MHM Automation - MHM

[Lizard]

Could have sworn there was an MGL thread somewhere out there, but all the search would give me was the rather ancient BWY thead:
http://www.sharetrader.co.nz/showthread.php?665-BWY-Broadway-Industries-Ltd

New management team in 2011 seem to be pulling things back on track. Combined with strong dairy industry demand (new production lines), potential residential building demand increase, growth from acquisitions (Titan Slicers) and launch of new products (e.g. today's announcement - previously foreshadowed - of North American licence agreement for the S-Clave technology). All starts to look like a baby version of SCT.

Okay, so 21 cps ($58m market cap) is probably more than a little overpriced... compare with SCT at $89m market cap and generating a $5m+ NPAT, whereas MGL managed just $0.8m. However, licensing revenues have the potential to drop through to bottom line rather nicely, so could provide a bit of a boost - especially should S-clave consumables start to kick in around 3-4 years away.

Should be a good first half due to strong order book and initial licence fee, so could be worth a short term trade for now, but otherwise just a heads up as one to keep a lazy eye on. AGM tomorrow may give further guidance.

[noodles]

The stock definitely has potential. From the annoucement...
"the deal should result in Mercer receiving an average royalty of at least 5%"
and
"Mercer estimates the North American sterilization market, including consumables, to be US$1.8 billion per annum"

[noodles]

Did anybody go to the AGM? Would have expected the AGM Presentation to be released by now. This would ensure all participants were equally informed.

Pity. Another cross for the company.

[noodles]

Did anybody go to the AGM? Would have expected the AGM Presentation to be released by now. This would ensure all participants were equally informed.

Pity. Another cross for the company.

They must have heard me curse. The presentation is released.

Only interesting thing to note was that they were looking at funding options for the commercialization of s-clave. (capital raising perhaps?)

[Lizard]

Yes, unclear whether the presentation triggered the sell, but a possible. $3m headroom on the banking facility, but then they say looking at funding options to commercialise S-clave ($2m). So suggestion there is both a cap raise AND that they may be soaking up working capital in the rest of the business.

Good and bad. Still think it is watchlist material - and would be good for it to get back to 10-14cps...

[janner]

Yes, unclear whether the presentation triggered the sell, but a possible. $3m headroom on the banking facility, but then they say looking at funding options to commercialise S-clave ($2m). So suggestion there is both a cap raise AND that they may be soaking up working capital in the rest of the business.

Good and bad. Still think it is watchlist material - and would be good for it to get back to 10-14cps...

One of the more interesting ones IMHO Liz..

But there are so many :-)

[janner]

The stock definitely has potential. From the annoucement...
"the deal should result in Mercer receiving an average royalty of at least 5%"
and
"Mercer estimates the North American sterilization market, including consumables, to be US$1.8 billion per annum"

To much enthusiasm noodles.. Down boy.. Down !!..

[noodles]

To much enthusiasm noodles.. Down boy.. Down !!..

Agreed. I will wait for it to become reasonably priced on it's current earnings. Then s-clave can be a free upside option.

[Snoopy]

New management team in 2011 seem to be pulling things back on track. Combined with strong dairy industry demand (new production lines), potential residential building demand increase, growth from acquisitions (Titan Slicers) and launch of new products (e.g. today's announcement - previously foreshadowed - of North American licence agreement for the S-Clave technology). All starts to look like a baby version of SCT.

Okay, so 21 cps ($58m market cap) is probably more than a little overpriced... compare with SCT at $89m market cap and generating a $5m+ NPAT, whereas MGL managed just $0.8m. However, licensing revenues have the potential to drop through to bottom line rather nicely, so could provide a bit of a boost - especially should S-clave consumables start to kick in around 3-4 years away.

AGM tomorrow may give further guidance.

Reviewing the AGM presentation to see how 'baby SCT' measures up. The profit history looks terrible (p3) five years of solid losses before the modest profit this year. Perhaps this is a result of the multisector push into IP (p15)? The 'Leak Detector' has finally been completed, so at last all of those losses that plagued the company in prior years have been stemmed?

Now we go to the balance sheet, page 27 of the FY2013 Annual Report. Trade receivables roughly match trade payables -OK. My main concern is the increase in borrowings (note 20, FY2013 report) up from $4.967m (FY2012) up to $6.337m (FY2013). Now $6.337m on total assets of $31.086m represents total long and short term debt to equity apportionment on 20:80. Pretty good, but not in the league of SCT who have a policy of zero term debt.

ROE based on shareholder equity of $17.233m and $0.778m of profit ignoring currency translation differences is just 4.5%.

Poor little baby! Perhaps best to put him back in the intensive care business incubator for another year and see what happens. I think he will pull through but he needs some better numbers behind him before I would become a supporter.

SNOOPY

discl: hold SCT and it is analyses like these that make me realize what a good investment, in relative terms, it is

[whatsup]

WOW approx. 11% changed hands today, whose selling and WHATSUP ?

[percy]

Maybe the Hubbard Churcher holding?
16cents per share.$5mil for Creditors?

[Joshuatree]

CEO sold $1 million of shares to take up re his 7c options. The rest, who knows,but good to see int hotting up. I hold.

[whatsup]

WOW approx. 11% changed hands today, whose selling and WHATSUP ?

Well done percy, Hubbard selling and Milford buying,

[whatsup]

WOW approx. 11% changed hands today, whose selling and WHATSUP ?

Well done percy, Hubbard selling and Milford buying,

[kyanar]

Hubbard sold down to 0%, and Milford snapped it up. Given Milford's track record, could this be a buy worth looking into?

[Joshuatree]

Hubbard sold down to zero from 11.3% , Milford have bought re 5% atm. Other buyers piling in since.

[janner]

Hubbard sold down to 0%, and Milford snapped it up. Given Milford's track record, could this be a buy worth looking into?

It is in my comp pick !!..

Joshuatree being I think, the only other one to pick it..

Disc.. Holding. DYOR.

[percy]

It is in my comp pick !!..

Joshuatree being I think, the only other one to pick it..

Disc.. Holding. DYOR.
Bet you wished you had brought at 16cents too.!!!
At today's closing price of 25cents you would be a very happy chappy.! lol.

[janner]

Bet you wished you had brought at 16cents too.!!!
At today's closing price of 25cents you would be a very happy chappy.! lol.

Percy.. I am a very happy chappie with all of my holdings since 01/01/2014..

Well maybe not APN.. BUT !!!..

DYOR !!

[percy]

Mr.Rodger Shepherd exercises options [free?] to buy shares at 7 cents.
Milford Fund purchases shares at 16cents.
Percy decides he will not pay 25cents.!

[janner]

Mr.Rodger Shepherd exercises options [free?] to buy shares at 7 cents.
Milford Fund purchases shares at 16cents.
Percy decides he will not pay 25cents.!


Miserable B- astard :-)).. or is that just Cheap B- astard :-))

[percy]

Miserable B- astard :-)).. or is that just Cheap B- astard :-))

Neither,nor a Silly B-astard.!! lol

[janner]

Neither,nor a Silly B-astard.!! lol


hahahaa.. Eat your heart out in private perc..

DYOR.. ..

[percy]

Think I should have said Dilly B rather than Silly B.
Must admit I have not done a lot of research,then again I do have a long memory? Think about that?!! lol.

[janner]

Think I should have said Dilly B rather than Silly B.
Must admit I have not done a lot of research,then again I do have a long memory? Think about that?!! lol.

Your memory is still in short pants compared to mine .. :-))

[janner]

Oooops off topic..

Sorry Joshuatree.. The and me being the only ones interested in MGL.

[percy]

Your memory is still in short pants compared to mine .. :-))

Haha,We agree on that.!!! lol.
JT Take no notice of my posts.![on this thread,]

[percy]

We agree on that.!! lol.
JT Take no notice of my posts on this thread.Janner is always right.!! lol.
Oh no I done it again!

[janner]

We agree on that.!! lol.
JT Take no notice of my posts on this thread.Janner is always right.!! lol.
Oh no I done it again!

Oh !!. You never met the ex did you :-)

Yeah yeah.. get a room :-)) Sorry JT..

[Lizard]

Grrr... I only have a few - bought about $2k worth at 21cps to make myself watch them (and in case of an spp) and was waiting for them to get down to something reasonable like 14cps to buy more...looks less likely than it did!

[percy]

The questions are:
Why did Milford pay only 16 cents if Mercer prospects are so good?
Why did NZ's top broker First NZ Capital only manage to sell Mercer shares at 16 cents if Mercer prospects are so good?
Why did Humphry Rolleston/Murray and Co not buy the Hubbard shares if Mercer prospects are so good?
And finally,how many years will it take before Mercer's are in a position to pay a dividend?

[percy]

The questions are:
Why did Milford pay only 16 cents if Mercer prospects are so good?
Why did NZ's top broker First NZ Capital only manage to sell Mercer shares at 16 cents if Mercer prospects are so good?
Why did Humphry Rolleston/Murray and Co not buy the Hubbard shares if Mercer prospects are so good?
And finally,how many years will it take before Mercer's are in a position to pay a dividend?
Maybe they all thought 16 cents was fair value for Mercer shares.!

[Lizard]

Still think it is watchlist material - and would be good for it to get back to 10-14cps...

I think Brian's calculations probably came up similarly to mine - but he has had to pay up a bit more to get the quantity than what I wanted... mind you, now he may have forced the rest of us to pay up even more! Would think it should retrace at least to 20-22cps though?

[Joshuatree]

Mercer is Morphing again and it looks pregnant with promise. The Mercer S-Clave Sterilization Technology System for one piqued my int in looking further.

[Joshuatree]

Yeah yeah.. get a room :-)) Sorry JT..[/QUOTE]

Don't be sorry guys , but by the looks you'd go down well in the After Market Lounge. Enclosed are 2 free passes(for eternity:). Most things are free but you're musical selections on the JukeBox may be edited. It is a quaint custom that patrons enter with a signature dance. Suggestions could be "The Mercer Morph" , "The SillyDilly" The Trippin Bloody B" "JannerJunket Jinx" The PercyPirouette " "Too Empty Heads Swing" "TeasetheB ""BangTwoHeadsTogetherAndClapYourHandsForJoy"etc

[Joshuatree]

"S-Clave by Mercer:The next natural progression in the field of steam sterilization"
" The S-Clave offers the potential to change the dynamics of the sterile services market internationally and to significantly reduce the total operational expenditure of sterilization, whilst achieving a reduced carbon footprint and a reduction in cross contamination or transference of infection for the medical profession"

[percy]

Yeah yeah.. get a room :-)) Sorry JT..

Don't be sorry guys , but by the looks you'd go down well in the After Market Lounge. Enclosed are 2 free passes(for eternity:). Most things are free but you're musical selections on the JukeBox may be edited. It is a quaint custom that patrons enter with a signature dance. Suggestions could be "The Mercer Morph" , "The SillyDilly" The Trippin Bloody B" "JannerJunket Jinx" The PercyPirouette " "Too Empty Heads
Swing" "TeasetheB ""BangTwoHeadsTogetherAndClapYourHandsForJoy"etc[/QUOTE]



"Too Empty Heads Swing" sounds about right.!!! lol.

[percy]

"S-Clave by Mercer:The next natural progression in the field of steam sterilization"
" The S-Clave offers the potential to change the dynamics of the sterile services market internationally and to significantly reduce the total operational expenditure of sterilization, whilst achieving a reduced carbon footprint and a reduction in cross contamination or transference of infection for the medical profession"

When do they expect to sell this product?

[SirPrize]

So what's the educated forecast on these guys for the next few weeks?

[Joshuatree]

A piece of string will be sent to you ;SirPrize

[Joshuatree]

A piece of string will be sent to you ;SirPrize

[SirPrize]

Oh thanks, can't wait. :)

[GRIFFIN]

Hey Josh how long will the piece of string be so that SP knows how many loose ends he can tie up.

[percy]

Mercer share prices????
Market today; buyer 22 cents ,seller 23 cents.
Milford paid 16 cents.
Shepherd converted [free] options at 7.5 cents.
Today off market sale of 3,000,000 at 20 cents.Is that you buying Lizard?
Nice to see there are so many different prices people pay.
Reminds me of those "multi level " marketing companies.Was it Amway who led the field?Are they still in business?

