Mxc Capital Share Discussion Threads

[suneday] 10/5/2019 10:05

At least he's got a job he can handle, probably well. His own departure from Capita doesn't seem to have been exactly voluntary.

[chimers] 09/5/2019 17:45

Oh and I spoke to Parker a while back.
He came in to help IDE as a favour to Smith once on track I expect he might leave.
He is sensible and well grounded I hit him with price scenarios and he didn't flinch.

6p 8p 12p all within recovery range but 30p is asking a bit much was what I took from it all.
But we all kinda knew that anyhoo.

He was apoplectic with what had been allowed to go on and lost for words at the cretinous stupidity and ineptness...criminal was mentioned from memory.

[jayfella72] 09/5/2019 16:51

Some good buying today.....

[suneday] 09/5/2019 13:48

Investors Chronicle

It’s taken time, but investors are warming to the merits of Aim-traded shares of MXC Capital (MXCP:85p), a technology-focused merchant bank run by a management team that backs investee companies they represent. I last outlined the investment case six months ago when I suggested buying the shares (‘MXC cashed up to do deals’, 7 November 2019) ahead of December’s annual results at the equivalent of 65p a share (there was a 50-for-one share consolidation in February 2019). There has been some positive news flow on several fronts that has driven the re-rating.

Firstly, having sold off the company’s shareholding in Castleton Technology (CTP), a provider of technology products and services to the social housing and not-for-profit sectors, at a bumper profit last summer, MXC subsequently increased its holding in Tax Systems (TAX), a leading supplier of corporation tax software to the large corporate sector and the accounting profession in the UK. It proved the right call as that company was taken over by a private equity firm last month. MXC realised £24.2m in cash and made a cash profit of £9.3m on its holding in Tax Systems, representing a 62 per cent gain on its invested capital. As a result MXC had net funds of £23.5m when it released its half year results yesterday, a significant amount in relation to its net asset value of £62.3m, or 97p a share.

Secondly, MXC’s two partnerships are now generating over £1m of fee income. One is with a subsidiary of Liberty Global, the international TV and broadband company, and the other is with Ravenscroft an independently owned investment services group based in the Channel Islands with £4.7bn of assets under administration for private and institutional clients. MXC acts as consultant to Ravenscroft in its role as investment manager to the GIF Technology & Innovation Fund in which the States of Guernsey and MXC are invested. The fund was started with an initial investment pool of £38m of which MXC contributed £5m. Eight investments have been made to date, another four are close to completion and the aim is to be fully invested by year-end.

The joint venture with Liberty Global to create an IT services provider focused on small- and medium-sized business customers within the UK through a series of acquisitions is starting to gain momentum too, having made two new investments earlier this month: Koris Communications, a managed communications provider offering cloud solutions with a specialist focus on Mitel telephony and Skype for Business solutions; and 365 ITMS, an IT services company providing networking, security services. Both joint venture partners have to date invested £3.5m each in the three acquisitions made.

So, with MXC returning to cash profitability in the first half to end February 2019, and Ravenscroft and Liberty Global backing the company – Ravenscroft has paid £2.25m for a 25 per cent stake in MXC’s transactional businesses, so clearly sees value in MXC’s deal makers – then there is potential for the share price to return to a decent premium to net asset value if MXC can achieve its target of delivering a 2.2 times return on capital over the next four to five years.

The proviso being that MXC can replicate the success it enjoyed with Castleton and Tax Systems and stay clear of the poor investments – Redcentric (RCN), a UK IT managed services provider that hit major trouble a couple of years ago being the major one – that blotted its copy book previously. Moreover, given the improvement in trading prospects, and reflecting MXC’s strong balance sheet, the directors are now looking at introducing a capital return programme. Buy.

[jayfella72] 09/5/2019 10:39

https://www.insidermedia.com/insider/central-and-east/joint-venture-acquires-koris-communications-group

[jayfella72] 09/5/2019 00:00

MXC Capital pours more cash into Liberty Global joint venture.https://www.sharecast.com/news/aim-bulletin/mxc-capital-pours-more-cash-into-liberty-global-joint-venture--3880073.html

[chimers] 08/5/2019 12:28

Now that there are only 67m shares in issue any share buyback would really tighten things up.
And remember MXCP has NO DEBT and £23m in cash to go shopping with.

