Mereo Biopharma Share Price (MPH)

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Mereo Biopharma Group Plc	LSE:MPH	London	Ordinary Share	GB00BZ4G2K23	ORD GBP0.003

	Price Change	% Change	Share Price	Shares Traded	Last Trade
	+0.00p	+0.00%	85.00p	30,229	08:00:26

Bid Price		Offer Price	High Price	Low Price	Open Price
80.00p		90.00p	85.00p	82.50p	85.00p

Industry Sector	Turnover (m)	Profit (m)	EPS - Basic	PE Ratio	Market Cap (m)
Pharmaceuticals & Biotechnology		-37.31	-45.00		60.5

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Mereo Biopharma (MPH) Latest News (2)

Mereo Biopharma News

Date	Time	Source	Headline
23/5/2019	17:58	ALNC	DIRECTOR DEALINGS: Mereo Biopharma Non-Executive Bains Buys Shares
23/5/2019	16:11	UKREG	Mereo BioPharma Group plc Director/PDMR Shareholding
22/5/2019	09:47	ALNCF	Alliance News Flash Headline
22/5/2019	09:45	UKREG	Mereo BioPharma Group plc PDMR Shareholding
21/5/2019	15:08	UKREG	Mereo BioPharma Group plc Director/PDMR Shareholding
20/5/2019	07:01	UKREG	Mereo BioPharma Group plc Notice of AGM
08/5/2019	13:53	UKREG	Mereo BioPharma Group plc Director/PDMR Shareholding
07/5/2019	07:01	UKREG	Mereo BioPharma Group plc Re-release: Intention to Purchase Shares
03/5/2019	17:00	UKREG	Mereo BioPharma Group plc Intention to Purchase Shares by Trustee of EBT
03/5/2019	14:02	UKREG	Mereo BioPharma Group plc Director/PDMR Shareholding

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Mereo Biopharma (MPH) Discussions and Chat

Mereo Biopharma Forums and Chat

Date	Time	Title	Posts
30/4/2019	21:50	MPH the pharma nobody knows about *Ј3 ->>>>Ј8*	10
26/1/2009	11:56	Marchpole: A Global Future: The Time is Now	4,780
06/7/2008	15:45	WARNING! For double bottom speculators only please.	30
22/2/2008	15:24	Marchpole hits the deck!	9
19/2/2008	13:46	Great Results Price goes down	3

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Mereo Biopharma (MPH) Most Recent Trades

Trade Time	Trade Price	Trade Size	Trade Value	Trade Type
10:34:16	81.95	1,000	819.50	O
09:58:17	76.88	26,165	20,115.00	O
08:10:57	89.00	540	480.60	O
07:47:28	81.95	750	614.63	O
07:46:59	81.95	1,074	880.14	O

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Mereo Biopharma (MPH) Top Chat Posts