[percy]

Mercer share prices????
Market today; buyer 22 cents ,seller 23 cents.
Milford paid 16 cents.
Shepherd converted [free] options at 7.5 cents.
Today off market sale of 3,000,000 at 20 cents.Is that you buying Lizard?
Nice to see there are so many different prices people pay.
Reminds me of those "multi level " marketing companies.Was it Amway who led the field?Are they still in business?

[stoploss]

Mercer share prices????
Market today; buyer 22 cents ,seller 23 cents.
Milford paid 16 cents.
Shepherd converted [free] options at 7.5 cents.
Today off market sale of 3,000,000 at 20 cents.Is that you buying Lizard?
Nice to see there are so many different prices people pay.
Reminds me of those "multi level " marketing companies.Was it Amway who led the field?Are they still in business?

I'm with you Percy, reckon if they want to put through business @ 20, they should have to clean out any buyers 22,21 and 20. Winds me up when I am sitting on a price and trades get crossed through at the same price .

[winner69]

The questions are:
Why did Milford pay only 16 cents if Mercer prospects are so good?
Why did NZ's top broker First NZ Capital only manage to sell Mercer shares at 16 cents if Mercer prospects are so good?
Why did Humphry Rolleston/Murray and Co not buy the Hubbard shares if Mercer prospects are so good?
And finally,how many years will it take before Mercer's are in a position to pay a dividend?
Maybe they all thought 16 cents was fair value for Mercer shares.!

Fair value stills seems to be 16 cents .... top of the loser board today

[percy]

Well I note there is a brave buyer there at 16 cents.Brave as the SP is now under both the 50 day and 200 day moving average.Think it is called a death cross.?

[percy]

Pretty illiquid stock with no discernible long term movement ya got there percy. think its pretty range bound with constanst crosses so don't think it applies nearly as much in this case.

Yet the seller of 6mil shares at 25cents, the week of 20th January 2014, certainly timed "the discernible long term" right. !! lol.

[Beagle]

Percy mate...just a heads-up. The former accountant of Mercer is a friend of mine and this really is a DOG of a thing and nothing has changed since he left...if anything its got worse. Senior management wouldn't know **** from clay if they fell into it and certainly wouldn't have the faintest idea how to manage their way out of it..is the word I got on this flea ridden mongrel.

[whatsup]

Percy mate...just a heads-up. The former accountant of Mercer is a friend of mine and this really is a DOG of a thing and nothing has changed since he left...if anything its got worse. Senior management wouldn't know **** from clay if they fell into it and certainly wouldn't have the faintest idea how to manage their way out of it..is the word I got on this flea ridden mongrel.

STRONG WORDS here Roger , from my knowledge this co is run by the Ch-Ch mafia and very keen to make a go of it now that the SCF situation has been sorted.

[Beagle]

Just reporting what I was told in good faith. He's a good bloke and a straight shooter and doesn't talk B.S. in my opinion.

[whatsup]

Just reporting what I was told in good faith. He's a good bloke and a straight shooter and doesn't talk B.S. in my opinion.

Be very careful here, he could be traced and charged with slander/defimation or something a very expensive exercise for him.

[zigzag]

Percy mate...just a heads-up. The former accountant of Mercer is a friend of mine and this really is a DOG of a thing and nothing has changed since he left...if anything its got worse. Senior management wouldn't know **** from clay if they fell into it and certainly wouldn't have the faintest idea how to manage their way out of it..is the word I got on this flea ridden mongrel.

Mercer has changed a lot over the last year. Are you sure your information isn't historical, as in dated?

[Beagle]

Sorry but I'm not going to elaborate any further on what I've already posted.

[percy]

Sorry but I'm not going to elaborate any further on what I've already posted.

Thank you for your thoughts.
I note they were addressed to me and are historical.
Zigzag.Hope you are right.

[winner69]

At least they are profitable now.

I always get Methven and Mercer mixed up .....oh well they both do steel things around the kitchen and like places

Maybe they should merge

[percy]

At least they are profitable now.

I always get Methven and Mercer mixed up .....oh well they both do steel things around the kitchen and like places

Maybe they should merge

You remind me of the blonde who had C & A marked on her knickers so she put them on right way round.!!

[winner69]

You remind me of the blonde who had C & A marked on her knickers so she put them on right way round.!!

Sorry Percy I don't get it

Googled C&A and freedictionary.com gave me a list of what it could stand for but couldn't see any relevance to a blonde's knickers

At least a Mercer sinktop migh have Methven taps attached

[percy]

[QUOTE=winner69;480489]Sorry Percy I don't get it

Googled C&A and freedictionary.com gave me a list of what it could stand for but couldn't see any relevance to a blonde's knickers

Keep working on it!!!

[zigzag]

[QUOTE=winner69;480489]Sorry Percy I don't get it

Googled C&A and freedictionary.com gave me a list of what it could stand for but couldn't see any relevance to a blonde's knickers

Keep working on it!!!
Or then again, maybe you shouldn't bother. All I can think of is just a bit too descriptive.

[karen1]

! some people need a lesson in how to google. It's not what you ask, it's how. https://answers.yahoo.com/question/index?qid=20081204102825AAHk9pX read the Best Answer. Then stop working on it!!! Before someone ends up with a very red face...

[winner69]

! some people need a lesson in how to google. It's not what you ask, it's how. https://answers.yahoo.com/question/index?qid=20081204102825AAHk9pX read the Best Answer. Then stop working on it!!! Before someone ends up with a very red face...

Karen, I did some more research on that site and came across a lot of Essex girl jokes .....and I thought the Naenae sheilas were pretty bad

Shasta fancied the Hutt girls .....wonder where Shasta has got to

[percy]

! some people need a lesson in how to google. It's not what you ask, it's how. https://answers.yahoo.com/question/index?qid=20081204102825AAHk9pX read the Best Answer. Then stop working on it!!! Before someone ends up with a very red face...

Well done Karen1.
Right on the button,!!! [as usual],I must blame my daughters' sense of humour.!
I really enjoyed it!!
lol.

[karen1]

ha ha winner! Yes, would like to hear from Shasta again, I miss some of the old hands here. Percy, fancy blaming your daughter!

[couta1]

Sorry Percy I don't get it

Googled C&A and freedictionary.com gave me a list of what it could stand for but couldn't see any relevance to a blonde's knickers

At least a Mercer sinktop migh have Methven taps attached
Percy might need his mouth washed out with soap whilst hanging over a mercer tub followed by a good rinse from a methven tap, in the mean time winner your task is to put M&M in alphabetical order

[Beagle]

Maybe he and I should get a good spanking with a Mercer stainless steel rod for our politically incorrect posts today :D

[percy]

Maybe he and I should get a good spanking with a Mercer stainless steel rod for our politically incorrect posts today :D

I am up for it next time I am in Auckland.!
Does Mistress X still do out calls?

[winner69]

Percy might need his mouth washed out with soap whilst hanging over a mercer tub followed by a good rinse from a methven tap, in the mean time winner your task is to put M&M in alphabetical order

Does the red one come before the yellow one couta

[winner69]

Percy non comprende

So I googled this Mistress X to find out what you mean .....omg people don't do these sort of things do they?

Trouble with living a sheltered life in Wellington

[couta1]

Does the red one come before the yellow one couta
Awesome winner you cracked it now seriously your the first to do that as far as anyone ive asked is concerned,my wife thought that was pretty cool as well:cool:

[percy]

Percy non comprende

So I googled this Mistress X to find out what you mean .....omg people don't do these sort of things do they?

Trouble with living a sheltered life in Wellington

Sheltered life in Wellington?
I thought it was the sin city of NZ.
Just keep to your Rata planting program.
Couta1.M&Ms.Ours get eaten before we can put them in any sort of order.!

[winner69]

Percy .....the trick is to put all m&m in a row ......eat them all except one .......the remaining m&m will be in alphabetical order

[percy]

Percy .....the trick is to put all m&m in a row ......eat them all except one .......the remaining m&m will be in alphabetical order

Classic.!!! You have done it again!!!! lol.

[couta1]

Percy .....the trick is to put all m&m in a row ......eat them all except one .......the remaining m&m will be in alphabetical order
Winner your cryptic skills are so good it almost makes me want to buy some Mercer shares to go with my Methven ones I just have to work out which of the Mz will produce the most gain in the long run:scared:

[Xerof]

Does mistress X still offer barrel rides over Huka Falls, as an extra?

[percy]

Does mistress X still offer barrel rides over Huka Falls, as an extra?

Not sure.
Did you enjoy it?

[Xerof]

Oh, sorry, confusing Mistress X with Plumley-Walker's dominatrix. He went sans barrel, and I believe demand dried up after that :eek2:

[winner69]

To refresh your memory Xerof

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10605252

[winner69]

and a lame joke (google things and all sorts of strange things (esp for a Wellington lad) comes up

What was the last thing Peter Plumley-Walker said before they threw him off the Huka Falls?






"How much is this gonna cost me?"

[winner69]

Mercer has changed a lot over the last year. Are you sure your information isn't historical, as in dated?

Moosie, in response to you question I think zigzag has some MGL

Must get thread back on track

It is sharetrader after all

[winner69]

Winner your cryptic skills are so good it almost makes me want to buy some Mercer shares to go with my Methven ones I just have to work out which of the Mz will produce the most gain in the long run:scared:

So you did buy a few at 18 today .....well done

[Joshuatree]

"little nuances in life":0 Its a sign moose, boots and all....not,but int potential i mean how many spekkys do you need to polishup a turd.

[winner69]

Goodness gracious - they used that word in the headline.

Don't think I'll bother read the rest


Mercer Group well positioned for growth
8:32am, 29 Aug 2014 | FLLYR

[percy]

Goodness gracious - they used that word in the headline.

Don't think I'll bother read the rest


Mercer Group well positioned for growth
8:32am, 29 Aug 2014 | FLLYR

You were right not to read it!!!!!!
With the word "significant" only used the once it remains a "hold" for the true believers.
No dividend in 2015.

[Beagle]

W69 I couldn't help myself and had a quick look back at the financial results for the last five years. SP and results speak for themselves. Really this company seems all but immune to all known flea treatments with one year exception when for reasons unknown the fleas seemed more interested in biting elsewhere. Good companies deliver results and extremely poor ones deliver one excuse and promise after another.

[noodles]

W69 I couldn't help myself and had a quick look back at the financial results for the last five years. SP and results speak for themselves. Really this company seems all but immune to all known flea treatments with one year exception when for reasons unknown the fleas seemed more interested in biting elsewhere. Good companies deliver results and extremely poor ones deliver one excuse and promise after another.
They forecast profit growth every year at this time. Maybe this year?

[Beagle]

YEAH RIGHT LOL, its a Friday someone hand me another Tui's..., maybe wait till this afternoon :)

[winner69]

The guru guys at Milford believe the story

[winner69]

OK just checked on the headlines this time of year. I think they are on the cusp .... of something but heavens knows what

2014: Mercer Group well positioned for growth

2013: Mercer reports strong progress in 2013

2012: Mercer back in black

2011: No headline could hold embarrassment of a $9m loss

2010: No headline could hold embarrassment of a $3m loss

[whatsup]

OK just checked on the headlines this time of year. I think they are on the cusp .... of something but heavens knows what

2014: Mercer Group well positioned for growth

2013: Mercer reports strong progress in 2013

2012: Mercer back in black

2011: No headline could hold embarrassment of a $9m loss

2010: No headline could hold embarrassment of a $3m loss


IMO the only thing keeping MGL together over the last couple of years in the exercise of ex options , extended banking loans and "new" bank facilities , increased T O in a announced way just has not eventuated.

[Joshuatree]

Still have my tiny toe holding in case one of their ventures takes off. Maybe a broom laced with Frontline needs to be swept through the Head office. You'd think the stainless division for one would be v creaming it with all the work in milk powder drying factories etc going on.

[Beagle]

Head office management have a HUGE sense of entitlement is the insider word I got. That and NFI what they're doing.

[Joshuatree]

Head office management have a HUGE sense of entitlement is the insider word I got. That and NFI what they're doing.

