Mouchel Share Discussion Threads

[howdlep] 17/1/2012 11:41

As pi's we have to forget about 12 month highs in excessive of 250p, together with the bids that came in for the company, and concentrate on Mouchel 2011. However, with a man with a proven track record of turning around companies (David Shearer, Crest Nicholson, City Inn) at the helm and with the banks support, we can only speculate where the share price could move to, once that confirmation RNS is issued later this week. Certainly a new wave of investors are going to arrive, which will rapidly move the share price higher. But once again, this is not one for widows and orphans. It is a high risk/high reward play.

[howdlep] 17/1/2012 11:25

pikey01,

A two way debate is always healthy, as the market is always right and not the individual.

Picking up one or two of your points. Firstly, the FT article of 6 December (see link in a previous post or google search Mouchel Gill Plimmer) states that Mouchel are cutting "£5m on advanced SAP accounting software", so that is future capex and not depreciation. If you know differently, please elaborate.
Was SAP FULLY implemented in late 2009, as systems that big are usually implemented in phases?
Secondly, the staff cuts are on-going and will continue for a long while yet. However, management are losing some contracts, including ones which were not profitable, and gaining many other new profitable ones. The benefits of that will be seen in the coming months. Management will have time to deliver, but in keeping with a new plan defined within the constrains of the increased borrowing limit. That is obviously key to the turnaround.

Any genuine comment appreciated

[pikey01] 17/1/2012 11:10

howdlep - 17 Jan'12 - wrote: (amongst other things):...plus reductions in staff and software costs (£5m reduction in SAP accounting software)...

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The SAP software, colloquially known as "Connect", was implemented in late 2009 and would have started to be depreciated in [at best] 2008/09 accounts, but more likely the 2009/10 accounts.

Assuming the magic £5M number isn't just "made up", a great chunk of that, say 80%, must be depreciation - that's being very generous in terms of £1M p.a. on-costs.

So if it has been depreciated for [maximum] 2 years of 5, that roughly means they have to "lose" £12M this year if they are writing it off this year.

It sounds great to say "we're going to save £5M p.a. in expensive accounting software", but the reality is they haven't even paid for it yet (in accounting terms) - so really just a bit of noise.

WRT to your "reductions in staff" comment, again it sounds like a good idea doesn't it but for the fact they have been doing this since 2009. Massive numbers have gone either through redundancy or better offers elsewhere.

I know some here hate facts (!!) but there you go.

[howdlep] 17/1/2012 10:24

SP continues to tickup up slowly as one or two pi's begin to get intersted in the turnaround story. Expect to see lots of press coverage after the RNS confirming the bank borrowing limit increase. This will be the green light for Shearer to implement his plans

[crosswire] 17/1/2012 09:44

O/T

FDL

Findel

Trading update tomorrow!!

[howdlep] 17/1/2012 09:36

and that is the key. The share price has been priced for failure, with the pi and the likes of Schroders reducing in anticipation. However, the agreement with the banks, which involes fee payments, 5% equity and overdraft charges, plus reductions in staff and software costs (£5m reduction in SAP accounting software), will help to turnaround this company. That is why David Shearer, the pending Chairman, has been brought in. He is a specialist in this field, as the FT article, dated 6 December, duly highlights.
When an share price is priced to fail and we are close to exhausting the sellers, there is often only one way for it to go, and that is up. News that the borrowing limit has been extended will bring in new investors as it will reduce the risk and allow Shearer to implement his plans.
On a risk/reward basis, this is now very interesting, albeit not for widows and orphans.

[htrocka] 16/1/2012 18:37

The new loan increase will obviously require a restructuring plan... no doubt at a price, ie, more warrants, possibly an equity increase, lenders increasing their hold on the company?...all my opinion of course...but after this coming Friday's successful vote, at least it's safe to say that this is not heading for the 'knackers yard' ie, administration....It's looking a bit better than it did this time last week.

[guru121] 16/1/2012 17:43

overhang/weak holders or schroders still reducing their holding as they have been dumping for the last few weeks.

[howdlep] 16/1/2012 13:16

A good start to the day. Weak holders are slowly being replaced by new investors.

Increasing the borrowing limits is just the next stage in the restructuring plan.