Date	Subject
23/5/2019 09:20	Mereo Biopharma Daily Update: Mereo Biopharma Group Plc is listed in the Pharmaceuticals & Biotechnology sector of the London Stock Exchange with ticker MPH. The last closing price for Mereo Biopharma was 85p. Mereo Biopharma Group Plc has a 4 week average price of 77.50p and a 12 week average price of 77.50p. The 1 year high share price is 324p while the 1 year low share price is currently 77.50p. There are currently 71,155,050 shares in issue and the average daily traded volume is 184,018 shares. The market capitalisation of Mereo Biopharma Group Plc is £60,481,792.50. Read Full Thread Reply
09/11/2008 22:19	master rsi: Hyper Al Hi, long time no see, after all these years on the threads. re - The banks are the ones who should take the blame Nothing is for sure what is going to happen to the company yet, but I HAVE SEEN once too often the same comments from the directors after the share have been suspended and eventualy there is no way out. I do not whish this to happen to the company, not only because shareholders loose their money but also cos I had followed MPH just like you for a long time now a good 13 years and I was managing a few bob ( some times it was a bit more) trading with the stock. I just have noticed today on one of my Credit cards, that usually were saying, minimum payment £5, THIS WEEKEND I reveived the statement, they have increased my Credit limit, but they have increased minimum payment it is now £25, though the balance has been much the same, ( I am certainly paying the full amount all the time), to me that means the banks are short of cash, and as you are saying they are the ones to blame for all the problems that we are experiencing individuals and small companies at the moment. -------------- re - I'm a bit surprised by your comments on this thread. My comments was a double meaning for " fivepounds " not for the shareholders And a few month ago I was defending the company maybe too strongly, cos I did not want to go under, thinking about the shareholders. ------------- re - I have had enough of banks! - I'm taking my money out of the system! You are not alone, I did that since mid-July, and although I still believe that the Stock market is a good place to make money, one can easily loose more than the shirt if ONE is not carefull . With time the market will return to normality and share price will be moving higher again, at the moment despite all that stimulation the economy is far away from the time to put the money back into shares, so time to look for bargains if posible companies with cash and being profitable, YES it will be time to be back to basics with the cash not speculation. Kind regards Read Full Thread Follow Reply
11/1/2008 07:45	dan de lion: The last time MPH share price was at this level was based on these accounts:- The profit and loss account for the year shows an operating profit of #0.8 million (previous year #3.2 million loss) on reduced turnover of #16.0 million (previous year #17.3 million). A gross margin of 41% was achieved (previous year 25%) during the year with profit before taxation of #0.7m (#2.8m loss), and EPS of 0.6p (loss per share 2.1p). No dividend. Forward orders were £7.5 million and it was a one Country one brand Company. Has anybody noticed if there has been any improvement in:- (A) Turnover? (B) Profits? (C) Dividend? (D) Brands under management? (E) Wholly owned brands purchased from T/O? (F) Worldwide diversity? (G) Internet presence? (H) Retail outlets? Should any combination of the above justify a higher share price? Whats that, they have all of the above!!!!!!!!!!!!!!!!!!!!!!!!!, Read Full Thread Follow Reply
07/9/2007 16:33	marben100: Sorry for the delay folks but here is my report on the AGM. Hope you feel the wait was worth it. (I will prefix this report by saying that I started it yesterday, so where it says "today", read it as "yesterday") Introduction This was an AGM that I had been looking forward to. With the major shift in MPH, losing its YSL sales, 2007/8 is a key and transitional year for the business. The AGM provided an excellent opportunity to get a better understanding of how this transition was progressing. I am pleased to report that my expectations were fulfilled and the meeting, from my POV, was highly productive. Marchpole is a "brand management company", despite being classified in the retail sector. It aims to address the luxury end of the spectrum and so, IMHO should be less vulnerable to a consumer spending squeeze than many retailers. What does that mean? Marchpole: - Licences or buys brands (in the past Yves St Laurent, now JCC, Homebody, Ungaro etc) - Works with designers to develop products that enhance the brand (mainly apparel, footwear but including accessories like sunglasses) - Markets the brand - Subcontracts product manufacture, under Marchpole quality supervision - Wholesales the products Marchpole also operates branded "flagship" stores in a number of international locations. These primarily serve the purpose of showcasing the brand. My chat with Michael Morris reinforces my view that his business style and temperament are a close analogue of Alan Sugar: a no-nonsense guy, who calls a spade a spade but shrewd and hard working. Like AMS, shareholders also have to expect that MM will "look after no. 1" (evidenced by the rather large bonuses and salary increases the board awarded themselves last year admittedly in the light of much hard work and good results). If you don't like that style of entrepreneur, then this is not an investment for you and you need not read any further. At the current share price Marchpole is a "value play", for me, but with strong future growth prospects. Here are the numbers: MPH Share price (p) 126/191/98 (current/52 week high/52 week low) Shares in issue (m) 27.15 Turnover (£m) (1) 71.1 Mkt cap (£m) 34.2 EPS (p) (1) 19.8 P/E 6.4 NTAV (£m) (2) 0.6 NTAV/share (p) 2.1 Net debt/(cash) (£m) (2) 3.7 Dividend (p) 3.75 Yield 3.0% Year end 31st March Website: http://www.marchpole.com/ Notes: (1) Figures based on Hardman's latest forecast. Go to http://www.hardmanandco.com/ click on "research" and "sample research" you'll find reports for numerous companies there, including Marchpole. (2) Based on latest annual report, which you can download from Marchpole's website, here: http://www.marchpole.com/marchpoleplc/financial/index.jsp?year=2007&type=0 The Meeting As usual, the meeting was held at Marchpole HQ in Berners Street, in the heart of London's West End fashion district. Marchpole occupies quite a large building there. The location provides a good opportunity to examine the merchandise Marchpole is selling, as good displays are provided in and adjacent to the meeting room. The meeting was well attended, with most seats being taken. However, AFAICS there were only 3 private shareholders present, the remaining attendees being advisors and employees of Marchpole. We also had John Harrison, retiring FD and John Molloy, newly appointed non-exec, in the audience. At the top table we had: Ronnie Sterling (Non-exec), Raymond Harris (Non-exec), Christopher Phillips (Chairman), Michael Morris ("Executive Deputy Chairman" in practice he's the CEO and major/founding shareholder) and Harvey Shulman (Non-exec). Before the meeting, John Molloy introduced himself. He has working for C&A for 20 years and has known MM for a long time. He will be assisting MM with product sourcing. Some biographical details on JM are included in the RNS announcing his appointment, here: http://www.investegate.co.uk/Article.aspx?id=200708080700417076B JM made the point that MM has been "doing everything himself" recently and really needed a hand. Christopher Phillips decided to take all questions before voting on the resolutions. I'm afraid I rather monopolised the meeting. Here are my questions and the responses (please note that I don't do shorthand, so my reported responses are my interpretation of what the board was trying to convey, based on notes I took at the time and may not be totally accurate): Q1. I am concerned that MPH appears to be losing focus as a "brand management" business and that > 50% of 08 turnover is forecast (by Hardman, p6) to come from non-luxury brands. Why have we gone down this route and will this product mix change in the future? A1. Considerable effort has gone into replacing the lost YSL business. Whilst Greenmark's footwear is generally unbranded, it and other "high street" apparel is sold by "upper end" retailers (Jaeger and Top Shop were mentioned). Work is being done to use Greenmark's expertise to produce footwear under Marchpole brands (JCC was mentioned). Homebody and Greenmark have not yet fully substituted for the loss of YSL but JCC distribution has increased 2-3 fold. There is a stock overhang (at retailers) resulting from the large YSL orders last year. As a result, Ungaro sales will not yet reflect their true potential. MPH has taken steps to reduce overheads, which should result in improved profitability. [My note: of course, this could be achieved just by reducing director bonuses!] Q2. There was no mention of Moda in this morning's statement. It formed < 10% of 06/07 turnover. How is it progressing? A2. Moda is now running at 10-18% of turnover. Trading in the US has been difficult this year. Q3. In general business in 06/07 (& all profits) were still chiefly in UK. When do you expect to see profits from international operations? A3. Now! Overseas operations are currently profitable. The JC-DC brand will be in 250 stores. To give some idea of the impact, jeans under this brand sell for ITRO 150 and tops for 65. MPH earns a 5% royalty and 10% wholesale royalty on sales of these products. Trading in Russia is also strong. MM emphasised that it takes time to build these brands and operations and it will be 2-3 years before the full results of the work being done now can be seen in the figures. Q4. I understand that we own 51% of Homebody. How are turnover/losses consolidated? How is the minority interest accounted for. A4. The accounts show the full value of turnover and profits/losses. As Homebody was loss making last year, losses are fully consolidated. When Homebody becomes profitable, a minority interest in the profits will be shown. MM also mentioned that MPH has grown the brand from an initial turnover of £200K to £2.5m now. Q5. Are orders for Autumn/winter 07/08 (largely) complete now? What is the peak time for spring/summer 08 orders? A5. Yes, orders for autumn/winter 07/08 are complete (but not fully shipped/billed). The order book for spring summer 08 closes