MPG - Metro Glass

[macduffy]

We'll have to wait for the Investment Statement to get a better idea but does anyone else think that this rash of IPO's is starting to sound like a faint warning bell?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11285704

[Balance]

Where's the growth?

A company in trouble, bought cheap by private equity, financially engineered now to sell into a strong market?

[nextbigthing]

Hopefully they've learnt from the Hirepool debacle and come up with a reasonable offering

[winner69]

The real winners were the owners who got $366m in 2006

Good blokes those guys .....laughed all the way to bank

Just shows you how stupid this years were .....PE paying inflated prices for anything with a cash flow.

[winner69]

Where's the growth?

A company in trouble, bought cheap by private equity, financially engineered now to sell into a strong market?

Revenue wise not much

They will tout that at proposed prices lower multiples Han the likes of FBU and STU

Must be a bargain then

[brucey09]

Revenue wise not much

They will tout that at proposed prices lower multiples Han the likes of FBU and STU

Must be a bargain then

Snrs.
No touch with as you say "barging pole". Yes?

[macduffy]

Gets a mention in today's Chalkie column.

http://www.stuff.co.nz/business/opinion-analysis/10220805/Serving-two-masters-a-recipe-for-conflict-soup

[winner69]

From what I know they must have grown big time in the last 2 to justify a $300m market cap

Also be looking at how much debt gets left behind in the company ($80m odd in last accounts)

Prospectus will be interesting - after the market they are in is booming big time .....Christchurch CBD is going to be full of spanking new buildings endowed with glass

[MAC]

A couple of months ago we broke an upstairs window, and as a frugal one does I duly measured it all up and popped down to smith and smith for a replacement pane. Didn’t even bother with a call out in Christchurch anticipating backlog.

Not really to my surprise I was told that their glaziers were all busy and that I would have to wait three days.

That’s three days for an across the counter sale, wish I had shares in smith and smith I thought.

When I offered, tongue in cheek, to go out the back to cut it myself, the shop assistant looked at me blankly for a few seconds in quiet contemplation but decided rightfully that it was not an option.

[Beagle]

Another private equity company bringing a company with a chequered history to the market when the market is currently priced at 22 year high's on a forward PE basis.
Yes this rush of IPO's is strategically timed and NO companies such as this which have cyclical earnings should not command a PE of early teens in anything other than an irrational market.

Hirepool Mk2 anyone ? YAWN...

[winner69]

Where's the growth?

A company in trouble, bought cheap by private equity, financially engineered now to sell into a strong market?

Indicative pricing says earnings $19m (current or next year I don't know but that's what the PE ratio mentioned gives)

2013 profit was $8m on $140m odd sales

So $8m to $19m is real growth eh Balance ....there's the growth

And all those glass towers in Christchurch to come

[MAC]

Might have been more interested a couple of years ago in Metroglass earlier in the macro economic cycle.

There is some growth on the horizon but they don’t have a particularly high proportional exposure to the Christchurch market, in similar fashion to FBU and STU.

Not for me at $1.70, there are better propositions in the market right now.

http://www.scoop.co.nz/stories/BU1407/S00201/metroglass-bookbuild-sets-sale-price-at-170-sources.htm

Disc: not investing

[longy]

Indicative pricing says earnings $19m (current or next year I don't know but that's what the PE ratio mentioned gives)

2013 profit was $8m on $140m odd sales

So $8m to $19m is real growth eh Balance ....there's the growth

And all those glass towers in Christchurch to come

At least it is an easy to understand business. As double glazing is now and standard practice in new building an most almost replacement glass for door or windows have to be strength glass isn't it?

So more or less it is depending on property cycle and new building consents.

I am wondering who else in NZ is producing glass panels and what is the chance that these glass panels could come in from over sea. I know that some kitchen panels are from Germany.

[nextbigthing]

who are their competition and will they be up against imported glass from china that is now duty free under our FTA

Metro import it from China themselves...

[dingoNZ]

I see them having strong growth during FY 15, 16 and 17 but flattening off and possibly even negative growth post Chch rebuild.