And as we know, the new Chairman is a turnaround specialist:-

You may need to free register to read this article in full

[paragon157] 16/1/2012 13:07

Overhang needs to be cleared still yet though !

[paragon157] 16/1/2012 13:06

Hmm .. Nearly 1.7 Million Buys so far today and only around 150k in Sells on here !

[paragon157] 16/1/2012 13:03

Magpie99

I'm not worried either just strange that you seem so keen to impose your Negative opinion on here when your not invested or do you have a Hidden Agenda and perhaps want to Buy in Cheaper ? .. Lol

[hairballradical] 15/1/2012 22:09

Whoppy and Magpie very interesting comments thanks.

Isn't it amazing how some enlightenment about how a sector operates frightens the pants off some 'high-powered' investors. I know what you're saying is bang on the button but I'm no longer surprised that some mugs don't bother to investigate the businesses they invest in.

Many of these consultancies have, as you say, become bums-on-seats providers. They look more and more like the agencies they get their staff from by the month.

Will wait on Mouchel until there is a significant dilution or 2-3 years which ever comes first.

HBR

[magpie99] 15/1/2012 20:56

I m not worried - not in the slightest. I got out of my construction investment, so I wouldnt have to worry.

As for negative comments - Its just my genuine view based on experience I have. Filter me if you wish, that is not a problem.

As for deramping, there is hardly any share price left to deramp. So that is just not true.

I will continue to give my view as it is my human right to freely express it.

Good luck with your investment, my view was not intended to hurt anyones feelings.

[paragon157] 15/1/2012 20:45

Magpie99

Lol .. Thanks for your Negative Comments as you say you would not invest a Penny in Civil Engineering Construction so stop worrying about it leave it to those who "Do" Invest in them !

[magpie99] 15/1/2012 20:15

PS - Whoppy - Excellent post 2669 - Keep up the bulldog spirit!

[magpie99] 15/1/2012 19:43

It is not a deramp - It is just comment from people who work in the industry. As I made clear in post I do not know how Mouchel are currently performing, they may be going great guns, new management and all that.

I would not invest a penny of my own money in any civil engineering construction company.

You do what you like with your own money. Buy £1m long tomorrow if you are that keen.

[paragon157] 15/1/2012 19:34

Cuttingman2

Lol .. Well said regarding Deramp comment !

[htrocka] 15/1/2012 19:31

Welcome to the real world....this is 2012...NOT 1962.....'times they are a changin'

[cuttingman2] 15/1/2012 19:22

oh dear you are upset with your past employer, sadly this is the real world which you seem not to belong to

[whoppy] 15/1/2012 18:36

cuttingman,

Hi, I have no interest in holding MCHL. Just highlighting the way management conduct themselves at these types of consultants and how hard it is for them to keep their heads above water and the incompetencies that are rife, hence why Mouchels are where it is today. The way they treat their staff should be an indicater as to how they will treat their shareholders. It is a real shame because these companies could be run so much better if engineers were given more recognition so engineering as a whole could have a better reputation than it currently has or how it is held in the public perception, but until the numpties at the top get dropped and the Institute of Civil Engineering pull their finger out in recognising engineering as a professional occupation on a par with accountants, lawyers and doctors and start promoting it as such, then clients will always expect a cheap job and consultants will never be able to flourish but will instead have their backs to the wall. The downgrading of technical studying at schools is another blow and just puts off the young talent that this country has in even considering a career in civil engineering. We need to build and manufacture our way out of the economic climate and clients have to pay a realistic price for the design and planning of projects which currently only accounts for a very small percentage of overall project spends. Investors need to know what they are investing in.

[cuttingman2] 15/1/2012 17:38

nice deramps boys but a bit obvious.

[magpie99] 15/1/2012 12:31

I have also had no pay rise for 4 - 5 years. I want to better myself with training, but am having to pay for training courses out of my own pocket to keep up my CPD. Im sure that the company I currently work for have me in their target for redundancy or want to 'engineer' a change to my terms and conditions. Although this company said they would pay for my professional membership, when I joined them, they have so far not refunded my ICE membership fee, £175.00, which I paid out of my own pocket.

If this industry wants to make an enemy out of me rather than a helper, so be it.

Working at Costa Coffee in many respects could be a step up. It really is that bad.