on October 15th. [My note: therefore, by the interims, MPH will have excellent visibility of likely full-year results and will have a pretty good idea by now]. Q6. I have read in the press that we might be acquiring a store chain. I hope that this again would fit with the luxury brands theme and not just be an ordinary high-street retailer. Can you give me any comfort on that concern? A6. No comment on potential acquisitions! However, any acquisitions considered would not be "downmarket". Q7. There has been a declining trend in gross margins over the last 3 years. Why has this happened and do you expect this to continue into the future? A7. MM said that MPH is working hard to improve margins. Margins were reduced due to the high volumes of YSL merchandise sold last year. Improvement can be expected this year. Q8. Is the fair value adjustment subject to tax? A8. A notional deferred tax charge was incurred. Unless the acquired business are sold, this charge does not crystallise or have any impact on future years' tax. There is no amortisation of the fair value adjustment. I felt that MM and the other board members (and John Harrison, answering my financial queries) did their best to answer openly and there was no hint of impatience or irritation with my questioning. I did NOT get the impression that Hardman's figures were likely to be beaten this year and I had been recently told that MPH would inform the market if they felt they were going to miss the target. However, I did feel that the post-YSL Marchpole is in its early days and that MM is trying to assemble a team that can help him fulfil the company's true potential. After the questions, the resolutions were voted on. As mentioned in the AGM statement, the "special business" was not dealt with and a separate meeting will be convened to cover this. CP indicated that there had been a clerical error in certain of these resolutions and also that MPH wished to issue a further explanation to shareholders. I await this with interest. [I suspect that this may have something to do with resolution 7 authorising the board to allot shares well in excess of the company's current authorised share capital!] After the meeting I was able to waylay MM and ask one further key question that I had been hoping to put to him (he is now 61): how much longer do you want to stay with the business? I was surprised by the immediate and clear response: 5 years. There was even a hint that he already had a potential buyer for the business in mind! My Thoughts (FWLTW) What makes Marchpole an exciting investment for me is that the market is currently wary of it, for (IMHO) the following reasons: 1. It's classified as a retailer. Investors are wary of retailers ATM, with fears of an impending consumer spending squeeze. 2. There's a lot of uncertainty and fear in the face of losing the YSL licence. 3. Some investors may be concerned about the "Michael Morris" factor As a result, the company is very lowly rated. I set out below why, on balance, I think these fears will be overcome: 1. By focussing on "high spending" (or HNW) customers and diversifying into international markets not subject to the same pressures as the UK and US, I believe that MPH will be less vulnerable than typcal retailers. 2. Hardman have forecast that, despite the loss of YSL, profitability will be maintained. MPH have good visibility of this year's profits and have given no reason to believe that this forecast will not be met. 3. Whilst I must concur that the P/E should carry some discount to peers, due to dependence on one strong willed individual, this bring advantages as well as disadvantages, when that individual has shown himself to be as talented as MM has. Another thing to bear in mind: minority shareholders include Jean-Charles de Castelbajac (as well as several institutions). Together those minorities control 28% of MPH's share capital, against MM's beneficial and non-beneficial holdings of 24.5%. It would not further MM's interests if they were upset too much (eg with large future bonus payments eating heavily into profits). A further point worth considering: judging by the answers to my questions, MPH is hardly "firing on all cylinders" yet and it will be 2-3 years before it does. If, despite this, they are still confident of achieving the 19.8p EPS forecast Hardman have posted (and remember, they have good visibility of the likely outturn at this stage due to long order lead times), this gives some idea of the potential that the business can reach. Note that Hardman's forecast for 08/09 is over 26p and a further substantial increase can be expected in the following year (barring major slip-ups). Given that achieved growth on that scale might prompt a re-rating to a (hardly generous) P/E of 12, that gives an share price target of over 300p for those patient enough to wait. I have added today, following the AGM announcement. Marchpole remains one of my largest investments. Regards, Mark Read Full Thread Follow Reply