"Mr shephard is also entitled to 1% of the shares after the AGM on the first,2nd and 3rd anniversary of his appointment and in 2014 he was issued 2,396,957 shares in accordance with note 27. The Group is required to pay tax on the shares.

n feb 2014 Mr R Shephard execised 14,285.714 options which raised $1,000,000."
At 30th June Mr shepherd has options to purchase 11,764,706 shares @ 8.5c on 2 Dec 2014

[Joshuatree]

Weird i cant find specific details re what salaries etc management earn, surely that is requirement in an annual report.
All i can find is Key management personnel compensation and some figs that add up to $1,885,000.

Any one more savvy re this requirement have some comments? be appreciated. Trying to find out besides all the shares and options Shepherd and co are feeding themselves on.

[Beagle]

As far as I know they are required by law to disclose the numbers of staff in salary bands within a range of $10,000 for all staff earning over $100,000. Everyone else seems to make that disclosure don't they ??

[percy]

Weird i cant find specific details re what salaries etc management earn, surely that is requirement in an annual report.
All i can find is Key management personnel compensation and some figs that add up to $1,885,000.

Any one more savvy re this requirement have some comments? be appreciated. Trying to find out besides all the shares and options Shepherd and co are feeding themselves on.

I could only find the same as you.Bit naughty putting it all together.
I wonder whether Milford will be linning up to buy more shares off Shephard at 16 cents once he has converted them at 8.5 cents.?

[Joshuatree]

Have emailed NZX re this. Would be easy money eh percy. "Huge sense of entitlement" could be. Maybe Milford and us could call a meeting and roll some folks if this is under performing and management are over rewarding themselves;IF.

[percy]

Have emailed NZX re this. Would be easy money eh percy. "Huge sense of entitlement" could be. Maybe Milford and us could call a meeting and roll some folks if this is under performing and management are over rewarding themselves;IF.

After writing four different replies I think ,to save myself from being sued,I will just say "no comment."!!!!!!!!!!!!!!!!!! lol.

[Joshuatree]

Maybe 3 would have sufficed lol

[Beagle]

https://www.youtube.com/watch?v=e_E7hRdYb5o
For some strange reason that I can't possibly explain for legal reasons, this short clip seems appropriate.

[Joshuatree]

Ooooh very mischievous :DI know you don't mean Percy Rog

[Joshuatree]

Well got a reply . Seems they don't have to disclose what individuals esp CEO are earning!!! So we don't know what Shephards income is on top of his shares/options; doesn't give one confidence. and wheres the transparency?

Good afternoon

Thank you for your email.


The requirement for a company to include in the annual report the number of employees (not being directors of the company) who received remuneration in excess of $100,000 pa and the total remuneration of each Director is a Companies Act requirement, rather than a Listing Rules requirement.


Please see section 211 Companies Act 1993 - http://www.legislation.govt.nz/act/public/1993/0105/latest/DLM321118.html


I note that at page 19 and page 21 of Mercer Group Limited's annual report has included this information. Please see attached.


Please let me know If you consider any further information should have been disclosed.


Kind regards,

Kate Maclean
LEGAL OFFICER

[percy]

As Mr.Shepherd "is a director" I think his total remuneration should be shown,as should each director's,rather than grouping them together.

[Joshuatree]

Cheers percy have emailed back re this and saying i have never not been able to see what the CEO, CFO's etc remuneration package is and that surely that is a legal requirement.

[percy]

Cheers percy have emailed back re this and saying i have never not been able to see what the CEO, CFO's etc remuneration package is and that surely that is a legal requirement.

I think you must qualify it "as he is a director",and to comply with the companies act each director's remuneration should be given.
They have set out all his options very clearly,however they are only part of Shepherd remumeration.COE,director,options all add up to total remuneration.

[percy]

And so the fun continues??????
Today's announcement takes the "Percy Award" for lack of information.!!!
A Dowman paid $1 in full for 1,785,714 options.....
What was not stated was the price they convert at,or the date they expire.!!!!

[winner69]

And so the fun continues??????
Today's announcement takes the "Percy Award" for lack of information.!!!
A Dowman paid $1 in full for 1,785,714 options.....
What was not stated was the price they convert at,or the date they expire.!!!!

Weird ....just got an email from Linkedin suggesting I connect with Alan Dowman because I might know him

LinkedIn must think we have something in common ....ha ha

Percy, no idea what the answer to your query is. Maybe in next Annual Report

[Joshuatree]

I think you must qualify it "as he is a director",and to comply with the companies act each director's remuneration should be given.
They have set out all his options very clearly,however they are only part of Shepherd remumeration.COE,director,options all add up to total remuneration.

I tried again with NZX but no reply2nd time. Do you want to have ago, maybe percy? You'd make more sense. Be good to find out ire the sense of "entitlement" .

[percy]

I tried again with NZX but no reply2nd time. Do you want to have ago, maybe percy? You'd make more sense. Be good to find out ire the sense of "entitlement" .

See how I go on Monday,I will ring the company secretary,see whether he/she/it gives me the information.
Can't be bothered ringing NZX, as they will only muck me around.
I don't hold shares in Mercer.
Could be fun if any one has funds with Milford,to give them a ring and ask if they know the details.Would expect Milford would/should get answers quicker than us.

[percy]

Will have to try again tomorrow as the company secretary Tobin Blathwayt is on leave today.

[percy]

Well rang Tobin this morning.Out until 2pm.Rang at 2.12pm and got the answer phone.
Now we will soon see whether Tobin passes the first Percy test.!!!!Can Tobin return a call?
Wait and we will see.!

[percy]

Well rang Tobin this morning.Out until 2pm.Rang at 2.12pm and got the answer phone.
Now we will soon see whether Tobin passes the first Percy test.!!!!Can Tobin return a call?
Wait and we will see.!

Well it is now 25 hours later and Tobin has failed to return my call.
No surprises there.!!

[Under Surveillance]

Well it is now 25 hours later and Tobin has failed to return my call.
No surprises there.!!
Must come from the same charm school as the fellah Fala from Methven that ignored your call.
Wasn't long before Fala got the bums rush from Methven, maybe Tobin is soon to be binned by Mercer.

[percy]

Must come from the same charm school as the fellah Fala from Methven that ignored your call.
Wasn't long before Fala got the bums rush from Methven, maybe Tobin is soon to be binned by Mercer.

You have a good memory!!!!
If they can not return a phone call,I will not bother investing in their company.
Has served me well !!!!

[winner69]

You have a good memory!!!!
If they can not return a phone call,I will not bother investing in their company.
Has served me well !!!!

I have broken that rule lately

Should I sell then?

[percy]

I have broken that rule lately

Should I sell then?

No, I think the reason he will not return your calls is that he knows you too well!!! lol.

[percy]

Well it is now 25 hours later and Tobin has failed to return my call.
No surprises there.!!

And so time moves on.
A week of waiting for Tobin to return my call.!
Waiting in vain.
Why am I not surprised???!!!!!!!!!!

[percy]

Given up on Tobin.
Thinking if any sharetrader should get lost out in the bush,instead of calling out for help,you only need to shout out "I want to buy some Mercer shares." The sellers would find you quicker than any search and rescue team!!!!!!!!!!!!!!!!!!!!!!!!!!

[Joshuatree]

AGM today. Anyone going?.Should be very int; like the CavalierAGM, with management brought to account for poor performances, by the likes of shareholders Milford.

[percy]

Yesterday's announcement that both the CEO and CFO are leaving the company at the end of August,confirms that yet again, the on going challenges at MGL continue.
I am not surprised!!!

[Joshuatree]

Great news!. If new CEO and CFO are any good , things could improve substantially; but legacy issues like all the free/cheap shares/options management got etc maybe hangover. Shepherd has 35 million shares and tobin 3 million plus.

[percy]

Great news!. If new CEO and CFO are any good , things could improve substantially; but legacy issues like all the free/cheap shares/options management got etc maybe hangover. Shepherd has 35 million shares and tobin 3 million plus.

JT There is an old Buffett saying which goes something like this,"When people with a good reputation join a business with a bad reputation,it is the business's reputation that remains."
Would the kind pedantic poster, fungus pudding, be so good as to post the correct quote.
Mercer has been "born again" so many times over the years I see how true Buffett's saying is.
What price do you think the CEO and CFO will be able to sell their shares for???
My guess is for very little.!!

[Joshuatree]

They paid so little or nothing for their shares whatever they get will be cream at shareholders expense.
So many companies get turned around with the right management.
This is a good thing. Keeping my tiny position.
Bring on the new BROOM.!

[percy]

They paid so little or nothing for their shares whatever they get will be cream at shareholders expense.
So many companies get turned around with the right management.
This is a good thing. Keeping my tiny position.
Bring on the new BROOM.!

Running out of brooms.I think Shepherd's options convert /converted at 7 cents.
Looks as though your tiny position will get tinier!
This company should have been in the box seat, enjoying great years, supplying the wine and dairy industry, with stainless steel products in the boom years others have enjoyed.
Funny how people/companies who do not return phone calls seem to fare poorly.An early sell signal?
Well it is something I place importance with."It really works."!!!!!!!!!!!!!!!!!!

[Joshuatree]

Yes thanks for doing the ringing Percy. ;). Of course it all depends if the new brooms are better with shareholders interests at heart.A good sector for good management to make a turnaround.
Lets see how this pans out and revisit this in 6 months /a year.

[whatsup]

Running out of brooms.I think Shepherd's options convert /converted at 7 cents.
Looks as though your tiny position will get tinier!
This company should have been in the box seat, enjoying great years, supplying the wine and dairy industry, with stainless steel products in the boom years others have enjoyed.
Funny how people/companies who do not return phone calls seem to fare poorly.An early sell signal?
Well it is something I place importance with."It really works."!!!!!!!!!!!!!!!!!!


Mind you I somehow think that the management was supplying the co with "cheap " money by exercising their oppies so that it stayed within its banking covernants .

[percy]

Mind you I somehow think that the management was supplying the co with "cheap " money by exercising their oppies so that it stayed within its banking covernants .

So have they run out of money, and resigning as they can not keep supporting the company???
Look for to their jobs being advertised;"The successful applicant will need a capital base of approx. $5 to $10mil to be able to continue management's practice, of financially supporting the company." lol.
I can't remember the last time the CEO and the CFO resigned from a company at the same time,especially when they both had significant holdings.
I hope for shareholders' sake I am wrong, but "job done" does not cut the mustard for me.

[Joshuatree]

Percy mate...just a heads-up. The former accountant of Mercer is a friend of mine and this really is a DOG of a thing and nothing has changed since he left...if anything its got worse. Senior management wouldn't know **** from clay if they fell into it and certainly wouldn't have the faintest idea how to manage their way out of it..is the word I got on this flea ridden mongrel.

Hopefully someone like Chalkie will do an article on Mercer.

[Beagle]

Percy mate...just a heads-up. The former accountant of Mercer is a friend of mine and this really is a DOG of a thing and nothing has changed since he left...if anything its got worse. Senior management wouldn't know **** from clay if they fell into it and certainly wouldn't have the faintest idea how to manage their way out of it..is the word I got on this flea ridden mongrel.


Just reporting what I was told in good faith. He's a good bloke and a straight shooter and doesn't talk B.S. in my opinion.


W69 I couldn't help myself and had a quick look back at the financial results for the last five years. SP and results speak for themselves. Really this company seems all but immune to all known flea treatments with one year exception when for reasons unknown the fleas seemed more interested in biting elsewhere. Good companies deliver results and extremely poor ones deliver one excuse and promise after another.


Head office management have a HUGE sense of entitlement is the insider word I got. That and NFI what they're doing.

You can rely on this politically incorrect old dog to give a good loud bark when required :)

[Joshuatree]

Thanks for the rest of your barks Roger:). I really hope Chalkie or someone does a column on MGL. We never even found out what management were earning; they never disclosed it and NZX said they didn't have too!!!. I have never come across that lack of transparency before. Will hold my little parcel in the hope that new management may turn this around as its in a good sector; but will dump if not.

[Beagle]

Thanks for the rest of your barks Roger:). I really hope Chalkie or someone does a column on MGL. We never even found out what management were earning; they never disclosed it and NZX said they didn't have too!!!. I have never come across that lack of transparency before. Will hold my little parcel in the hope that new management may turn this around as its in a good sector; but will dump if not.

Your welcome mate, a good guard dog enjoys a good bark or four :) I've never seen this lack of transparency either...no point referring it to the FMA. I suspect watching grass grow will be faster, more entertaining and won't cost you anything, so more rewarding. These "gentlemen" will be keen to sell their "hard earned" stake so what hope for any relief for the SP anytime soon...