[macduffy]

Now, there's a surprise. MetroGlass issue oversubscribed!

http://www.stuff.co.nz/business/industries/10240873/Metroglass-IPO-oversubscribed?cid=edm:businessday:dailybrief

[winner69]

Now, there's a surprise. MetroGlass issue oversubscribed!

http://www.stuff.co.nz/business/industries/10240873/Metroglass-IPO-oversubscribed?cid=edm:businessday:dailybrief

I understand the Aussies were really interested / got sucked in big time

[winner69]

you cant beat a continuation of the 11% pa revenue growth through to September 2015

And EBITDA to grown at 45% pa from FY12 to FY14 and will grow at 22% pa through to FY15

Pretty good eh

Sept NPAT forecast 12 months Sept 15 is $21.2m ..... so a PE of 15 future earnings

That based on NPAT -- not the NPATA that they seem to use in the prospectus

[winner69]

Mike doesn't get it one little bit. Probably wont be putting any Metro in his portfolio. He going to miss out then
http://www.chrislee.co.nz/market-news


Quote

Drafty? – Metroglass Tech (MGT) seems to be in a real hurry to float their shares on the NZX!

It’s almost like someone called in to report a broken window, its cold and the draft is cooling the home rapidly and MGT is on its way and hopes to have the situation resolved by sunset.

The media has reported that the share price will be set at $1.70 (a semantically important 5 cents above the $1.65 minimum) after discussions behind closed doors with institutional investors.

Behind closed doors… recall my comments from last week about the desirable alternative of transparent, all inclusive, public book builds using the easily developed, but steadfastly blocked, online service portals.

The vendor of MGT is…. one moment.. ahh yes, it is another private equity fund: Crescent Capital.

Private Equity ~ capital market development supporters?, leave value on the table?, transparency?

I have a view that MGT owners would be much better at selling opaque windows for a bathroom than clear windows for a sunroom.

Could it be that the marketing pitch for the current share price will include the high volume of building consents in Canterbury and Auckland plus the push to see councils accelerate further development?

What’s the rush?

[winner69]

Anybody having a go with Metro this week?

[nextbigthing]

Wonder how much it cost metro to spam the NZX website with their advertising when you open it?

[Okebw]

Wonder how much it cost metro to spam the NZX website with their advertising when you open it?

I suspect that may come included in the package for any listing on the main board. IKE and Scales both had them last week too

[Harvey Specter]

Wonder how much it cost metro to spam the NZX website with their advertising when you open it?It would be 'Free' with any listing (which costs heaps).

[winner69]

Solid start to trading.

Latest building consents say plenty of work for next few years

Must be a good investment - hey our beloved Milford have taken a 5% stake.

Should expect steady rise in shareprice from here

[nextbigthing]

Are you in Winner?

[winner69]

Are you in Winner?

Thought it worthwhile to give it a go to see what happens

Should be busy as making sure those targets are met

[winner69]

Milford pumping in $16m and harbour Asset $19m are fairly big chunks.

Must have some confidence in Metro

Hope this is not another of these threads I talk to myself. Doesn't really matter if it does as the stocks in question are usually successful investments

[Harvey Specter]

Winner - sorry to interrupt your conversation with yourself ;)


Milford pumping in $16m and harbour Asset $19m are fairly big chunks.Big investment by Harbour but for Milford, their FUM are so large they have to invest in every second stock dont they.

[winner69]

Winner - sorry to interrupt your conversation with yourself ;)

Big investment by Harbour but for Milford, their FUM are so large they have to invest in every second stock dont they.

Miford prob have an interest in almost every stock ....nice to have so much of other people's money to play with eh

[macduffy]

Miford prob have an interest in almost every stock ....nice to have so much of other people's money to play with eh

I see that Brian Gaynor expects Metro to be included in the NZX 50 "which means most fund managers will have to buy the shares."

[winner69]

I see that Brian Gaynor expects Metro to be included in the NZX 50 "which means most fund managers will have to buy the shares."