18/7/2007 07:45	lex1000: Good morning.Yesterday buyer @ 156p of 25k paid premium to prevailing share price at the time.Leading into close on line quoted offer @ 156p. We know there are deals in the pipeline.Wonder whether news heading Marchpoles way. Share price movements were discussed yesterday.In my experience share prices eventually do what they are supposed to do however not necessarily at the supposed time or when you expect.Co-incidently as MPH share price cheapening Barclays have been accumulating raising their holdings from 7% to a little over 10% @ 10.43%.Funds were also buying @ 177p. Take o/t CCT for instance,broker target price of 250p and still went down to just below 150p and recovered to 180s.MPH has also touched just below 150p despite well respected Hardman and co,who raised MPH target price from 175p to 240p. Read Full Thread Follow Reply
30/6/2007 15:12	lex1000: Good morning wbj.Impressed with what MM and team have done,is doing in the pipeline and positive about what will be the future.Changing like I have from investor,trader,investor to 100% buy to hold investor has in hindsight blurred vision of share prediction.That's over bullish and only seeing trading upside. In hindsight all the signs were there indicating MPH share price possibly falling like it has.It is month of June afterall and markets are nervy.Tough on anyone needing to sell before the drop.ok those holding long term ignoring short term.Can't argue that would have made more selling and buying back cheaper for it is a fact. For some time Marchpole has not come out with upbeat trading updates beating expectations in advance results and detailed numbers,however,firmly beleive those good times will return.I am of mind that MPH remains a good buy and medium to long term hold.Roll on end of 2007 summer and welcome H1.Plenty to look forward to.Good value.aimvho.........regards lex ;o) Read Full Thread Follow Reply
27/6/2007 11:16	lex1000: Healthy to have debate and mix of views.Predictions exactly that. Up to holders and investors to decide upon entry,holding short medium long and exit strategies.Inevitably there is profit taking.MPH is trading near to resistance of mid point (between 175p and 200p)@ 187.5p and have psycological 200p up above.Most profit takers out at these levels.Would expect some profit taking @ 200p. As I see it; glory of MPH is that share price has not raced away ahead of itself or in a straight line.MPH undervalued and is trading at a discount.Provides margin of safety,low risk and high reward.MPH share price has held firm during several market wobbles.Bought some at these levels,am holding and good value methinks.IF trading at sector average MPH=425p against current 186.5p. aimvho.dyor. Link to latest newsletter from Hardman,June 2007,for those who have not seen it. http://www.hardmanandco.com/Research/monthly/June07_monthly.pdf Read Full Thread Follow Reply
12/6/2007 11:24	lex1000: marben100,yes very enthusiastic. With you on this one - can't wait. I was speaking about the virtues of MPH down at 108p-112p highlighting breakout coming posted same day in fact both pre and as MPH breaking out.Similar to CCT @ 100p. One has to very careful and responsible.Over enthusiasm and excitement can be infectious not so good if peolpe pile in buying the highs only to see share price retrace.o/t CCT fallen from 207p down to lows of 150p for instance and red again today. The beauty of MPH is that the share has not run away rather consolidating and building for the next leg up.In my view MPH is trading at a discount.Therefore personally would rather researched and considered Marchpole down here (off highs 190p-193p)than chasing rising share price on breakout. Follower of MPH for several years.Impressed with more knowledgeable postings and those that can grips to numbers providing indicative value one of whom is wbj - who has held 187.5p down to 65p where he bought more and back up to 187.5p Genuinely hold and genuinely believe MPH worth more. Supports view excellent value sub 190p.That is at discount to true fair value and offers comfort zone of safety.Reason MPH rock solid during ALL market wobblies including recent one.I see potential between 300p-400p and possibly beyond. Telegraph highlighted MPH has value due a re-rating as trading too great a discount to peers. Therefore believe current posting to be responsible.Whether peeps buys or not is their decision alone.Done my research,bought,added and added more yesterday.At risk of repeating myself if CCT target price worth 250p then follows that MPH target price 300p-400p taking into account MPH has fewer shares in issue. Leave it to the professional number crunches come results day.June should be good and November possibly even better still. TYhe "trends" are there for all to see. Bullish.Holding.aimvho.dyor. Read Full Thread Follow Reply
