Mereo Biopharma Share Discussion Threads

[retiringtype] 28/6/2007 13:58

If I read the numbers right, this company is generating a lot of cash from operations (ignoring the working capital movements) and would be on track to pay off its overdraft and debt in the next 12 months if there were no further acquisitions. Its market cap + debt is around 6 x EBITDA and it looks significantly undervalued. I was a little surprised that the dividend was not increased - maybe they intend to use buybacks to maintain a good debt/equity balance.

[marben100] 28/6/2007 13:41

Just analysed the figures in a bit more depth. I see that there was a similar "fair value gain" in last year's finals too. The published figures show a reported EPS for this year of 22.8p against 13.2p last year. If we adjust both numbers to deduct the fair value gain the corresponding numbers become 15.0p for this year and 9.9p for last year - so still a 50% gain over last year.

There is every reason think EPS gains can continue this year, given disposal of YSL stock and new brands, products and distribution channels hopefully leading to better margins. 20p "clean" EPS for 07/08 seems a conservative guess to me. If that were achieved, we have a business growing EPS at 33%, with a solid balance sheet in an attractive sector and trading on a forward P/E multiple of 9 (historic multiple using adjusted figure is 12 - hardly expensive either). Sounds like a bargain to me.

[wynmck] 28/6/2007 13:26

chart-breakouts sold this a.m to take profits -they say they would normally have held but for "unpredictable markets"
looks like that was the 11,160@1.78@08.13 trade.
Anyone seen any comment from Robbie Burns yet?

[remynapoleon] 28/6/2007 13:06

What about Moda ?

remynapoleon

[jason8466] 28/6/2007 12:49

ddl i agree about the share price. FWIW in my experience when the share price moves with strange fluctuations you can be sure the m makers are behind it.

[marben100] 28/6/2007 12:48

ddl - I think the drop is just MMs being cautious (and perhaps doing a little tree shaking). There don't seem to be many buyers around - yet, so if people are happy to sell at these prices, why should they raise those prices?

I suspect we might see some buyers once the results and conference have been digested and the analysts put out some new notes. I'd expect to see a new note from Hardman taking account of these results and what they gleaned from the conference, rather than just some words in their monthly newsletter.

My guess (and it's no more than that) is that we might start to see the price rising from here over the next few days. Here's an extract from Thomson's lunchtime commentary:

...Marchpole reversed earlier gains and was trading 9 pence lower at 177.5 despite announcing that its full-year pretax profit grew 87 pct as sales more than doubled and that it will continue to focus on acquisitions, entering into new licence agreements and extending existing ones. The luxury fashion brand management group's pretax profit for the year ended March 31 2007 rose to 8.3 mln stg from a restated 4.5 mln a year ago. Sales were up 136 pct to 90.53 mln stg and operating profit grew to 10.1 mln stg from a restated 5.0 mln stg last year...

Doesn't really add up, does it?

[jason8466] 28/6/2007 12:35

thats a very interesting statement DDl

[dan de lion] 28/6/2007 12:24

The amount of trades today that I can see just do not justify this drop, this amount of trades has been unable to move the share price previously.

Also:-
This year at normal profit margins, MPH only need to achieve sales of £70 millions to beat these numbers!

[marben100] 28/6/2007 11:32

Yup, momentos is sorely missed but nice to see stalwarts here: wbj, lex, dan et al

Volume traded so far today is tiny. The next few days will be interesting...

[lex1000] 28/6/2007 11:05

Update @ 10:57



Marchpole FY pretax profit up 87 pct; will focus on acquisitions UPDATE


(Updates with background, info on recent deals)
LONDON (Thomson Financial) - Marchpole Holdings PLC said its full-year
pretax profit grew 87 pct as sales more than doubled and that the company will
continue to focus on acquisitions, entering into new licence agreements and
extending existing ones.
The luxury fashion brand management group's pretax profit for the year ended
March 31 2007 rose to 8.3 mln stg from a restated 4.5 mln a year ago. Sales were
up 136 pct to 90.53 mln stg and operating profit grew to 10.1 mln stg from a
restated 5.0 mln stg last year.
"Major achievements during the year were the acquisitions of Greenmark Ltd
and Homebody Ltd, both of which have been successfully integrated into the
Marchpole business model," said executive deputy chairman Michael Morris said.
The company said it is recommending a final dividend of 2.25 pence, giving a
total dividend of 3.75 pence for the year against the restated 3.5 pence last
year.
Marchpole said it is working closely with the House of Ungaro on
developments in design, product range and distribution, adding that it is
confident the Ungaro brand will prove to be an adequate replacement for Yves
Saint Laurent.
Marchpole recently signed significant long-term partnership agreements with
headwear company New Era and denim company Lee Cooper.
The company said it has created a worldwide platform for managing brands
over the last few years and that it anticipates further growth.

