Mpac Share Discussion Threads

[discodave45] 13/9/2020 16:13

Thanks, some companies are paying back furlough cash (SMS, Redrow, Ikea etc) even though not obligated to.Mpac have not formally stated what assistance they have received so I'm assuming from what they have said that not all employees did return to work during lockdown period. They have a lot of cash and was surprised they cancelled the div (only cost about £370k), perhaps that would have forced their hand in then paying back any furlough cash?. Just wondering.

[castleford tiger] 13/9/2020 13:43

Furlough is not re payable only the loans and I have not seen us take any of those.

tiger

[discodave45] 13/9/2020 12:21

C19 Government assistance received - any guesses as to how much (furlough?) and likelihood of any payback in H2?.

[castleford tiger] 12/9/2020 22:39

It’s not been mentioned but we have either 2 or 3 million earn out still to pay on lambert 2022 from memory.
Margin will be key here but the cost savings from the new bolt on and the chance to hit the European market with their kit leaves huge growth potential.
Have a good weekend
Tiger

[arregius] 12/9/2020 20:50

If you buy Disco, welcome to a long ride here

[discodave45] 12/9/2020 17:42

CTThanks, didn't see that other note, guessing no specific number was given?. The pension is a concern but not a game changer I just wanted to flag it as it is quite significant. Perhaps not in terms of value here but could possibly hinder any future rerating (up to 2024?).Should have posted up as well my glass half full numbers, again not as high as yours but not far off. I reckon Rev, when including Switchback, could be at least £110m. Again using the same bottom line margin of 10% (historically it's been around 7% to 9% so double digit would be an accomplishment in itself). Tax at 12%, then pat comes to £6.7m, eps 33p. Industry peer ratings are about 18, but will use 15 as more in line with a smaller cap company, TP then is 495p.There will obviously be risks as well as rewards that are too unknown at this stage to take into account (stating the obvious I suppose!), but happy now to continue to research and more likely than not to take an initial position.All the best.Ps I've heard/seen two target prices, both at 380p.

[castleford tiger] 12/9/2020 15:57

Discodave.

Its never an issue for me to have "critical" areas of concern looked at in detail.

On the pension issue..........I understand that 33% above the 5.5m and the annual underlying profit will be paid up to a £10m cap.

however there is a note..........

this part of the agreement will fall away in 2021 if the funding deficit is below certain levels.
I understand that a formal valuation will be carried out June 2021.

so it may not be quite as you fear. EPS may well be over 40p.

I think if you look at the LTIP in place you will see the extremely high base figures for these awards to kick in.

I like targets like that.

Your valuation is again a little harsh.

The worry for you is that by being too negative you can miss the boat.
I tent to agree with you profit figures but not your EPS which I have too low and your valuation metric.

To invest you have to feel comfortable and only your own figures will set your mind at rest.

My target of 550p by end of full year 2021 ( just 3 months left of this year) will probably have to be revised as I am sure other bolt on companies may be added.

good luck Tiger

[discodave45] 12/9/2020 12:12

Shaker, sorry also meant to add that their pension schemes are massive when compared to the market cap of the company and for me the corresponding risk and cash outflow is a major red flag.Pension schemes at H1, liabilities £430.4, with assets of £451.5m, hence net defined benefit (asset) of £20.1m on the balance sheet. Which at actuarial may not be the case and could make a big difference, unlikely but as I said I'm looking glass half empty (thus also ignored cash in determining sp).

[shaker44] 12/9/2020 09:19

Discodave, I understand your points but pension deficits are not unusual, will probably turn out to he less than forecast and are more than reflected in the price. Still cheap notwithstanding.

[bwm2] 12/9/2020 08:44

Interesting to note that the Switchback PBT margin is twice that of Mpac

[brummy_git] 11/9/2020 15:05

Podcast out today on Mpac

hxxps://www.linkedin.com/posts/paul-hill-a5994116_88-energy-strategic-minerals-paul-hill-activity-6710168061128843264-lHGx

[discodave45] 11/9/2020 14:53

CTExcellent listening, thanks.Can you put my mind at ease though about the pension deficit. Looked at this following their interims but was put off by the contributions. They will be paying £1.9m (plus 2.1% pa) up to 2024, so on an interim basis it's about 40% of their underlying pre tax / operating profit, that's very significant IMO. Plus if their underlying operating profit exceeds £5.5m (capped at £10m) they pay an additional amount equal to 33% of the difference between this profit and £5.5m. So it's likely that this will be exceeded this FY (and beyond up to 2024) and the pension contribution is increasingly reducing their profits, thus earnings, by more than 40% (if I've interpreted the note 7 in H1 correctly).Should I still be concerned?, thanks.

[bwm2] 11/9/2020 13:33

CT thanks I'll add the 50p so now 520p and +72% at 302p

[someuwin] 11/9/2020 12:20

Cheers CT - Good interview. You make a compelling case for MPAC.

[castleford tiger] 11/9/2020 11:20

I think that's a good stab as only 2020 numbers in the market showing pbt 5.6.

Remember pbt in 2019 was 7.5 m for mpac.

To get to my valuation of 550p a share at the same point I had profit slightly higher at 9.5m and EPS of 42p a share.
Same multiple of 12 = 500p and 50p for the cash remaining =550p

I think either way there is great upside and anything close to the 300p is a one way ticket to at least 50% upside.

I think other deals maybe on the table also.

tiger

[tomps2] 11/9/2020 11:05

MPAC mentioned in this interview with Castleford Tiger.

Video:
Podcast:

[our haven] 11/9/2020 10:54

Apollo One each way in the 3.45 IMO. :)

[bwm2] 11/9/2020 10:30

Got a bit of time today before the racing at Doncaster starts so have had a further review of my expectations for y/e 2021:
Sales 106m
Pbt 8.9m
Pat 7.9m
Eps 39.2p
Looking at ED's sector average of 18.1, I am comfortable with 12x giving:
Tgt price: 470p
@305p +54% upside
I would welcome any comments.

[castleford tiger] 10/9/2020 23:31

Thank you all
We are on something special here I feel with lots more to come.
Tiger

[capercaillie] 10/9/2020 21:24

Yes good webcast. Not easy having yourself laid bare and not knowing what questions you will face over what is a very broad subject. Thanks.

[andy2205] 10/9/2020 16:45

hxxps://www.piworld.co.uk/events/

Njoy.

[arregius] 10/9/2020 16:42

Link to it?