[minimoke]

We never even found out what management were earning; they never disclosed it and NZX said they didn't have too!!!. I have never come across that lack of transparency before. Will hold my little parcel in the hope that new management may turn this around as its in a good sector; but will dump if not.
Isn't that information in the Annual report? Someone earning $390 - $400K(presume CEO) and someone on $220 - $229K - presume CFO. These include $92,000 in options. The other salary bands are shown and you could extrpolate against heads. Eg I reckon the CEO (??? Account Manager Manager) of Titan Slicers is on the $150 - $160 band.

CEO and CFO leaving at same time is very telling. That the Board was unable to secure one or other for another year suggests to me they are ready to flee at all costs.

Seems to me to be a wildly diversified company with no real direction in terms of product mix and markets. Bacon slicer, Milk Tanker, Autoclave or urinal. Whats it going to be?

[Joshuatree]

I looked thru couple of times ; will have one more look;thanks MM.I was initially quite interested when they talked about Autoclave etc but i think that technology may have made it redundant already. Maybe focusing back on their core strengths ; stainless steel work for milk powder factories etc. My int is flagging somewhat atp.

[minimoke]

I looked thru couple of times ; will have one more look. Go to page 18. It has the remunerations bands of earnings over $100k. On that page and the one prior you have the senior managers - simply put a number against each name and I reckon you'll have the earnings for those folks without too much trouble.

[winner69]

Stupid customers in not buying those flash slicers

EBITDA guidance $600k to $800k so lets say $600

Half Year EBITDA of $700k resulted in small loss

Heck FY $600,00 will lead to npat of about $700k to $800k

Bank let them off the hook this time ....but will be under the thumb big time

Still fancy them Percy

[Joshuatree]

Percy fancying a Bacon Slicer!!. Not being very kosher w60:p

[percy]

Excuse my memory playing up,but here is a case of history repeating itself.!!
South Canterbury Finance controlled by Southury Corp, owned by Alan Hubbard and Humphrey Rolleston lent Mercer so much money which Mercers coud not repay, issued more shares to Hubbard and Rolleston.Hubbard went bellie up and Rolleston took control with Murray & Co his partly owned merchant bank.
And today what a surprise;
New hotshot Mercers, the Slicer people,seem happy to get rid of a [gunna] CEO [I am gunna do this I am gunna do that]and replace him will a board member, who is also a Murray & Co person,yet the departing CEO stays on the board,and Tobin [who can't return phone calls] does not leave as promised,but appears to have been promoted.!!??
Is this the backroom work of Milford Asset? management???? or is it some company taking the piss??
All the time this disaster has been unfolding, people in the stainless steel frabricating sector, have been going gangbusters, supplying their wares to the wine industry and the milk production sector.

[percy]

PPS.
I go on about companies who keep their word, and achieve what they say they will do.
Usually they speak in clear English,and their plans are not that clever.Just simple objectives.
They also employ people who have mastered the telephone,and know the importance of returning calls.
MGL could never have been seen as one of these companies.

[Beagle]

I blew the whistle on this company last year and explained from the first hand experience of my mate who worked there that is his opinion the company was very poorly managed. Anyone who wasn't able to join the dots from that inside scoop should ask themselves why they ignored this.
Good companies deliver results...on the other hand...

[Joshuatree]

Cheers guys. i was hoping for some quality new management to sweep out all corners.Never the less will stick to my 6 months(october) decision before deciding what to do with my tiddler packet of shares. Certainly agree re avoid atp.

[percy]

Cheers guys. i was hoping for some quality new management to sweep out all corners.Never the less will stick to my 6 months(october) decision before deciding what to do with my tiddler packet of shares. Certainly agree re avoid atp.

Joshuatree.
Google; Murray & Co Christchurch,then our people,then read about Richard Rookes.
Clever man.
If at long last there is someone who can sort out this mess of a company,he looks to be that person..

[whatsup]

Excuse my memory playing up,but here is a case of history repeating itself.!!
South Canterbury Finance controlled by Southury Corp, owned by Alan Hubbard and Humphrey Rolleston lent Mercer so much money which Mercers coud not repay, issued more shares to Hubbard and Rolleston.Hubbard went bellie up and Rolleston took control with Murray & Co his partly owned merchant bank.
And today what a surprise;
New hotshot Mercers, the Slicer people,seem happy to get rid of a [gunna] CEO [I am gunna do this I am gunna do that]and replace him will a board member, who is also a Murray & Co person,yet the departing CEO stays on the board,and Tobin [who can't return phone calls] does not leave as promised,but appears to have been promoted.!!??
Is this the backroom work of Milford Asset? management???? or is it some company taking the piss??
All the time this disaster has been unfolding, people in the stainless steel frabricating sector, have been going gangbusters, supplying their wares to the wine industry and the milk production sector.

Has anyone any ideas as to why the company have missed out on the S S fabricating sector what with the dairy, restaurant, fast food and hospital industries , I would have thought that a company with as long a history as Mercers have would have kept their commercial advantage re manufacturing, surely they cannot be that incompantant that they have let that slip between their fingers.

[percy]

Has anyone any ideas as to why the company have missed out on the S S fabricating sector what with the dairy, restaurant, fast food and hospital industries , I would have thought that a company with as long a history as Mercers have would have kept their commercial advantage re manufacturing, surely they cannot be that incompantant that they have let that slip between their fingers.

When management have the world to conquer with their S-Clave Slicer,and new state of the art medical sterilization units,why waste their time with profitable local work??? [Note Tobin is too busy to return phone calls].
Plus, I think local more nimble businesses with lower overheads have been able to under cut them.I think they did do the huge big drier at the new Darfield Milk factory for Fonterra.
Incompetence.!? Well history does appear to be on their side.

[whatsup]

When management have the world to conquer with their S-Clave Slicer,and new state of the art medical sterilization units,why waste their time with profitable local work??? [Note Tobin is too busy to return phone calls].
Plus, I think local more nimble businesses with lower overheads have been able to under cut them.I think they did do the huge big drier at the new Darfield Milk factory for Fonterra.
Incompetence.!? Well history does appear to be on their side.

So why forgo good cash flow business for a some new flash in the pan type, as a aside how much do these bacon slicers sell for and how big are they ?

[Joshuatree]

what sup ;suggest you read all the threads and then do some research and let us know what you find ;if still motivated to do so.Your share trader community would appreciate it.

[percy]

So why forgo good cash flow business for a some new flash in the pan type, as a aside how much do these bacon slicers sell for and how big are they ?

I think the board may have been be asking the same question.
From memory approx. $800,000.
Go to NZX and enter MGL and announcements and read their annual report and presentations.[I can't bring myself to.]
Bit too big to fit on the kitchen bench.! lol.

[winner69]

I think the board may have been be asking the same question.
From memory approx. $800,000.
Go to NZX and enter MGL and announcements and read their annual report and presentations.[I can't bring myself to.]
Bit too big to fit on the kitchen bench.! lol.

I thought $700k to $800k as well

Big monsters ....don't get your arm caught in it

http://www.titanslicer.co.nz/product/titan-500-slicer

[whatsup]

I think the board may have been be asking the same question.
From memory approx. $800,000.
Go to NZX and enter MGL and announcements and read their annual report and presentations.[I can't bring myself to.]
Bit too big to fit on the kitchen bench.! lol.

Done all that and went back to the issue in 2010 @ .05 so imo there could be another one if this trend keeps up

[percy]

Done all that and went back to the issue in 2010 @ .05 so imo there could be another one if this trend keeps up

Only one every five years.?
They have a long way to go to catch up with WDT...
Easy to joke when not holding.

[Lola]

Excuse my memory playing up,but here is a case of history repeating itself.!!
South Canterbury Finance controlled by Southury Corp, owned by Alan Hubbard and Humphrey Rolleston lent Mercer so much money which Mercers coud not repay, issued more shares to Hubbard and Rolleston.Hubbard went bellie up and Rolleston took control with Murray & Co his partly owned merchant bank.
And today what a surprise;
New hotshot Mercers, the Slicer people,seem happy to get rid of a [gunna] CEO [I am gunna do this I am gunna do that]and replace him will a board member, who is also a Murray & Co person,yet the departing CEO stays on the board,and Tobin [who can't return phone calls] does not leave as promised,but appears to have been promoted.!!??
Is this the backroom work of Milford Asset? management???? or is it some company taking the piss??
All the time this disaster has been unfolding, people in the stainless steel frabricating sector, have been going gangbusters, supplying their wares to the wine industry and the milk production sector.
Little hope for this outfit . Some say
Could be Sins of the Forefathers.?

[Joshuatree]

Joshuatree.
Google; Murray & Co Christchurch,then our people,then read about Richard Rookes.
Clever man.
If at long last there is someone who can sort out this mess of a company,he looks to be that person..Richard Rookes Director, Investment Banking

Cheers ;he does sound good ;at investing anyway. If he can turn his skills to making MGL profitable ,grrreat.


Richard joined Murray & Co in 2005 and has managed the firm’s equity and financing activities since 2009. This comprises managing the Rakaia Fund’s various investments, arranging mezzanine funding for other borrowers and sitting on the boards of investee companies. Before joining Murray & Co, Richard worked for two global investment banks in London where he gained experience in both the equity and credit divisions, providing him with a detailed understanding of value drivers, capital structuring and business fundamentals. Richard holds a Bachelor of Commerce from the University of Otago, a Diploma for Graduates (Marketing) and a Postgraduate Diploma in Commerce. Richard is a member of the NZ Institute of Directors. Richard is also a member of the Advisory Committee of St Georges Hospital Society.

[percy]

OMG.
Just when you thought things could not get any worst,they just did.!!

[Lizard]

Perfect. Big write-downs and focus on the technology businesses, along with the core fabrication. Seems to me this is exactly what needed to happen. Come back in 9 - 18 months time. Assuming it is still here, we might have something worth investing in for the turnaround - and at the right price... :)

[Joshuatree]

They paid so little or nothing for their shares whatever they get will be cream at shareholders expense.
So many companies get turned around with the right management.
This is a good thing. Keeping my tiny position.
Bring on the new BROOM.!

NBAW ​new broom at work

[whatsup]

Is this the end story being played out now ?

[Joshuatree]

whatsup?. here i will make sense for you
Mercer Group Limited - Half Year Prelim Result ... (https://www.nzx.com/companies/MGL/announcements/278523)

[Joshuatree]

Looks like they are doing everything they can to survive,...... reducing cost base and focusing on just two products;..... and come out another side. good luck to them inheriting this basket case.

[whatsup]

whatsup?. here i will make sense for you
Mercer Group Limited - Half Year Prelim Result ... (https://www.nzx.com/companies/MGL/announcements/278523)

read it all but not looking good (reading between the lines is it )

[winner69]

read it all but not looking good (reading between the lines is it )

Think it said exciting times ahead when the stars align

[percy]

Is there a limit to the number of times a company can "be born again"..?

[whatsup]

Is there a limit to the number of times a company can "be born again"..?

ask wellington drive and smartpay ?

[winner69]

They will come right one day

Rights issue at 1 cent - suppose can't go much lower for decency sake

https://www.nzx.com/files/attachments/242426.pdf

[whatsup]

read it all but not looking good (reading between the lines is it )

Another year and ditto !!

[whatsup]

OMG.
Just when you thought things could not get any worst,they just did.!!

After reading yesterdays cap raising preamble I find it very hard to understand how Mercers can survive even with the rights issue being a success.

[Ghost Monkey]

Isn't Mr. Rolleston a bit of a smart cookie? He still seems to be keeping this boat from sinking.........

Incidentally, the company I work at just did a smallish job for Mercer's last month. Will be interesting to see if they pay us on time. Past performance doesn't fill me with hope.

[whatsup]

Did anyone attend the AGM yesterday ?

[ShouldHaveHeld]

Isn't Mr. Rolleston a bit of a smart cookie? He still seems to be keeping this boat from sinking.........

Incidentally, the company I work at just did a smallish job for Mercer's last month. Will be interesting to see if they pay us on time. Past performance doesn't fill me with hope.

haha, this happened with us also. Jobs were done and payments were always late

[whatsup]

I heard on R NZ national radio this morning prior to 7.00am that more milk silos supposedly made by Mercers have been discovered to have welding cracks in them.
I would have thought considering the state that the company is in at present that this would have been announced to the market in general;.

