Mj Hudson Share Discussion Threads

[davidosh] 11/8/2022 07:11

There was £1.5 million on offer to retail investors via PB...

In addition, the Company is also pleased to announce that it has raised GBP0.22 million (before expenses) through the subscription of 742,463 Retail Offer Shares under Retail Offer following the closing of the offer on 10 August 2022.


It looks like the retail offering went down like a lead balloon. Hopefully some new institutions will take part and want to build on their investment but the business model of buy and build only really works with highly rated shares and not where you have to keep paying increasing earn outs in cash.

[se81] 11/8/2022 05:22

I mean the Bridge deal was announced with the earn out at 5x the initial consideration so not sure why deferred consideration is a surprise- normally this would be based on some combination of revenue and earnings (something that either side can’t easily manipulate) They told you that Bridge was now “increasingly profitable” in the last update so it’s not exactly a stretch to deduce what’s going on- to be fair to MJH they’re nothing but detailed in their communications. The issue remains that the business model (buy & build) is hamstrung by an underperforming share price- here’s hoping a supportive II comes on board in the placing and wants to buy further in the mkt

[riverman77] 10/8/2022 20:37

Contingent liabilities should surely only be triggered when the cash is coming through to fund them. Concerned that the deals were poorly structured - eg compensation becomes due when certain targets are met (eg new client wins), but are yet to generate much cash. Who knows, but doesn't fill me with a lot of confidence.

[simon gordon] 10/8/2022 19:41

With all this dilution 45p is the new 60p.

So, maybe they'll get to c.60p in 2024/25, five to six years after they floated.

Certainly kiboshes much of any multi bag potential for existing holders at the IPO.

They certainly have structurally engineered the share price inadequately up to this point. Will rapid growth make shareholders whole, or will they have to sell themselves to Private Equity to get the capital they may want to scale faster?

[simon gordon] 10/8/2022 18:08

Too much underlying growth and undercapitalised. They've only recently hired a product manager, a venture lead and a customer success manager for ESG Advantage. The opposition look to have 40+ plus teams, MJH has maybe 4+. Though they do have the ESG consultants and other teams who can help sell through the product.

Bridge has gone better than expected and so has ESG Advantage. They both have large market opportunities.

Share price is likely going to mark time until more topline growth is shown. Could be a dull 12 months for the share. The business is growing, the one-stop shop platform has been built, just a matter of selling through it, scaling up the staff and investing in product. At some point it will be cashflow positive with a 30%+ margin but until then traders will give it a pass. Maybe, 2024 will be the decisive year. 2022 was the year it all bonded together, 2023 looks to be the year of investing hard into staff and product, will 2024 be the year for a re-rating?

[se81] 10/8/2022 18:05

Really what’s being sold as a 4% discount is more like a 20% (if you consider the fall from 35/36 area when it leaked)

I don’t think it’s the end of the world that good performance from acquired assets has necessitated a cash call (presumably they would have had no other option re regulatory capital) but it doesn’t fill you with confidence re financial control

However I do think Cenkos need to be given the boot…

[dr biotech] 10/8/2022 16:46

I have a primary bid account and also keep a theoretical portfolio where I buy a nominal £1000 of stocks at the offer price (i don’t include the funds that are often touted just the stocks). It’s not exhaustive and I’ve only been doing it a year.

Of the 10 holdings net zero, oxford biomedica, precook, Harland and Woolf are all heavily down 40-70%. Two, europa oil and gas, trident royalties are up 30-40%, and the others are within 10% or so. Bit of a minefield. I’m not applying.


Would say though that it’s good that they don’t have to discount a huge amount to give it away, pretty much all of the PB offers sit on the offer price the next day. So we can expect a 5% drop tomorrow.

[melody9999] 10/8/2022 16:30

Cannot see any point in subscribing to the Primarybid offer. Shares will not be issued until 1st September - 3 weeks a long time to wait in this market and not be able to transact.

Meanwhile placing represents a 15% dilution with no clear earnings enhancement

And the discount to have your funds 'frozen'? A measley 4%, some of which will be taken by the spread.

As Riverman says, best to buy in the market ...... if you like the prospects here.

[riverman77] 10/8/2022 16:19

Well that explains everything. While I liked the story here and think the long term prospects look good, I was put off by the combination of anaemic cashflow, high debt and hefty capital requirements (and add to that contingent liabilities which I was unaware of). Will probably drift well below 30p over next few weeks so see no rush to get in here. Possibly a good recovery play at something point.