That's good ... and good for the shareprice

[winner69]

Forbar in raptures over Metro

OUTPERFORM they sale

Geez James is enthusiastic
http://www.radionz.co.nz/audio/player/20149022

Just imagine how much glass needed to get 92% of NZ houses retrofitted to double glazing. Wow

Shareprice relatively strong post IPO as well

[Beagle]

We've looked into double glazing our 320 square metre Auckland home which has lots of floor to ceiling glass. Inadequate return on capital employed...it wasn't even remotely close in terms of cost benefit analysis, (Ditto solar power).
Heat pump(s) and good thermal curtains are cost effective and cosy. 14.3 times earnings reflects the short term boom in the Chch rebuild, longer term, not so bright. FBU is considerably over valued in my opinion and as a cylical company wouldn't make it on to my investment radar at anything like current PE multiples. Implying a semi cyclical company is cheap because another is expensive is like saying an ice-cream at $5 at the movies is cheap because a big tub of popcorn is $10. Looks like it's my turn today to hand out reality checks.

[winner69]

Close at $2.00 on Friday

Been pretty solid if not spectacular since IPO three months ago

Building outlook pretty rosy for the next few years .....and don't forget all those retrofits coming up.

Every time I hear nick go on about another 300 houses here and another 250 here from these Accords I just multiple that by 20 to get the number of new windows for Metro

[Beagle]

Close at $2.00 on Friday

Been pretty solid if not spectacular since IPO three months ago

Building outlook pretty rosy for the next few years .....and don't forget all those retrofits coming up.

Every time I hear nick go on about another 300 houses here and another 250 here from these Accords I just multiple that by 20 to get the number of new windows for Metro

Well done mate.

[winner69]

First profit report since IPO and within prospectus numbers

Commentary a bit bearish. Sales down because of industry constraints and challenges ahead. Market not expected to peak as high as they first thought but growth will last for longer.

Market not all that excited and down to IPO price.

Think their place in life is steady as she goes and a solid but in exciting performer.

[percy]

First profit report since IPO and within prospectus numbers

Commentary a bit bearish. Sales down because of industry constraints and challenges ahead. Market not expected to peak as high as they first thought but growth will last for longer.

Market not all that excited and down to IPO price.

Think their place in life is steady as she goes and a solid but in exciting performer.

And to think I thought you only invested in out performers?
Industry constraints.
Challenges ahead.
Commentary "a bit" bearish.
I think the market is correct.

[winner69]

And to think I thought you only invested in out performers?
Industry constraints.
Challenges ahead.
Commentary "a bit" bearish.
I think the market is correct.

Now stop being cheeky, i might get offended.

Gave up on Metro a while ago when the market thought 2 bucks was enough

[percy]

Now stop being cheeky, i might get offended.

Gave up on Metro a while ago when the market thought 2 bucks was enough

My faith in you is restored!!!!

[winner69]

My faith in you is restored!!!!

Was going to add to your reputation but apparently I have to spread it around. You haven't had many green things lately

So bad luck

[percy]

Was going to add to your reputation but apparently I have to spread it around. You haven't had many green things lately

So bad luck

May not have had any green ones,nor have I had any red ones,so all is well.!

[Arbroath]

IMHO Metro is a very risky investment. Ex-Private Equity ownership from a previous recessionary collapse. Value inflated as economic conditions improve (then sold to the public) and a few cyclical factors helping but valuation across the cycle way too high...
In saying all that the market in general is not awash with good value opportunities - time to be defensive for mine and only hold a few high quality companies with the balance in cash deposits awaiting better value



And to think I thought you only invested in out performers?
Industry constraints.
Challenges ahead.
Commentary "a bit" bearish.
I think the market is correct.

[winner69]

Well a nice new multi million dollar factory to competitively service the current building boom ....and share price languishes below IPO price. Now $1.66

In spite of good long term prospects this is its lot in life. Methinks its been tarred with the same brush as Fletchers and will be viewed in the same light ....solid but always a bit disappointing.

Good company now. The company will do well .......the share price will always be 'undervalued' ........but not really my type of investment.

[enzedex]

Any guesses on when the MPG share price will stop falling? It's the only share I've ever bought on the advice of an "expert". Biggest loss I've had!

[winner69]

Any guesses on when the MPG share price will stop falling? It's the only share I've ever bought on the advice of an "expert". Biggest loss I've had!

Metro Glass as a company will continue to perform well.