[Hectorplains]

I heard on R NZ national radio this morning prior to 7.00am that more milk silos supposedly made by Mercers have been discovered to have welding cracks in them.
I would have thought considering the state that the company is in at present that this would have been announced to the market in general;.

Yikes...http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11737155
Up to $45m... game over?

[percy]

Nett loss $7 mil,up from last year's $6.5 mil.
No surprises there from this serial underperformer.

[Beagle]

Yeap, real "top" performer this one. Directors commentary about being satisfied with how they're tracking makes for good comedy for anyone who appreciates the irony and nuances of reading corporate "creative speak"

[percy]

Yeap, real "top" performer this one. Directors commentary about being satisfied with how they're tracking makes for good comedy for anyone who appreciates the irony and nuances of reading corporate "creative speak"

I loved it,but then I am not a shareholder.!!!.lol.

[Sideshow Bob]

https://www.nzx.com/announcements/314324

Key points for the six months ending 31 December 2017:
• Total Group sales revenue of $16.4m, an increase of 107% vs prior comparative period (pcp).
• The Group achieved an EBITDA¹ profit of $96k vs pcp loss of $1.48m.
• The Stainless business performed strongly with sales revenue of $10.6m and EBITDA of $1.04m, a 35% and 254% improvement on the pcp respectively.
• Haden & Custance sales momentum has been slower than previously projected, reporting $6.3m of revenue for the six months and generating an EBITDA loss of $618k.
• The Group After Tax loss was $0.37m loss vs pcp $2.6m loss.
• During the period, the Group raised $2.9m in two placements


Not dead yet....

Disc: Not a holder

[black knat]

I picked this one in the comp as a turnaround story.... Market Cap a paltry $15m. Half year update looks reasonable....

Highlights of the six month period to 31 December 2019 included:
1. 55% increase in Group revenue to $27.9m
2. Automation revenue was 76% of Group revenue, in line
with the stated strategy to grow that side of the business
3. EBITDA increased 82% to $1.1m
4. Net Profit increased 176% to $447k
5. Net Debt reduced to $2.2m due to the strong cash position
6. Appointment of new Chair Trevor Burt

[winner69]

I picked this one in the comp as a turnaround story.... Market Cap a paltry $15m. Half year update looks reasonable....

Highlights of the six month period to 31 December 2019 included:
1. 55% increase in Group revenue to $27.9m
2. Automation revenue was 76% of Group revenue, in line
with the stated strategy to grow that side of the business
3. EBITDA increased 82% to $1.1m
4. Net Profit increased 176% to $447k
5. Net Debt reduced to $2.2m due to the strong cash position
6. Appointment of new Chair Trevor Burt

Don't just pick it in a comp ... show commitment and take a decent stake

You never know -- Mercer might be great again

Should sound percy out on what he thinks

[black knat]

It's very illiquid... hard to get a meaningful stake.

[Cadalac123]

Solid . Been eyeing this for months took a stake but was trying to see if it would bottom out at 0.18 again... steel segment is a drag on the business but the automation component is growing significantly.. then you realise its mostly inflated by milmeq

[percy]

Don't just pick it in a comp ... show commitment and take a decent stake

You never know -- Mercer might be great again

Should sound percy out on what he thinks
MGL.Mercer Group Ltd.64,520,706 shares on issue.Market cap at 25 cents is $16,130,177.
Good to see them making a profit.Has it taken 20 years or longer.?
After tax profit of $ 447,000 on turnover of $27,864,000 is very slim margins/pickings.
76% of revenue is now coming from recent acquisitions H&C and Milmeg.
Positive was the strong cash flow of $2.6 mil and the big reduction of debt down to $2.2 mil.
Fabrication still has issues.
So current 6 months profit is $.447 mil.Say they managed to get it up to $1mil for the year, the PE ratio would be 16.1.
Now I am not going to pay that for this type of business, in the sector they are in.
Also remember they are not paying a divie,and if/when they do, it will not be imputated.
This wonderful "window of opportunity" I will leave for others....lol.

[whatsup]

IMO MGL is controlled by the CH-CH mafia , be aware.

[black knat]

MGL.Mercer Group Ltd.64,520,706 shares on issue.Market cap at 25 cents is $16,130,177.
Good to see them making a profit.Has it taken 20 years or longer.?
After tax profit of $ 447,000 on turnover of $27,864,000 is very slim margins/pickings.
76% of revenue is now coming from recent acquisitions H&C and Milmeg.
Positive was the strong cash flow of $2.6 mil and the big reduction of debt down to $2.2 mil.
Fabrication still has issues.
So current 6 months profit is $.447 mil.Say they managed to get it up to $1mil for the year, the PE ratio would be 16.1.
Now I am not going to pay that for this type of business, in the sector they are in.
Also remember they are not paying a divie,and if/when they do, it will not be imputated.
This wonderful "window of opportunity" I will leave for others....lol.

No question at a margin for around 1.5% is slim as things stand. Question of whether they can grow revenue without adding further to overhead.

[whatsup]

No question at a margin for around 1.5% is slim as things stand. Question of whether they can grow revenue without adding futire to overhead.

Where exactly will the " growth " come from, what is their core reoccurring business ?

[black knat]

Where exactly will the " growth " come from, what is their core reoccurring business ?

I can't answer that. At a high level they are converting the company from the traditional stainless steel fabrication to focus on automated processing and packaging systems... seems to have been a positive move thus far.

[percy]

No question at a margin for around 1.5% is slim as things stand. Question of whether they can grow revenue without adding future to overhead.

Yes the correct question to ask.
As the acquisitions make up 76% of the revenue, and this is the first time they have shown up in the accounts it impossible for me to guess.
Also with fabrication going backwards we do not know the margins for the different sectors.
I think I will have to wait for the full year's result, before I can make an informed judgement.
Possibly if we see insiders buying we will be able to make a better guess.

[nztx]

An interesting Shareholder change -

https://www.nzx.com/announcements/349455


Asset Management Limited has today advised that it has unconditionally sold 13 million Ordinary Shares in Mercer Group Limited (MGL) to interests associated with Colin Neal. This means on settlement of this transaction Mr Neal’s interest will be 19.81% of the Ordinary Shares on issue. Colin Neil recently sold his interest in Big Chill distribution business to Freightways Limited.

The relevant statutory notices of Substantial Holdings will be made on the settlement expected within two weeks from this announcement.

Asset Management Limited a remains the company’s largest single shareholder owning 22.5% of the company.

[janner]

" Possibly if we see insiders buying we will be able to make a better guess. ".

In view of this... Comments percy ?..

[percy]

" Possibly if we see insiders buying we will be able to make a better guess. ".

In view of this... Comments percy ?..


I think if I were not sitting on the sidelines at present,I would be having a bit of a good look at Mercer.
No price mentioned as yet .
My guess is it is very interesting..lol

[janner]

Of course... Softee Softee…



Disc. Not a holder.

[percy]

For sale 1470 at 24.5 cents,then 108,332 at 25 cents.
Not many wanted by buyers,and only 628 traded today at 24.5 cents.
I would have thought there would have been more interest.

[whatsup]

Been a S Her in and out over the years, but with the Ch-Ch "inc imho " in control, one
would want to know what the weeze is before climbing onboard ( again ) . ps looks like their silo issues are getting sorted finally !

[whatsup]

MGL @ 18 month high circa .30 obviously punters are following the new appointment to the top table, has doubled in the last couple of months, interesting one to watch .

[nztx]

I think H&C including the acquired businesses shot into the H&C division are probably looking quite good and the saviour
for MGL & it's forward growth and prospects, but offshore travel restrictions are probably the problem

The new shareholder they saw in recently is also a new larger holder in MOA (& is taking up MOA rights & rights not taken up
by other holders) - from reading announcements

[black knat]

MGL will be changing its name to MHM Automation Limited, and ticker code to MHM.

Turnaround story on track.

Up 45% in the last two days - pleased I bought some of these some months back.

[percy]

MGL will be changing its name to MHM Automation Limited, and ticker code to MHM.

Turnaround story on track.

Up 45% in the last two days - pleased I bought some of these some months back.

Savvy buying.

[whatsup]

Savvy buying.

Wouldn't be pushing this one too high from here based on its history ( 30 odd years of what ? ) best buying was in March-April imo when I noted this board of moves afoot !

[black knat]

Wouldn't be pushing this one too high from here based on its history ( 30 odd years of what ? ) best buying was in March-April imo when I noted this board of moves afoot !

Good reason to be cautious on that basis. However the company has undergone a reasonably dramatic refocus which is bearing fruit with 80% of sales now coming from the automation division. Even at .35c market cap is still only $22m. From yesterdays full year...

o Revenue of $51.6m, an increase of 35% over the prior year
o Automation 81% of group sales revenue vs 61% for the prior year
o Automation revenue increased 79%
o EBITDA $2.4m a 199% increase on the prior year's EBITDA of $0.8m
o After tax profit was $0.9m, an increase of $1.9m on the prior year.

[whatsup]

Good reason to be cautious on that basis. However the company has undergone a reasonably dramatic refocus which is bearing fruit with 80% of sales now coming from the automation division. Even at .35c market cap is still only $22m. From yesterdays full year...

o Revenue of $51.6m, an increase of 35% over the prior year
o Automation 81% of group sales revenue vs 61% for the prior year
o Automation revenue increased 79%
o EBITDA $2.4m a 199% increase on the prior year's EBITDA of $0.8m
o After tax profit was $0.9m, an increase of $1.9m on the prior year.

IMO they are trying to mussel in to markets where there are established suppliers who have business relationships for decades, whats their point of difference-- a one stop shop-- not good enough to my liking.

[black knat]

IMO they are trying to mussel in to markets where there are established suppliers who have business relationships for decades, whats their point of difference-- a one stop shop-- not good enough to my liking.

You may be right whatsup, but it's a good sign when the chairman is buying on market post the full year.

Finished up 19% for the day. Happy.

[bung5]

With the change of focus I'm very bullish on this "new company" . Hopefully will see the EBITDA growing in the 100%+ range over next few years as margins improve

[nztx]

Wouldn't be pushing this one too high from here based on its history ( 30 odd years of what ? ) best buying was in March-April imo when I noted this board of moves afoot !


Haha .. yes fair call too

Traders & Investors riding the bumps & highs could have done very well with good timed moves here

[nztx]

With the change of focus I'm very bullish on this "new company" . Hopefully will see the EBITDA growing in the 100%+ range over next few years as margins improve


Some of businesses acquired are very very cyclical though

Bear in mind they are operating also in markets overseas where travel is not possible to, so reliant on teams on the ground there already

Interesting the Milmeq acquisition - low cost - high volume - low margin

The balance sheet shows signs of forward projects heavily funded upfront by customers - see the contract liabilities
This has become more apparent over recent years

H&C - a $1-2 mill acquisition seems to be fuelling much of T/o & growth, but beware that operation is cyclical and has it's good & bad years, and has been known to be very quiet as well -- factor in that the operation being major money spinner for MHM - Travel limitations under Covid-19 & what does that mean ?

The Dairy an other companies don't do major Capital jobs every year.. What will any form of local or global downturn do for MHM Order Books ? The Milmeq acquisition allowed entry into Freezing Co's - but there too they are surrounded by other suppliers .. whether the bits they acquired as a further 'Bolt- On' was unwanted by others in the Sector - who knows, but it was certainly not expensive to add to the MGl stable. ($50K + whatever else ?)


Some may buy on reimaged Company name - but the former business units are not all that exciting & risk exists with newer ones that produce margin (now anchored on average around 35% ave GP - but that has been higher previously)

Trying to make the current bundle of past few years acquisitions & bolt-ons even look remotely sexy now with the same old (roughly $1 mil or less Surplus) without doing further to actually make things a bit more sexy than an Automation Machine Maker & Freezing Works Servicing Outfit - seems tough ask .. what has really changed ? (aside from rebranding & rekitting at a large cost)


I don't fancy chances of a dividend any time soon from MHM & furthermore the kind of miraculous large turn around spin from the Board seems just that - Spin and nothing more .. put a $5 - $10 mil profit on the table - I'd think differently, but I don't see that happening anytime soon from MHM with sub $5 mill net shareholder funds, in the businesses & sectors they are in, in current times & suspect possibly limited future growth possibilities..