01/6/2007 08:34	lex1000: Good morning Kneath,was referring to CCT as o/t in my post.Depending on entry price CCT risen between 176%-491% hence profit taking.RCG special circumstances,reasons negative sentiment which has bounced off 200 day SMA with avengence + news.The others do not follow.Know where you are coming from.Guess a case of looking stock by stock basis and deciding personal strategy.using CCT as an example it is (now) known that a number long termers sold when (their) target price was hit some selling 180p upwards. Back to MPH what I am saying is that do not think share price has run ahead of itself.If we take 100p as average buying price 80% gain compared to 176%-491%.Do not pretend to fully understand the markets,have very basic knowledge of charts sufficient as a guide and to get by.Suffice to say stocks never go up or down in a straight line.Other intricites and technicals at work.On average takes 5 years to know thyself and markets.Case sometimes of no rights or wrongs and no harm in banking profits.Timing is everything of course. Marchpole does require patience.Taken 2004 'till now to get back to 36p-37p old money.Inevitably some stale bulls have sold up to take original capital out.Invested know the company and the belief that stock is undervalued.Therefore cushion of safety.Rely on others to do the number crunching for me which produces £3-£4.To my mind MPH worth at least 250p and 40p old money gives you 200p. MPH was way oversold on YSL and negative sentiment.No allowances for sell through of YSL and what has been built is an exciting almost new business.I'm impressed,positive sentiment and quite rightly re-ratings back to fair value.We're not there yet and value should out.Invest in stock continue produce year on year growth and income.Time to sell before companies go ex-growth.Way to early for MPH share price holding well for good reasons methinks.aimvho.dyor. Read Full Thread Follow Reply
20/2/2007 23:58	marben100: The eagerly-awaited MPH shareholder circular thumped onto my doormat this morning. At a hefty 45 pages, it's a bit more voluminous than I was expecting. Unfortunately, it's not available on the web. I do intend to attend the EGM and I'll ask why not. On the cover it indicates that copies are available from the Company's registered office so by telephoning and asking nicely you may be able to obtain a copy. The market seems to like it, anyway, with the shares up a further 7% today. I'll do my best to summarise the key data here. If you have any further questions, I'll try to answer them if I can find the data in the document, or otherwise I can ask at the EGM. The Deal Now we have the full details of the deal. AIUI it falls into four parts. In summary, these result in the Vendors of Greenmark receiving £11.8m and Marchpole acquiring the business with an NTAV of £0 for ~£3m. Whilst this looks like an excellent deal for Marchpole, I can see that it makes sense for Greenmark's owners too. Again, I will ask about this at the EGM but it looks to me as though Greenmark's owners were looking for an exit. As a private, unlisted company, it can be hard to find a willing buyer. Without the expertise of Greenmark's founders, it is not an attractive proposition for a financial buyer, so I would not be surprised if this is simply a case of no-one else being prepared to improve on Marchpole's offer, even though that offer does not appear overly generous. The financial side of the deal breaks down into the following components: 1. Share buyback As at 31 Dec 2005, Greenmark had an NTAV of £7.2m (nearly all of which represents net current assets, including £5.7m of cash). So that Marchpole do not have to pay directly for the acquired assets a bit of a pointless exercise Greenmark effected a buyback of all of the shares held by Mrs Manning and Mr Rooley (the Vendor) for a price of £8.8m. Presumably based on management accounts, it has been assumed that the NTAV has risen since the 2005 year-end date to the £8.8m figure there will be an adjustment to this buyback consideration figure to allow for any discrepancy between the estimated NTAV and that finally agreed. Hence, the NTAV of the acquired business can be assumed to be zero, breaking down as follows, according to the proforma accounts (based on the end 2005 reference date): £'000s Non-current assets 75 Current Assets Inventories 788 Receivables 2,099 Current Liabilities Payables (879) Tax liabilities (525) Bank Overdrafts and loans (1,475) Non-Current Liabilities Nil Net Assets 83 2. Cash consideration & loan notes Marchpole is paying a cash consideration of £1m on completion of the acquisition. A further payment of £1m is due on the second anniversary of Completion (effected by means of £1m in bank guaranteed loan notes, which will appear as a liability in Marchpole's balance sheet). Interest is payable on these loan notes at HSBC base rate + 2.4% 3. Convertible loan notes The £1m convertible loan notes will convert into new Marchpole shares on the second anniversary of completion. The number of shares to be issued will be 1m divided by the average MPH share price (in £) averaged over the two years subsequent to completion, taking the share price as the mid-market quote on the last business day of each month for averaging. Interest at HSBC base rate is payable from completion until conversion If today's mid closing price (141p) is assumed to be the average share price, this would result in the issue of ~709,000 new shares, or 2.6% of the current share capital not a significant dilution (and will be less if, as we expect, the share price moves forward from here). Risks As in a listing document, there is a useful section of the circular detailing risks. A few "interesting" ones caught my eye: Furthermore, fluctuations in interest rates may have a detrimental impact on the fashion footwear sector. Interest rate rises are often implemented to act as a brake on an overly buoyant economy and will usually have the effect of curbing the consumer retail market and encouraging people to cut