[dr biotech] 10/8/2022 16:15

Those recent large transactions look like forward selling. On the positive side it’s not a large discount to the current sp, but it’s a big discount to where I bought in. Makes me think the recent ahead statements were an attempt to fluff up the price.

[se81] 10/8/2022 15:54

Its an interesting RNS- the detail re the performance of bridge group is impressive as is MH taking 2.65 to 2.935m shares in the offer

[se81] 10/8/2022 15:45

well now we have the reason for the recent fall.....

[simon gordon] 09/8/2022 17:36

Really interesting podcast episode which at times discusses growth and margins, and why moving a businesses margins too quickly, instead of investing for growth, can hobble a company over the long term:

The Business Brew - April 2022

Mark S.F. Mahaney - Nothing But Net

Mark S.F. Mahaney stops by The Business Brew to discuss tech investing and his book Nothing But Net. Mark is a senior managing director and head of the Internet Research Team at Evercore ISI. He has covered internet stocks for almost 25 years, and has been consistently recognized by Institutional Investor for his research, including 15 years as a “top 3” ranked analyst and five years as a No. 1-ranked analyst.

[simon gordon] 09/8/2022 15:37

Interesting piece on how the ACCESS pool works and MJH's involvement. I read in one of the broker notes that MJH get paid a percentage fee based off AUM.

Top 1000 Funds - 9/8/22:

The benefits of external investments: UK’s pooled fund backs outsourcing



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VeroESG is a SaaS platform directly targeting private markets. Came across it as it was advertising on ESG Clarity site.



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Informative article on ManCos:

Ocorian - 8/8/22

8 benefits of appointing a third-party ManCo

[simon gordon] 08/8/2022 09:57

It still shows on the Vauban site that MJH are a shareholder but that looks to have changed:

Silicon Canals - 15/7/22

US-based Carta acquires London-based Vauban

Carta, a San Francisco-based fintech startup, announced that it has acquired London-based Vauban, an online platform that helps investors back private companies. The value of the acquisition has not been disclosed.

As a part of the acquisition, Vauban’s team will join Carta, says the company. It will also result in the integration of Vauban’s fund establishment platform into the existing Carta business offering.

Continued...

[simon gordon] 08/8/2022 09:36

Interesting Fintech company that MJH have a share in:

Undervalued Shares - May 2021:

DO YOU WANT TO BECOME A FUND MANAGER? VAUBAN MIGHT BE FOR YOU

...Vauban had 24 employees when I visited their office in the City of London, and are planning to double this number by the end of the year. It doesn't take much to figure out that this is one of the more serious finance-related start-ups to come out of London. Not only is MJ Hudson a shareholder, they have also been given office space in the same building as the law firm...




Another company MJH have shares in is Making Science Group which is listed in Spain and is currently 14.30 euros a share, it's on the MJH books as 5.7 euros a share.

[chrisdgb] 05/8/2022 13:59

Topped up in the pension today...........

[simon gordon] 05/8/2022 13:48

MJH not in this list but gives an insight into the ESG SaaS scene:

Storm4 - 14/6/22:

The Top 10 ESG Startups In 2022: Europe & US Edition

[dr biotech] 03/8/2022 11:21

1m sell just showing - presumably from yesterday given the time stamp- which likely triggered the fall.

[its the oxman] 03/8/2022 08:49

Added a few. Too cheap.

[se81] 03/8/2022 07:10

Ha! Love the cake analogies....tis a shame though that the growth plans are hampered by the share price- at least m'ment interests are significant enough to (hopefully) avoid acqn via placing at these levels

[simon gordon] 02/8/2022 19:44

Balcony,

Share price looking more like a collapsed souffle than a cake.

[balcony] 02/8/2022 19:02

I keep looking in the Cake shop,very tempting at the current price.

[simon gordon] 02/8/2022 17:21

Cenkos really struggling to find a buyer/s. Look to have been touting this lump for months.

According to the Admission document £26m was invested in the business prior to the IPO, raised in 2019 at flotation was £26.3m. Net debt is c.£17m of which c.£9m is regulatory capital in Dublin, not sure if any is held for similar purposes in their other ManCo locations.

So, they've invested c.£62m in the group and to date have not added any value to the share price.

With a low rating they are constrained in using their paper as currency. No doubt if they could get their hands on more capital they could scale more quickly. No deals done in the past 12 months.

They have a good marketing spiel on explaining the story to the market. Just no takers at the moment. The market is not vibing it, yet. All the ingredients to bake a tasty multi layered gateau are in check and 2022 has proven it's baking beautifully in the oven. Just needs some whipped cream layered over it as it looks to be coming out of the oven in 2023.