Past history suggests over the long & chequered history only in very few years has a dividend been paid - starting way back in days of the listed Broadway Industries from memory.

In recent years, major shareholder loans in have been capitalised into addition shareholding stakes, with Loss of most previously accumulated tax losses, there are few if any Imputation credits, and like some other listed companies - MGL has been no different in using borrowed funds for larger new acquisitions in earlier attempted reincarnations / reimaging, only to have to have these not turn out well , then reformulated into additional shareholder injection / debt-share swaps or variants of this sort of thing.. (as was seen with STU)

At the end of the day given the choice of either MHM (MGL) or STU, I know which I would probably lean towards, if forced to choose..


Discl: Holder MGL & STU

[winner69]

Was the shareprice over 7 bucks once ... and more recently over 4 bucks

[bung5]

Good insight






there are few if any Imputation credit


What do you mean by this. Surely if they were to pay a dividend , it would be from profits which they would be paying tax on so would be fully imputed dividend.
In any case would prefer no dividend payed and focus on growth.

[nztx]

Was the shareprice over 7 bucks once ... and more recently over 4 bucks

I been around a fair while & dont recall that .. at all

dont forget there was a share consolidation & large trove of shares cancelled too if memory serves correct!

Add: Yes between 2016 & 2017 years:

2016 Year end 330.4 Mil Shares
2017 Year end 41.038 Mil Shares

[nztx]

Good insight





What do you mean by this. Surely if they were to pay a dividend , it would be from profits which they would be paying tax on so would be fully imputed dividend.
In any case would prefer no dividend payed and focus on growth.

Good point yes .. but fairly good call that they would retain earnings

Accumulated P&L shows a fairly hefty trove of past red ink

[winner69]

Mercer aint paid dividend for decades

Doubt if they ever will

[nztx]

+3c to 41c so far today .. does someone know something ?

I remember last year when they were between 18 & 20c

[nztx]

A bit of History -

From the 2001 Prospectus of Broadway Industries (which was the former name)

Dividend Policy:

The Company has not paid a dividend since 9 December 1996
Directors presently do not expect to recommence the payment of dividends until the Balance Sheet is sufficiently strengthened

At that time the trading subsidiaries were Mercer Stainless & H E Perry

On 2 March 2001, the Directors announced a profit for the six months ended 31 December 2000 of $304,000 ....

The Directors expect that the result for the current financial year end 30 June 2001 will be a net surplus within the range
of $600,000 to $800,000 ...


Moving forward - looking at the 11 FY periods to 30 June 2019 -
the following are from extract summaries of Annual Financial Statements crunched

Comprehensive Income (Loss) , or bottom line reported -

2009 ($1595 K)
2010 ($3367 K)
2011 ($9123 K)
2012 ($1008 K)
2013 $ 631 K Surplus
2014 $ 193 K Surplus
2015 ($7025 K)
2016 ($6373 K)
2017 ($6975 K)
2018 ($7910 K)
2019 ($1029 K)

A grand total of Net Losses of ($43.581) million reported over 11 Years

Included across these years

Restructuring Costs $5348 K
Impairment Charges $6363 K
Deficit - Discontinued Operations $9008 K
Fonterra Settlement $1111 K

Asset Revaluation movement ($1923 K) Surplus
Insurance Proceeds ($2608 K) Surplus


Net Shareholders Funds total movements reported over 11 years period from 2009 - 2019 were


Share Capital +24929 K
Other Reserves + 1071 K
Retained Earnings (- 42948 K)

Net Movement (-$ 16948 K)

Shareholders Funds YE 2009 $20.363 Million
Shareholders Funds YE 2019 $ 3.415 Million

Net Movement (-$ 16948 K)

Shareholders Funds at YE 2009 comprised:

Share Capital $19.437 million
Other Reserves $1.934 million
Retained Earnings ($1.008) million

Total 2009 YE SH Funds $20.363 million


Gross Profit Margins in Reported Statements -

2009-2016 periods - 2012 49%, the rest in Low to mid 50% range
2017 period circa 44%
2018 - 2019 periods - 35.5% & 38.8% respectively

Turnover range across 11 years $30 Million - 40 million pa


This suggests the extent to which New & Existing Shareholders Funds & Value have been lost / destroyed
over the 2009-2019 FY periods, as reported.

Most recent strategies & acquisitions may be different and be far more successful and profitable forays, which 2020
reporting suggests may be possible / occurring

A fair amount of new capital appears to have been injected from current & former major shareholder(s) and across
recent years refinanced bank borrowing perhaps connected to acquisitions or closed divisions which have not fared well


2016-17 1:20 Share Consolidation:

https://www.nzx.com/announcements/294403

5/12/2016, 1:21 pm CAPREC
SHARE CONSOLIDATION OF 1 SHARE PER 20 SHARES CURRENTLY ON ISSUE

The Company has resolved to implement a share consolidation in order to rationalise the number of ordinary shares of the Company on issue.

Every 20 shares held in Mercer Group Limited on 9 January 2017 will be consolidated into 1 share, with all fractional entitlements rounded to the nearest whole number of shares (and a fractional entitlement to half a share being rounded up). As a result of the consolidation, the number of shares on issue in Mercer will be reduced from 1,151,903,950 to approximately 57,595,198 shares.
The expected timetable for the share consolidation is as follows:
• 4 January 2017 – Last day for trading in pre-consolidation shares on the NZX Main Board.
• 5 January 2017 - Ex-date for the consolidation. Mercer's shares are expected to enter a two day trading halt from this date.
• 6 January 2017 – Record date for the consolidation.

[winner69]

nztx ....just as well all that incredible degree of wealth destruction over the years is behind them and the turn around story underway has real momentum and the future is looking really bright

Percy probably got some good stories to tell about Mercer .....but maybe, just maybe, he’s interested now, if so a great investment.

[winner69]

At least they recovering from the dud silo they built. That disaster could have been terminal

https://www.stuff.co.nz/business/85837724/edendale-silo-collapse-cost-hits-45m

[nztx]

The Silo disaster was where the settlement was to be 'worked off' forwards if memory serves correct

H&C / Automation & MilmeQ offshore Freezing Works Support operations will all to a degree be affected
by current Covid-19 travel restrictions, maybe sometime into the future

They have some good bones of businesses acquired there, if volatile but still continue with other legacy
divisions which still have to demonstrate their ability to fly a fair while & much playing (developing) later..

Lets hope that someone doesn't get wild ideas about borrowing up large to add a new division or two
as bolt on's at a hefty cost -- to thus risk repeat of past destructive cycles evident in MGL's past
when add-ons don't work out or fall apart further down the track..

[whatsup]

nztx ....just as well all that incredible degree of wealth destruction over the years is behind them and the turn around story underway has real momentum and the future is looking really bright

Percy probably got some good stories to tell about Mercer .....but maybe, just maybe, he’s interested now, if so a great investment.


W69 wouldn't put a dollar on that happening, IMO Mr Neal really can pick very long odds companies .

[percy]

nztx ....just as well all that incredible degree of wealth destruction over the years is behind them and the turn around story underway has real momentum and the future is looking really bright

Percy probably got some good stories to tell about Mercer .....but maybe, just maybe, he’s interested now, if so a great investment.

Yes,but luckily I have forgotten most of them.!.
So automation "Across these business, MHM Automation provides automated solutions to the global dairy, cheese and protein sectors, packaging technologies, large scale chilling and freezing systems and stainless steel fabrication services."
Sounds great.
Yet PAZ have installed their second huge freeze drier.The first one is the largest in Australasia.Designed by PAZ, and manufactured in China.Most of PAZ's equipment comes from China.
Why?.Because it costs about a quarter to a third of the cost of NZ supplied equipment.

[Snoopy]

Some of businesses acquired are very very cyclical though

Bear in mind they are operating also in markets overseas where travel is not possible to, so reliant on teams on the ground there already

Interesting the Milmeq acquisition - low cost - high volume - low margin


A bit more on Milmeq. It was a privately owned company, part of the Amalgamated Dairy stable, which is the business arm of the rich lister Goodfellow family. It went into receivership in 2018, although it is probably more correct to say it was allowed to go into receivership. There seems little doubt that the Goodfellows could have saved the company is they had chosen to do so.

From the ODT article at the time

https://www.odt.co.nz/news/dunedin/dunedin-plant-closure-cost-40-jobs

-----

Milmeq custom-designs, engineers and manufactures systems for primary food processing, materials handling, chilling and freezing within the protein industry.

Mr Marshall (board chairman) said ''world markets have been challenging'' for the past 12 to 18 months with inter-company consolidations, Australia's drought and the uncertainty surrounding the US-China trade tariff war.

''Companies are just not making reinvestment decisions at the moment.''

-----

I visited Millmeq while visiting Dunedin for the Scott Technology AGM around ten years ago. At that stage Millmeq was doing a lot in the meat processing industry and things were quite buoyant with the two companies seemingly not wanting to tread directly on each others toes.

The story at receivership time talks about the company remnants being split between Wiley and Co,. an Australian project delivery company. From https://www.wiley.com.au/about-us/

"Wiley completed its acquisition of the primary food processing design and engineering consultancy team from Milmeq, New Zealand. The acquisition sees the further establishment of Wiley’s services in the country and their first permanent presence within New Zealand."

and Mercers. But there was a third company involved as well, with Scott Technology purchasing the "Milmeq Spares and Sundries Meat Slaughter Business." You would have to wonder why a potential competitor would take on the job of supporting a dead rival's product. My conclusion is that it must have been to get on good terms with Millmeq's former customers.

Superficially the terms of purchase of "Millmeq Chilling & Freezing" seem quite generous, to Mercer. A sale price of $50k, a $1m interest free working capital facility thrown in by the vendors, a $3.5m bank bond supported by the vendors up to 31-10-2020 in relation to an existing significant contract for the design and delivery of plate freezers to a leading Australian red meat supplier.

Yet within 10 months of purchase "Millmeq Chilling & Freezing" had secured $30m worth of orders! On the surface of it that $50,000 sale price looks too good to be true.



The balance sheet shows signs of forward projects heavily funded upfront by customers - see the contract liabilities
This has become more apparent over recent years


That seems very odd. Why would major customers pay up front before the work was completed? Could this customer financing instead be related to the bank bond supported by the Goodfellows which will expire at the end of October 2020?

SNOOPY

[nztx]

A bit more on Milmeq. It was a privately owned company, part of the Amalgamated Dairy stable, which is the business arm of the rich lister Goodfellow family. It went into receivership in 2018, although it is probably more correct to say it was allowed to go into receivership. There seems little doubt that the Goodfellows could have saved the company is they had chosen to do so.

From the ODT article at the time

https://www.odt.co.nz/news/dunedin/dunedin-plant-closure-cost-40-jobs

-----

Milmeq custom-designs, engineers and manufactures systems for primary food processing, materials handling, chilling and freezing within the protein industry.

Mr Marshall (board chairman) said ''world markets have been challenging'' for the past 12 to 18 months with inter-company consolidations, Australia's drought and the uncertainty surrounding the US-China trade tariff war.

''Companies are just not making reinvestment decisions at the moment.''

-----

I visited Millmeq while visiting Dunedin for the Scott Technology AGM around ten years ago. At that stage Millmeq was doing a lot in the meat processing industry and things were quite buoyant with the two companies seemingly not wanting to tread directly on each others toes.

The story at receivership time talks about the company remnants being split between Wiley and Co,. an Australian project delivery company. From https://www.wiley.com.au/about-us/

"Wiley completed its acquisition of the primary food processing design and engineering consultancy team from Milmeq, New Zealand. The acquisition sees the further establishment of Wiley’s services in the country and their first permanent presence within New Zealand."

and Mercers. But there was a third company involved as well, with Scott Technology purchasing the "Milmeq Spares and Sundries Meat Slaughter Business." You would have to wonder why a potential competitor would take on the job of supporting a dead rival's product. My conclusion is that it must have been to get on good terms with Millmeq's former customers.

Superficially the terms of purchase of "Millmeq Chilling & Freezing" seem quite generous, to Mercer. A sale price of $50k, a $1m interest free working capital facility thrown in by the vendors, a $3.5m bank bond supported by the vendors up to 31-10-2020 in relation to an existing significant contract for the design and delivery of plate freezers to a leading Australian red meat supplier.