However NZ punters aren't that keen on NZ building related stocks. It is tarred with the same brush as FBU and STU and as such the share price will languish and if overall market sentiment continues to be a dismal it will fall further.

You'll get the dividends but can't see the share price of MPG (and the other 2 mentioned) doing much over the next year, eps with its current negative bias

[winner69]

Hey nzx - I didn't realise how far mph has fallen. A 142 close is pretty terrible.

Just confirms building stocks really out if favour.

Rather strange as the building industry still seems to be pretty active at the moment. Talk of weakening economy because Christchurch rebuild peaked put punters off?

[Beagle]

Yep its all about forward looking perceptions. Well timed float that's worked well for the promoters.

[winner69]

Yep its all about forward looking perceptions. Well timed float that's worked well for the promoters.

Yes, forward looking perceptions are important.

The headlines say the economy is tanking ......not usually a good time for building related companies ....mpg share price under pressure.

Great company though. They will continue to make. Decent chunk of money but maybe not as much as punters want.

Glad I didn't hang around after the float for to long.

Some 30% off its high will not please many. The market remembers this which means punters will never get excited with them again.

One where watching the chart is important

[enzedex]

Some 30% off its high will not please many.

Yep. Over 30% down on what I bought it at earlier in the year. Bad timing! Now an NZX price enquiry notice today.

I don't see anything to justify the massive price drop. Yes Christchurch rebuild will peak and slow down but Auckland will steam ahead for years and all those houses need glass.

I'm tempted to buy more.. Would it be good money after bad?

[winner69]

Not loved or wanted at the moment is it ...sinking lies lead balloon

Forecast EPS march 16 us 11 cents to 14 cents. Obviously hose selling believe 11 cents (or less) so at 11/12 PE 130 could be right.

I wouldn't buy anymore until carnage is over.

ASM next week ....hope we hear more but I reckon they make only a bit less than what they said hey wold in IPO docs ....but thy seems enough to have pissed off the market

A large proportion of the CBD rebuild in Chch has a heck of a lot of glass in them ....the construction material of choice now.

Jeez 190 shareprice when I sold seems not that long ago.

[Beagle]

Hi enzedex

Welcome to the forum. I feel sorry for you. Its not a stock I really follow but the brokers seem to like it with a consensus valuation of $2.00
http://www.4-traders.com/METRO-PERFORMANCE-GLASS-L-22315972/consensus/

In my view concerns over the Chch rebuild having peaked are probably a little overdone especially in as much as there's still a really rampant building boom going on in the much larger Auckland market.
Consensus eps for FY16 is 15 cps. My usual personal yardstick I use for building companies is a PE of 10, because of the cyclical nature of their earnings. On this basis Fletcher Building is wildly overvalued and I have though as much for a VERY long time now and MPG is now slightly undervalued. Watch their response to the NZX price enquiry to see if that shed's any light on the situation.

Hopefully Winner will share his greater expertise with regard to this stock shortly. In terms of throwing good money after bad...my personal viewpoint is I am reluctant to buy any stock when its established a clear trend downwards until there is clear evidence of the chart forming some sort of bottom. Fundamentally it must be approaching a value buy somewhere around these level's but it could well be a value trap and I'd prefer the chart (technical analysis) to be lining up with fundamental analysis before considering buying.

Edit, he already has. I'd be attending the ASM and closely looking at the outlook before deciding to buy more if I were you.

[Beagle]

Another private equity company bringing a company with a chequered history to the market when the market is currently priced at 22 year high's on a forward PE basis.
Yes this rush of IPO's is strategically timed and NO companies such as this which have cyclical earnings should not command a PE of early teens in anything other than an irrational market.

Hirepool Mk2 anyone ? YAWN...

I stand by this comment I made on page 1 of this thread on 2 July 2014. PE of 10 is the magic number for a small building products company. Whatever their real FY16 forecast is, multiply by 10 and that will give you an idea of where I see fair value. Probably the shares are fair / slightly good value now but with ALL the momentum downwards, the market can stay irrational longer than investors can stay liquid.