back on their expenditure. Recent interest rate rises and further rises in the future may have a material adverse affect on Greenmark's financial results and operational performance. This risk should, to some extent, be mitigated by Marchpole's international operations, assuming that Greenmark products can be sold internationally and in the absence of global interest rate rises. Greenmark's business is subject to seasonal peaks. Historically, its most important period of the year in terms of sales has been March and August, reflecting the introduction of Spring/Summer and Autumn/Winter ranges. This can put pressure on Greenmark's supply chain and if suppliers are unable to provide sufficient quantity of merchandise to its customers in a timely manner, product shortfall and the loss of goodwill could result. Useful to know the peak seasons which, I guess, are similar to those for the rest of Marchpole's business. They mean that a reasonable spread of sales between 1H and 2H can be expected (year end 31st March). All Greenmark's products are manufactured in Brazil. The long lead times between ordering and delivering (up to two months) can make it difficult to satisfy rapidly Greenmark's customers' changing requirements... I guess this isn't much different to the rest of the business but will ask at the EGM. Glad to see MPH recognising the following risk (and, I assume, taking action to mitigate it): ...In the current consumer environment, the Directors believe it is critically important for high street retailers to deal in goods that have been ethically produced... Negative publicity resulting from unethical working conditions... might detrimentally impact... the Marchpole group generally. Whoa... this one's a bit hairy but, I believe, not much different to Michael Morris' own supplier relationships, AIUI: Greenmark has no written contracts with its suppliers. ... Relationships with suppliers in Brazil have been managed by James Rooley, who is leaving Greenmark as an employee but will remain as a consultant. Approximately 60% of Greenmark's revenue is generated from four key customers... This risk is significantly increased in the case of Greenmark as it has no written contracts with its customers... I'll DEFINITELY be asking about that... and expecting Marchpole to address it (which probably won't be easy). The absence of written contracts helps to explain why MPH was able to pick Greenmark up so cheaply, IMHO! Greenmark Accounts For the accountants amongst us, Deloitte and Touche have acted for Marchpole in reviewing Greenmark's accounts and, AIUI, have given an unqualified report. Greenmark seems to have been run as a pretty tight ship. Average employees for 2003, 2004 and 2005 were 11, 12 and 15 respectively. Not bad for a company with the turnover and profits Momentos has detailed in his earlier post on this thread (and confirmed in the circular, which includes the last 3 years accounts for Greenmark). One point worth noting, in Note 16 to the accounts: Greenmark utilises currency derivatives to economically hedge significant future transactions... At the end of 2005 these stood at just over £2m. Glad to see them hedging against those risks. Worth noting (as might be expected for a private business) that a large part of the Administrative expensive in 2003 and 2004 comprised director emoluments. Figures as follows in £K: 2003 2004 2005 Gross Profit 2,976 3,578 3,579 Admin expenses (total) 1,495 1,083 462 Of which Directors 824 281 94 Proforma Assets A proforma statement of net assets is presented, as if the assets of Greenmark as at 31st December 2005 had been combined with those of Marchpole as at 30th September 2006, the Greenmark share buyback had taken place and the consideration paid. This reads as follows (all figures in £'000s): Non-current assets Intangible Assets 9,961 Investments 5 Property, Plant & equipment 1,122 ====== 11,088 ------ Current Assets Inventories 7,938 Trade & other receivables 20,726 Cash & cash equivalents 6,695 ====== 35,359 ------ Current Liabilities Trade & other payables (10,984) Current tax liabilities (4,112) Bank overdrafts and loans (15,371) Deferred tax liability (80) ====== (30,547) ------ Non-current Liabilities Deferred tax (369) Loans (3,965) ======= (4,334) ------- Net assets ====== 11,566 ------- So Marchpole's proforma NTAV is ~£1.5m following this transaction and we have net bank debt + bonds of £12.7m, against a current market cap. of £38.4m, so gearing of around 30% - an acceptable figure but without any significant asset backing. Of course, 2H07 retained profit for MPH is to be added to the NTAV, which should return us to better territory. NB when the convertible loan notes convert, this will remove £1m of debt but slightly dilute equity, as indicated above. My conclusions A good buy by Marchpole, carrying some risks but what worthwhile enterprise in this world is without risk? Regards, Mark Read Full Thread Follow Reply
29/11/2006 12:34	skyracer: "We are currently in negotiations for an acquisition which we hope to conclude in the very near future." Worth remembering this. The right aquisition; managing brands, high t/o, low profit due to overheads, could make MPH share price rise. Read Full Thread Follow Reply

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