Yet within 10 months of purchase "Millmeq Chilling & Freezing" had secured $30m worth of orders! On the surface of it that $50,000 sale price looks too good to be true.



That seems very odd. Why would major customers pay up front before the work was completed? Could this customer financing instead be related to the bank bond supported by the Goodfellows which will expire at the end of October 2020?

SNOOPY

An interesting Liability line - those Net Contract Liability lines

2020 YE:

Contract Assets $ 2.949 mil
Contract Liabilities $ 9.457 mil

Net Liability $ 6.508 mil

2019 YE:

Contract Assets $ 2.927 mil
Contract Liabilities $ 8.252 mil

Net Liability $ 5.325 mil

2018 YE:

Net Liability $ 1.781 mil

Also interesting are the number of period ends in past 12 years where Negative Working Capital shows

2020: ($ 5.258 mil)
2019: ($ 8.675 mil) - includes borrowings part looks rolled over / part
2018: ($ 1.150 mil)
2018: $ 1.237 mil Surplus
2017: ($ 3.126 mil) - includes borrowings part looks rolled over / part
2016: ($ 3.999 mil) - includes borrowings part looks rolled over / part

[Snoopy]

Snoopy wrote:
"Superficially the terms of purchase of "Millmeq Chilling & Freezing" seem quite generous, to Mercer. A sale price of $50k, a $1m interest free working capital facility thrown in by the vendors, a $3.5m bank bond supported by the vendors up to 31-10-2020 in relation to an existing significant contract for the design and delivery of plate freezers to a leading Australian red meat supplier.

An interesting Liability line - those Net Contract Liability lines

2020 YE:

Contract Assets $ 2.949 mil
Contract Liabilities $ 9.457 mil

Net Liability $ 6.508 mil

2019 YE:

Contract Assets $ 2.927 mil
Contract Liabilities $ 8.252 mil

Net Liability $ 5.325 mil

2018 YE:

Net Liability $ 1.781 mil


The jump in Contract Assets corresponds with the February 2019 acquisition of Milmeq, and is consistent with the vendor bond (which could be described as a 'Contract Asset' used to offset a 'Contract Liability') I have referenced above. Situation explained?

SNOOPY

[nztx]

The jump in Contract Assets corresponds with the February 2019 acquisition of Milmeq, and is consistent with the vendor bond (which could be described as a 'Contract Asset' used to offset a 'Contract Liability') I have referenced above. Situation explained?

SNOOPY

I don't know Snoopy -- the 2020 Annual Report makes reference to what went through P&L as well

As for the earlier period 2018 FY - H&C perhaps ?

It still suggests element of progress payments from Customers coming in IMO, but I may be wrong ..

but MGL Working Capital looks pretty thin so maybe that's the way with Contracts

[Snoopy]

I don't know Snoopy -- the 2020 Annual Report makes reference to what went through P&L as well

As for the earlier period 2018 FY - H&C perhaps ?

It still suggests element of progress payments from Customers coming in IMO, but I may be wrong ..

but MGL Working Capital looks pretty thin so maybe that's the way with Contracts


I own Scott Technology shares, and that company earns a lot of money from large contracts that can spill over from one financial year to the next. Here is what is written in SCT AR2019 about Contract Assets and Liabilities under note B3 p44.

"Contract Assets are balances due from customers under long term project contracts that arise when the group receives payment from customers in line with a number of performance related milestones. The group will previously have recognised a Contract Asset for any work performed. Any amount previously recognised as a Contract Asset is reclassified as a Trade Debtor at the point at which it is invoiced to the customer."

"Contract Liabilities relating to long term project contracts are balances due to customers under long term project contracts. These arise if a particular milestone payment exceeds the revenue recognised to date."

My reading of that is that if a progress payment comes in, then that payment extinguishes a trade debtor liability. So progress payments would not normally be found on the balances sheet - ever. The only exception to this is if a payment on a contract is made before the work is done. At that point such a payment becomes a Contract Liability which presumably is removed from the balance sheet once the work is carried out.

SNOOPY

[nztx]

I own Scott Technology shares, and that company earns a lot of money from large contracts that can spill over from one financial year to the next. Here is what is written in SCT AR2019 about Contract Assets and Liabilities under note B3 p44.

"Contract Assets are balances due from customers under long term project contracts that arise when the group receives payment from customers in line with a number of performance related milestones. The group will previously have recognised a Contract Asset for any work performed. Any amount previously recognised as a Contract Asset is reclassified as a Trade Debtor at the point at which it is invoiced to the customer."

"Contract Liabilities relating to long term project contracts are balances due to customers under long term project contracts. These arise if a particular milestone payment exceeds the revenue recognised to date."

My reading of that is that if a progress payment comes in, then that payment extinguishes a trade debtor liability. So progress payments would not normally be found on the balances sheet - ever. The only exception to this is if a payment on a contract is made before the work is done. At that point such a payment becomes a Contract Liability which presumably is removed from the balance sheet once the work is carried out.

SNOOPY

So on that prognosis Snoopy - would you guess either Deferred Income or a payable due to a Customer to be the case ?

[Snoopy]

I am having a little trouble following you nztx



I don't know Snoopy -- the 2020 Annual Report makes reference to what went through P&L as well


What reference are you talking about?



It still suggests element of progress payments from Customers coming in IMO, but I may be wrong ..


What are you referring to when you say 'It'?



So on that prognosis Snoopy - would you guess either Deferred Income or a payable due to a Customer to be the case?


.....to be the case .. where? What specifically are you referring to?

SNOOPY

[nztx]

I am having a little trouble following you nztx



What reference are you talking about?



What are you referring to when you say 'It'?



.....to be the case .. where? What specifically are you referring to?

SNOOPY


I'm rather curious at Note 7 - Page 49 of the 2020 Report:

7 Contract revenue movements

Revenue recognised included in contract liability at the
beginning of the period 2020 - (5,325) ; 2019 - 1,781

Construction contracts

Contract assets - 2020 - $2,949 ; 2019 $2,927
Contract liabilities - 2020 - $(9,457) 2019 - $(8,252)
Net contract liabilities - 2020 $(6,508) ; 2019 - $(5,325)

What do you make of these ?

- How does the Liability arise ?

- Doing a Contract for third parties - surely would produce an Asset, sooner or later receivable at some point
for such work from the third party

- A Liability - surely suggests an element of payment received in advance or maybe something else ?

[Ferg]

Construction accounting (simplistically) works like this:

Invoice (say deposit) to customer:
Debit Receivables (and is eventually paid)
Credit Contract WIP

Costs incurred on contract:
Debit Contract WIP
Credit Payables (and eventually paid)

Each contract is separately tracked. Those with a nett credit balance are classified as contract liabilities at year end, whilst those with a nett debit balance are classified as contract assets.

Profit is released to the P&L on large contracts according to percentage complete, debit Contract WIP, credit P&L.

So the nett credit balance shows good working capital management in that Receivables are ahead of Payables. And while a credit balance is like deferred income, very little will actually be profit (being the project Margin).

Edit: reading p33 of the AR I see nothing that contradicts the above. Think of contract debit balances as a prepayment. The risk with large projects is if you overstate the costs completed to date, then you get a higher % complete and can take a higher % into profit. I'm not saying that is happening (and I haven't checked) but one way of checking this is by looking at the average days in payables to see if there is any any monkey business and/or how many projects have a nett debit balance. The other thing to be wary of is projects with debit balances may be concealing a project loss - again I'm not suggesting that is the case, just providing some background info.

[Snoopy]

I'm rather curious at Note 7 - Page 49 of the 2020 Report:

7 Contract revenue movements

Revenue recognised included in contract liability at the
beginning of the period 2020 - (5,325) ; 2019 - 1,781

Construction contracts

Contract assets - 2020 - $2,949 ; 2019 $2,927
Contract liabilities - 2020 - $(9,457) 2019 - $(8,252)
Net contract liabilities - 2020 $(6,508) ; 2019 - $(5,325)

What do you make of these ?

- How does the Liability arise ?


If Mercers had to purchase something, a robot from a third party, and some steel to make a fabricated component, in order to do a job and those components were supplied on pay later terms then that purchase would be a 'Contract liability'.



- Doing a Contract for third parties - surely would produce an Asset, sooner or later receivable at some point
for such work from the third party


Yes it would be 'work in progress' (an asset) up until certain parts of the job were invoiced. At that point he work in progress the 'work in progress' inventory goes down and an 'account receivable' (another asset) is created.



- A Liability - surely suggests an element of payment received in advance or maybe something else ?


It could be a payment received in advance, although I have never heard of anyone commissioning a substantial build project then 'paying up front' for it. Or it could be buying assets from a third party required to complete the job. That's how I see things.

SNOOPY

[Ferg]

If Mercers had to purchase something, a robot from a third party, and some steel to make a fabricated component, in order to do a job and those components were supplied on pay later terms then that purchase would be a 'Contract liability'.

Not quite. See my post 222 above. Such purchases would end up as a contract WIP debit and a payable credit. Contract liabilities arise due to bills to customers running ahead of costs on those same projects.

Source: worked with construction accounting in a previous life.

[Sideshow Bob]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/360529/331727.pdf

"The Future Looks Different"

[nztx]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/360529/331727.pdf

"The Future Looks Different"

but same Dog different new spots now painted on

Has the PR spin changed or just more of the same ?

What's happened to make it run faster ? - Special Stainless Booths being manufactured for Covid 19 treatment ? ;-)

Has Mercer been inflicted with a 'Chilled Out" affect to make it look different ?

How's the "Chilled Out" effect going with Moa ?

[janner]

but same Dog different new spots now painted on

Has the PR spin changed or just more of the same ?

What's happened to make it run faster ? - Special Stainless Booths being manufactured for Covid 19 treatment ? ;-)

Has Mercer been inflicted with a 'Chilled Out" affect to make it look different ?

How's the "Chilled Out" effect going with Moa ?

I feel a little bitterness coming from your reply.
Personally have never invested into " Mercer " before. Also never invested in Moa.

However. A change of " Leadership and percentage ownership " is imho starting to indicate an upward movement.

Tell me I am wrong in 12 months time.. DYOR !.

[nztx]

I feel a little bitterness coming from your reply.
Personally have never invested into " Mercer " before. Also never invested in Moa.

However. A change of " Leadership and percentage ownership " is imho starting to indicate an upward movement.

Tell me I am wrong in 12 months time.. DYOR !.

No bitterness .. and a holder

but really .. a couple of not really all that expensive bolt on acquisitions added to the old chassis

the same management & board basically

a new minority shareholder & shift over of what 15 - 20 % of the shares

a shiny new name and a PR spin for feel good to try to automate more market love out there

but really - what has actually changed ?

how many times has the Mercer / Broadway box of bits & bolt-ons done this before over the past decades ?

Decades of bad luck or mix of that and something else ?

The past decade's track record alone suggests destruction of shareholder wealth, with a Cap raise and
share consolidation all thrown in .. large tax losses forfeited previously, dividends being rare and no imputation
credits accumulated.

What has been taunted as large Earnings increase doesn't appear in reality to be that at all

A 10x or 20x multiple of the last FY may well be required to see even a minimal dividend

Shareholders Funds appear to be minimal & net working capital scant, but presumably workable
in the circumstances

It's difficult to see why, on the back of the past track record, industry sector & most other factors unchanged,
the Market may be rating SP currently on the shine off the new name alone ;)

Has a new Earning Guidance been released suggesting 10 or 15 fold bottom line increase or are punters confusing Mercer with Marsden Marine MMH ? ;)

[janner]

No bitterness .. and a holder

but really .. a couple of not really all that expensive bolt on acquisitions added to the old chassis

the same management & board basically

a new minority shareholder & shift over of what 15 - 20 % of the shares

a shiny new name and a PR spin for feel good to try to automate more market love out there

but really - what has actually changed ?

how many times has the Mercer / Broadway box of bits & bolt-ons done this before over the past decades ?

Decades of bad luck or mix of that and something else ?

The past decade's track record alone suggests destruction of shareholder wealth, with a Cap raise and
share consolidation all thrown in .. large tax losses forfeited previously, dividends being rare and no imputation
credits accumulated.

