysis of profit on ordinary activities before taxation:

6 months to 6 months to Year to
30-Sep-07 30-Sep-06 31-Mar-07
#'000 #'000 #'000
-------- ---------- ---------
United Kingdom 250 4,024 9,191
Europe & rest of world 831 63 (953)
North America (628) (110) 85
-------- ---------- ---------
453 3,978 8,323
-------- ---------- ---------

[kevpreston] 19/11/2007 07:21

do you hold manby MPH Taffee?