Mpac Share Discussion Threads

[our haven] 17/2/2023 09:30

Results out 22nd March I see.

[castleford tiger] 15/2/2023 08:53

Took a profit on the shares bought at 2.25 my core holding remains.
Any weakness will see me back bargain hunting.
Tiger

[disc0dave45] 14/2/2023 17:03

RedI was simply deducting their payments and costs (that will continue for another two years or so) from their bottom line earnings.Not got my figures wrong, as I've said numerous times now, it's your choice in making any rating / value assessment whether you do as I've done or not. I'd just prefer to do just that as it's a significant sum in comparison to their profits and I wouldn't consider it an exceptional expense that not accounted for, but clearly the market doesn't agree - so be it tbh.Hopefully holders will make a decent profit here it's just not an investment for me for other reasons too.

[redwing1] 14/2/2023 16:17

Disco - I think you have got your numbers wrong. If you look at last year's annual statement you will see that the pension fund is in surplus on an IAS 19 basis but contributions of £1.9m are still being made annually by MPAC to reflect the £35m deficit on a statutory basis. The deficit recovery period was reduced from 14 years to 6 years in 2018 and with bond yields moving favourably since then payments may actualy stop earlier still.

Obviously, MPACs earnings have been volatile for several years now but in a reasonable year the pension payment will only absorb about 20% of free cash flow and so I can't see where your prospective p/e number comes from?

[blackhorse23] 14/2/2023 14:10

Switched to CURY https://www.proactiveinvestors.co.uk/companies/news/1005917/currys-focused-on-restoring-profitability-says-broker-1005917.html

[castleford tiger] 14/2/2023 12:18

Thanks disc0

[mfhmfh] 14/2/2023 11:37

Takeover target due to huge potential?

[value viper] 14/2/2023 10:52

Hhhmm company to make a statement good bad or indifferent but after that rise etc

[disc0dave45] 14/2/2023 10:40

Yep congrats CT :)

[shaker45] 14/2/2023 09:31

I guess you were averaging down Tiger, but you have a nice trading profit on your recent buys.good call. Well done.

[our haven] 14/2/2023 09:15

Pleased to see no profit taking at the opening this morning with buyers taking the lead.

[onjohn] 13/2/2023 23:35

See u at 6 squid

[disc0dave45] 13/2/2023 22:08

I'm deducting their pension payments, as said previously it's personal choice, I'd sooner value the business taking onboard known expenses (it's not exceptional it's been ongoing and reviewed every 3 years). Yes on 10x forward PE if you believe earnings will nearly double when their order book has been decimated - think finals in March will set the scene and hope holders do okay.When you say it's fully funded what do you mean?, it comes from cash generated by the business, or is that what you mean.Until it's reviewed they will be outlaying a fixed sum and incurring costs, then who knows what the payments will be, nobody can say for sure it will be reduced.

[redwing1] 13/2/2023 19:57

Discodave - I don't know how you are calculating your numbers but Equity Development have them making c£7m of pre-tax profit for 25p of earnings next year, putting them on 10x p/e for 2023. Doesn't look expensive to me.

Yes, there is the pension fund issue, but its well funded and bond yields have moved in their favour, so contributions should reduce at the next triennial valuation.

No doubt that 2022 was a disappointment but the risk/reward looks favourable from here.

[disc0dave45] 13/2/2023 17:16

Be interesting to see what their outlook statement says next month, particularly with the drop in orders.So this FY net profit f/cast at £4.5m, deduct at least £2.3m to £2.7m cash they prefer not to expense on underlying numbers and it's on a forward PE of 29x.What's that saying about profit warnings?.

[castleford tiger] 13/2/2023 16:06

Clearly the business and its strong order book has attracted the interest of the tip sheets.
Last year was awful but it’s gone and profits should double in the current year.
I think the management will deliver but not everyone does.
At 10 x eps forecast and net cash it looks cheap.
I still hold my stake
Tiger

[blackhorse23] 13/2/2023 13:28

Switched to CURY

[disc0dave45] 13/2/2023 10:57

Good luck to you too.
They will be reviewing the pension payments next year I believe so it could be reduced, who knows.
The profit warning wasn’t particularly reassuring about the quality of the business either, but each to their own.
No doubt someone will be having a childish dig at my views, all I can say is never ever trust anyone that constantly posts up “alleged”; trades on their holdings and try’s to drown out an opposing view.
All the best.

[disc0dave45] 13/2/2023 10:50

They pay £1.9m pa as a direct pension deficit payment ((which increases by 2.1% pa) and they also incur annual costs, at H1 they stated it was net £0.4m. The annual costs are not included in their underlying numbers and the pension deficit payment doesn't go through the P&L.Folks can choose to ignore £2.3m leaving the business or not, IMO why would you ignore such a large number when valuing the business.

[shaker45] 13/2/2023 10:48

Dave, I understand your views. Personally I am happy to play the Long game because I think mpac are good at what they do, and bespoke packaging will command a premium for years to come. Also I think their deficit payments may diminish despite their funding commitment
But I have been wrong before!
Best of luck

[disc0dave45] 13/2/2023 10:31

Don't think so, they've stated that they are committed to paying £2.3m per annum up to 2025.I'm just flagging that IMO this is a very expensive stock. Even if they hit forecasts it's on a PE of 18x, and IMO their cash outflows for pension deficit payments should be taken on board when rating the business, why would you ignore such a large sum of money leaving the business for years to come!?., the underlying earnings are then only 3p per share (pension payments are equivalent to a hit to earnings of 11p per share (and this isn't a "forecast" it's a known).Appreciate my views are negative but that's how I see it, the plus is they will have a decent amount of additional cash on the books post 2025 - can I be bothered to wait when there are lots of quality businesses out there at much lower ratings!.

[shaker45] 13/2/2023 10:19

Dave, is it possible you over estimate the size of the pension issue? Surely the deficit will get smaller as the market recovers, and mpac can pace themselves, taking longer to fund the deficit??

[our haven] 13/2/2023 10:10

If you wait until all the eggs are lined up, you may as well just buy a index.Sentiment will be very important at this stage in driving the share price up or down. Profits and pension deficits change dramatically in these markets, so we will see where they are going forward.Good luck with your investments.

[disc0dave45] 13/2/2023 09:40

Good morning.....in a word no. Why buy a business whose profits are nearly four times less than cash going out the business to pay pension deficit. That's assuming they even hit their earnings forecast which is questionable.