What has been taunted as large Earnings increase doesn't appear in reality to be that at all

A 10x or 20x multiple of the last FY may well be required to see even a minimal dividend

Shareholders Funds appear to be minimal & net working capital scant, but presumably workable
in the circumstances

It's difficult to see why, on the back of the past track record, industry sector & most other factors unchanged,
the Market may be rating SP currently on the shine off the new name alone ;)

Has a new Earning Guidance been released suggesting 10 or 15 fold bottom line increase or are punters confusing Mercer with Marsden Marine MMH ? ;)


Hopefully MHM will produce the goods quicker quicker than MMH.

Only a little toe in at present.

With such a bad write up one must wonder why you are holding ;)

[nztx]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/364968/337339.pdf

MHM Automation update

Acquisition of Southern Cross Engineering

MHM Automation (MHM) is pleased to announce the acquisition of the Southern Cross Engineering
(SCE) business.

SCE is a Christchurch based diversified engineering firm, established in 1954. It designs, manufactures
and distributes a range of high quality equipment into the meat, dairy, timber and infrastructure
sectors.

More at link

"The acquisition is conditional, with the conditions expected to the satisfied on or before 18th
December. If confirmed, the acquisition is due to settle on 11th January 2021. The purchase price will
be calculated through an earn out over the next two years."


This is about as close as anyone gets to how is consideration to be paid / settled by MHM .. ;)

In the meantime up to today, the MHM SP has steadily risen up through mid 50's to 60c close today

[nztx]

Share price zoom zoom upwards from around 16c 11 months ago (March 2020) to lofty the 71c today

Sell a Building

Report Interim Dec 2020 results today:

https://www.nzx.com/announcements/367771

"Financial Performance

Sales Revenue (excluding wage subsidies) of $24.7m for the six months was down 4% on the prior period, mainly due to declining Stainless revenue following the closure of our New Plymouth stainless site. Travel restrictions due to COVID impacted certain Automation project deliveries and the subsequent timing of revenue recognition. Our Automation sales revenue was 85% of group sales for the period.

Operating EBITDA of $1.46m was an increase of 63% on the restated prior period of $896k. The table above shows the impact of the discontinued business. Automation EBITDA of $1.56m was 54% up on the prior period. We are continuing to drive improvement in margins of our automation projects. During the period the warranty provisioning for automation was increased by $347k, due to an increased number of completed projects which are now in a warranty period (typically 12 – 24 months).

The pre-tax profit of $565k was 3% up on the prior year. This includes $245k of cost relating to the closure of New Plymouth vs the comparative that included $260k for the Milmeq acquisition adjustment.

The after tax profit for all operations was $372k which was 17% down on the prior period, this included a $97k loss from the discontinued operation in the current period."


May even make a cool $1 million for FY who knows .. ;)

but wait a moment .. where dat profit/loss on New Plymouth building go ?

"The sale price of $3.95m was more than the $2.1m book value. The gain on sale will be reflected in our full year results for 30 June 2021."

Okay so + 2.8 cps (before tax etc) GAIN out of the Naki Sticks & Mortar sold off - for second half glossy
Report Sheet

Maybe need to sell another building next year to prop up things in 2022 .. ;)

Dividend still elusive - like hen's teeth

No much change in Position really .. or was there ? ;)

More Bicycle pump needed moving forwards to maintain the 70 score on the mediocre mediocre ? ;)

Maybe 2022 see more positive Loot on page from rebrand and basket of 'good businesses' cobbled
together .. among the collection of other dead, declining & raft of other net cost centres .. ;)

[percy]

It would appear three poor businesses do not make one good one.

[nztx]

The Automation wheels appear to be spinning furiously, but the Bottom Line
before one-offs appears to be decidedly stubborn & stuck refusing to move much.. ;)

Perhaps Colin "The Fix It Man" might be able to put his finger on something long awry and
bring in a new hatchet to fix a few wrongs & prune some wood from the canopy.. ? ;)

[percy]

The Automation wheels appear to be spinning furiously, but the Bottom Line
before one-offs appears to be decidedly stubborn & stuck refusing to move much.. ;)

Perhaps Colin "The Fix It Man" might be able to put his finger on something long awry and
bring in a new hatchet to fix a few wrongs & prune some wood from the canopy.. ? ;)

Jucy,Moa,Smiths,and MHM....Think Colin will need to do a lot of fixing.

[nztx]

Jucy,Moa,Smiths,and MHM....Think Colin will need to do a lot of fixing.


Indeed .. what a curious collection he appears to have on his plate .. ;)

[samansoft]

despite good financial result why this stock keep declining :scared:

[nztx]

New Thread Title needed here -

MHM Automation (MHM)


Special Div 1.50 cps no imputation announced today on favourable trading report

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/378727/354210.pdf

[whatsup]

Indeed .. what a curious collection he appears to have on his plate .. ;)

He's not the only one who has " bought " into dud companies over the last couple of years that have gone nowhere if not backwards !!

[Sideshow Bob]

He's not the only one who has " bought " into dud companies over the last couple of years that have gone nowhere if not backwards !!

He has at least got an earn out from the Big Chill sale to put a bit more in the piggybank - plus of course the Mercer divvy.

At least Mercer appears a little more positive, albeit pumped up by the one-off property sale

[nztx]

He has at least got an earn out from the Big Chill sale to put a bit more in the piggybank - plus of course the Mercer divvy.

At least Mercer appears a little more positive, albeit pumped up by the one-off property sale


probably the size of things too - next 12 months will show how well all the hope translates into bottom line ;)

this one has a vast trail of past wealth destruction, legacy losses & Cap raises etc with a non existent Imputation
bank for a while ahead .. most of any distributions are likely to have the IRD full 33% DWT deduction ticket attached

[whatsup]

probably the size of things too - next 12 months will show how well all the hope translates into bottom line ;)

this one has a vast trail of past wealth destruction, legacy losses & Cap raises etc with a non existent Imputation
bank for a while ahead .. most of any distributions are likely to have the IRD full 33% DWT deduction ticket attached

Believe it or not Mercers was one , if not the oldest company on the N Z stock exchange, listed I think over 100 years ago , and look at where it is now, imho the CH-Ch mafia has not done it justice !

[nztx]

Believe it or not Mercers was one , if not the oldest company on the N Z stock exchange, listed I think over 100 years ago , and look at where it is now, imho the CH-Ch mafia has not done it justice !


The buy into the stable of Hawkes Bay based Haden & Custance seems to be the golden crown in the reincarnation
strategy while other divisions have progressively fizzled / pailed to insignificance in scheme of things
some closed etc.

Not sure but think there has only been one earlier dividend around 20 years ago from memory. I recollect Broadway
Industries back then, they seem to have been in importing, distributing etc in the past, before more recent
Mercer industrial engineering / fabrication supply & then onwards to new name - MHM Automation

Still a hell of a lot of past carnage in the fold & as others have posted the gain on New Plymouth property sale
is what is being distributed in dividend on 22 Sep

It probably owes it's survival to ongoing life support of large Christchurch backer, even through Cap Raises,
BNZ support, with Share Consolidation in the past too. A lot of wealth destruction on that the past trail
from what I can see and a long road to reach the current point with more optimistic future being hinted at..

[Arthur]

Can the old dog learn a new trick? Debt gone, a full order book and the long dangled carrot of getting into the health sector. Automation is potentially a good place to be. There are probably synergies with Scott if the two talk to one another.

[Lizard]

Interesting presentation today. Realised I needed to update the ticker on this thread :). They've been busy since I last looked...

[Lizard]

The buy into the stable of Hawkes Bay based Haden & Custance seems to be the golden crown in the reincarnation
strategy while other divisions have progressively fizzled / pailed to insignificance in scheme of things
some closed etc.


Had a bit of spare time and decided to take a closer look since I hadn't really run the ruler over since 2017.

Looks to me like a well-managed transition into the automation space - a space which they seem to have broadened out into over the past 2 years. Both Haden & Custance and Milmeq have formed part of this. It doesn't look as they they overpaid for either acquisition from what I can see. S-Clave continues to disappoint, but Atherton's have been patient supporters, so I think it will eventually contribute, even if they've given up suggesting a timeframe for commercial revenues!

Either way, the plans in the AGM presentation to double revenues and increase EBITDA by 2.5 times over the next three and a half years appear achievable for them when compared with achievements over the past 3 years. They now appear to have a strong board and have achieved strong gains despite the limits placed on them by Covid. Forecasts for revenue and EBITDA in first half look like solid progress on targets.

Even moving to a similar price/sales ratio to SCT would see a gain of over 30% on current sp of 67cps, although SCT has the clear size advantage at this stage.

[nztx]

From my past analysis - a fair bit of past carnage with MHM, hopefully all behind now,
the last being the large Silo collapse.

As far as I can see Milmeq appear to volume turnover - on lighter margins
H&C better margins - but cyclical dependent on large project activity, to a degree cyclical.
Covid could put constraints on getting people from here in to some countries & therefore
ability to look at some new contracts.

Margins appear to have declined markedly over a number of years, but could be
due a mix of activities consolidated.

Largely depending on Project forward advances, that's fine while there is a pipeline of
future contracts, but when that dries up - could cause problems.

One large / medium Contract gone wrong or turned onerous could significantly dent things
as could a downturn in markets where Cap Projects are likely ;)


MHM appear to be small fry - perhaps needing to secure up Working Capital to higher levels
if they intend expanding contracts / revenues & EBITDA upwards.

Similar could be said for Shareholders funds, which looks light, perhaps due to extensive
stack of past red ink booked up over the past periods.

At present levels, personal impression is overpriced - but a Cap Raise may change thoughts
on this, depending on what the next few periods report ;)

IMO - JMTW

not a current holder - better fish to fry elsewhere :)

[nztx]

https://www.nzx.com/announcements/387446

H1 - 31 Dec 2021


Highlights of the six-months to 31 December 2021:

• Revenue growth of 19% to $29.5m
• EBITDA growth of 45% to $2.12m
• Net profit after tax $1.4m
• The successful completion of a number of large scale projects across Australia and USA despite Covid disruptions
• Continuation of sales momentum and strength of sales pipeline
• Strong performance from our fabrication business showing the benefits of our diversification strategy
• Payment of the $1m Special Dividend
• The successful implementation of our ERP project, which provides us a single platform across the group to drive operational improvement, cost efficiencies and more
seamless integration of acquisitions
• Completion of our head office refurbishment, allowing a $2.6m uplift on book value of the property


Can't have been special enough for an ORDINARY dividend


Obviously no further Real Estate available to sell for further Special Div's just yet :)


But Special Enough for a decent HO Refurb Job ;)


Will it be ready to SELL for another large surplus & to pay another Special Div in the next period ? :)



The increased revenue was driven by the Milmeq Chilling and Freezing business, particularly in the Australian red meat sector, which offset a slower period in our reverse packaging business, which has been impacted by Covid issues more than other areas

Milmeq business = Lower Margin ? :)



The after-tax profit of $1.4m was 279% up on the prior period. This includes the balance of the ERP project expense of $300k.


$1 compared to 10c the previous year is a fairly impressive % increase too ;)


Discl: Still not a holder again - too busy frying more impressive fish elsewhere :)

[Sideshow Bob]

More revenue but NPAT within previous guidance.

MHM Automation Limited (MHM) market update - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/395334)

[Sideshow Bob]

MHM Automation Results - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/397591)

MHM Automation are pleased to announce a 32% increase in revenue to $67.6m and growth in operating EBITDA to $4.76m for the financial year to 30 June 2022.

This is a continuation of our growth strategy centred around automation and diversification of products, markets and geographies into which we sell. The continued growth was a credit to our committed team across all business units, and the strength of our diversified product portfolio.

Highlights for the 12 months to 30 June 2022
• 32% revenue growth to $67.6 million
• 21% operating EBITDA growth to $4.76 million
• Strengthened balance sheet
• A special dividend of $1 million was paid to shareholders
• At year end, $53 million of forward work was contracted, a
record for MHM Automation
• A number of large projects successfully delivered in a challenging Covid dominated environment

[winner69]

Update today

We are therefore foresting revenue for the half year to 31 December 2022 at between $37m to $41m and EBITDA in the range of $4m to $4.3m.

This is a 30%+ increase in revenue and an 84%+ increase in EBITDA versus the prior year
period.

Seems Mr Rookes doesn't check the announcements before they are released - auto correct on or spell check not working .... but foresting might be a new environment initaitive