[sentrum1104] 08/5/2019 09:48

It is very unusual to see so much positive rhetoric from Ian Smith as he is usually the master of understatement.I don’t believe he would make these comments unless they were clearly out of the woods.

[1msi] 08/5/2019 09:46

97p here we come

[jayfella72] 08/5/2019 09:32

Great update today. Onwards and upwards.

[suneday] 08/5/2019 09:11

It's turned a corner. Expect a follow up.

[chimers] 08/5/2019 07:28

In conclusion, it has been two testing years to get to a point where we see a normalised trading performance for MXC and I thank our team for all their hard work and loyalty in getting us here. We now have a platform from which to grow again and I am quietly confident that there are good times in front of us and that we will be reporting ever stronger returns as we grow our now established partnerships with Liberty Global and Ravenscroft and look to add new ones.

............AMEN

[chimers] 08/5/2019 07:22

IDE Group Holdings plc ("IDE") and Adept4 plc ("AD4") are the last remaining public company assets that the Group holds and are both investments where MXC tried to scale its business by deploying executive management teams, a strategy which has not rewarded us as investors. We have demonstrated considerable support for IDE and now hold an equity stake of over 40% and loan notes of £8.0 million. We have been fortunate to secure the services of Andy Parker as Executive Chairman of the business and both myself and Max Royde, as the representative of another sizeable investor, sit on the board of IDE, with Charlotte Stranner, an MXC partner sitting as interim CFO. The period has been one of stabilisation as we rapidly sought to right size the company from the bloated state it had become. To date, more than £8 million of costs have been reduced with ongoing initiatives continuing to eat away at the cost base. There are several onerous contracts that the company has to work through which will impact cash generation for the next 18 months but we believe there is a good underlying business and a platform from which we can recover value.

[chimers] 08/5/2019 07:19

MXLG is our joint venture with Liberty Global. The progress to date has been solid rather than exciting but is now gaining momentum. At the period end of these interim statements only one investment had been made but since the period end a further two investments have been completed. There is significant potential in this joint venture to build a UK IT services business. The key to success with this type of roll up, which we have concluded successfully four times previously, is to acquire cost effectively and then retain the hearts and minds of key staff. The pace of acquisitions is very much determined by this ethos and I respect the team's diligence and patience in not rushing in and overpaying for acquisition targets. This will, in turn, pay dividends at the eventual exit. I have every confidence that this joint venture will deliver the customary return on capital that we have seen across our portfolio in previous years.

[chimers] 08/5/2019 07:18

As consultant to Ravenscroft, the investment manager to the GIF, it is the role of MXC to find investments that suit the criteria of the fund. The fund was established with an initial investment pool of £38 million of which MXC have committed to invest up to £5 million. I am pleased to say that a total of eight investments have been made to date with a further four close to completion. This is a fabulous effort from our team and we are confident that the investments will deliver a healthy return for The States of Guernsey and all other shareholders, including MXC. The fund has a ten to twelve-year life and we are hoping to have fully invested or committed the funds by the end of this calendar year allowing a full eight-year period of value accretion. I would like to thank the MXC team in London and the Ravenscroft team in Guernsey for the huge efforts in making this happen.

[chimers] 08/5/2019 07:16

Proposed reintroduction of capital return programme.

[chimers] 08/5/2019 07:15

Investments made during and post period end in relation to the joint venture with Liberty Global plc and the partnership with Ravenscroft Limited to advise the GIF Technology & Innovation Cell;

Both of these relationships are now generating "SIGNIFICANT" revenues for MXC

[suneday] 07/5/2019 16:04

Little bit of positioning/repositioning going on today.

[suneday] 02/5/2019 10:53

They originally said' "The newly established joint venture company will initially seek to undertake a series of acquisitions in order to create an enterprise of size and scale, taking advantage of MXC's knowledge and understanding of the market, Liberty Global's existing network and solutions, as well as the opportunities both parties see to consolidate what remains a fragmented market."
The plan as unfolding seems to indicate a little acorns to great oaks approach, feeding into and from LG's existing resources.

[chimers] 02/5/2019 09:52

Looks like it.
They are in effect buying it off themselves each time but some other noob has to foot the bill each time.

[sentrum1104] 02/5/2019 09:35

So MXC got its money back with interest and fees whilst shoving the company into MXLG with more fees. Good work.