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apm/tsm/lam

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[argy2] 28/6/2007 11:04

guman

Not that unusual.It is often better to travel than arrive in the City.

[kneath] 28/6/2007 11:04

guman - bit late to the party. The share price has fallen, but is in recovery mode.Sp frequently dips on results day due to 'buy on rumour, sell on news' brigade. Personally I think these results are strong enough to merit a swift recovery.

[guman] 28/6/2007 10:55

salesup,profit up and yet share price falling fast?

[lex1000] 28/6/2007 10:53

Latest trades on PLUS.Usual time lag approx 15 minutes..

Price Volume Type Consider ( £ )
28/06/2007 10:37:55 176.10 636 O 1,119.99
28/06/2007 10:36:06 178.00 8737 O 1555186.00
28/06/2007 09:22:38 178.00 337 O 59986.00
28/06/2007 08:58:44 178.00 500 O 89000.00
28/06/2007 08:52:50 178.00 10000 O 1780000.00
28/06/2007 08:51:48 178.00 193 O 34354.00
28/06/2007 08:50:57 178.00 820 O 145960.00

[lex1000] 28/6/2007 10:36

Here,here.Momentos you are sorely missed.If you are about and able please come back soon.

[argy2] 28/6/2007 10:34

Really miss momentos at times like this.His intelligent unbiased comments were always welcome. Where are you mo?

[lex1000] 28/6/2007 10:15

Tick up^ mms will always soak up stock.Nice buying these levels.Hardman expected to upgrade in July newsletter.aimvho.

[lex1000] 28/6/2007 10:13

marben100,post covers important points.

[marben100] 28/6/2007 09:58

Agree about dumping nardelli, this was expected. Very important and successfully executed, with balance sheet showing no stock overhang of unsold YSL goods. Excellent cash conversion.

I agree that to post this EPS figure they must have confidence going forward. Now they've got rid of old stock, I'd expect to see margins rising again.

All in all an extremely well run business, with good prospects going forward. Solid balance sheet now after earlier concerns. Nice dividend yet on a low multiple, however you measure it, relative to its peers. Exactly the sort of company I like to invest in.

These opportunities wouldn't arise without the doubters, so thanks to you too.

Regards,

Mark

[nardelli] 28/6/2007 09:26

looks good to me, if you are going to stop selling ysl, might as well dump as much as you can at less profit. with what company has done in the last few months I feel they have covered the loss, congratulations to MM and all at MPH.
More important is what we hear from the experts after 11.

[fardistanthills] 28/6/2007 09:09

Sensei10 - I too think 15p is a misinterpretion. I was simply taking it a bit further and wondering why MPH would want to put up an aggressive number which will be a proverbial 'rod for their back' next year. Prankster - very much agree with you.

[argy2] 28/6/2007 09:08

Turnover and profits distorted this year by YSL which we all knew about.

[antrant] 28/6/2007 09:07

Company MARCHPOLE HOLDINGS PLC ORD 5P
TIDM MPH
Headline Marchpole FY pretax profit up 87 pct to 8.3 mln stg; will focus on acquisitions
Released 09:05 28-Jun-07
Number 090508.28062007



LONDON (Thomson Financial) - Marchpole Holdings PLC said its full-year pretax profit grew 87 pct as sales more than doubled and that the company will continue to focus on acquisitions, entering into new licence agreements and extending existing ones.

The luxury fashion brand management group's pretax profit for the year ended March 31 2007 rose to 8.3 mln stg from a restated 4.5 mln a year ago. Sales were up 136 pct to 90.53 mln stg.

'Major achievements during the year were the acquisitions of Greenmark Ltd and Homebody Ltd, both of which have been successfully integrated into the Marchpole business model,' said executive deputy chairman Michael Morris said.

The company said it is recommending a final dividend of 2.25 pence, giving a total dividend of 3.75 pence for the year against the restated 3.5 pence last year.

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[cr4zyness] 28/6/2007 09:07

Lex,

Thanks a good long term hold,

o/t you may want to look at CZT phillips have just bought 9% of company results august ;)

[prankster2] 28/6/2007 09:02

FarDistantHills,

They are confident look at one of the real barometer of growth, the turnover.