[winner69]

Sure is a sad looking chart

Seems to have gone downhill since the half year announcement late May

NPAT ahead of PFI but sales were down because of 'constraints and backlogs. in the industry

The story was that this building cycle might not peak as high as forecast but would remain pretty high for longer. That's how I see it as well

But selling has been relentless eh,

If FY16 NPAT is say $20m odd that's 11/12 cents a share

Rogers rule of thumb then share price 110-120

Yes ASM will be telling - a few watching I would think

Bad as I have said building industry stocks are not liked at the moment. Bad sentiment is hard to overcome, even though Mike Hosking says the economy is in good shape

[Beagle]

Down 30 cents in August alone and we're only just over half way through the month !! That's as ugly a drop as I've seen for a while...not surprised the NZX have a price enquiry, that's a shocker. Something not right. Bad news on the outlook coming at the ASM ??

[winner69]

Down 30 cents in August alone and we're only just over half way through the month !! That's as ugly a drop as I've seen for a while...not surprised the NZX have a price enquiry, that's a shocker. Something not right. Bad news on the outlook coming at the ASM ??

Only been listed a year so not a good look is it.

Methinks that whatever is behind the fall means the 'stench' will stay with them for many years. Could become a pariah of the market

[winner69]

If any body reads the latest MBIE Construction Pipeline Report you would think that's the likes of Metro will be very busy for a few years. 'Unprecendented levels' of new building activity coming up .....and then Metro do heaps of retrofit double glazing and other work.


Extract - New Zealand is building more than ever before and construction activity is forecast to hit unprecedented levels, according to the third National Construction Pipeline Report published by the Ministry of Business, Innovation and Employment (MBIE) today.

http://www.mbie.govt.nz/news-and-media/news-from-around-mbie/construction-continues-rapid-rise

[winner69]

The share price started tumbling about the same time as the NZD v USD

Most of their glass is imported ....will put margins under pressure

Maybe that's the cause

[nextbigthing]

...Bad sentiment is hard to overcome, even though Mike Hosking says the economy is in good shape...

Yes, but how is the sentiment around Mike Hosking at the moment?

[winner69]

Yes, but how is the sentiment around Mike Hosking at the moment?

....you tell me, you be one of his biggest fans wouldn't you?

I gave up on him in the morning .....Susie on National Program better even though that Guyon is a bit of twit.

[tim23]

I'm with Winston - Hosking (and Larry Williams & Jamie McKay) are shameless Tory cheerleaders. By the way I was going to swap my FBU for MPG and thought I had missed the boat on timing - lucky miss!

[Onion]

Most of their glass is imported ....will put margins under pressure

Their competitors will be in the same boat will they not?

[Onion]

We have been looking for replacement windows for the Onion house. All suppliers that we have looked at use Metro's double glazing units whether they use aluminium or wooden frames. Metro themselves compete directly as a fitting vendor so whether or not they get are the fitting company they will clip the ticket.

[winner69]

Their competitors will be in the same boat will they not?

They say it will impact margins. How much depends on how competitive the market is.

Analysts always bring it up in discussions. Not been a problem yet they say cause they have this rolling 6 or 12 month hedge, but analysts keep asking for the impact.

So it seems your double glazing might be costing you more if you don't get on to it pretty soon.

Pretty smart little company. Good operators. High margins at the moment.

[winner69]

Good recovery today

Maybe there has been one desperate shareholder who wanted/need out in a hurry

[winner69]

IPO docs said -5% fall in NZD v usd would impact margins $0.3m ....before any mitigating actions to offset it.

So current fall in NZD is $1.0m impact

[Puggy]

Their CFO John Fraser-Mackenzie just picked up 20,000 shares. Interesting how their response to the NZXR inquiry was basically "nothing to see here, move along".

[winner69]

Deutsche Sydney /Craig's have a bullish paper out on MPG. Target $1.87

I still reckon a $2,plus stock early next year.

Only thing holding them back is the building industry capacity to meet the building demand out there.

New residential consents currently running at 26,000 a year and forecast to go to anannual rate of 30,000 plus late 2016.

The constraints/delays in completing projects only says that Metro should be pretty busy for longer than expected .....and then again there is all the retro fitting going on.

Poor sentiment to building related stocks in nz but growth should help metro overcome that

[winner69]

Share price looking much stronger this week

Amazing it got as low as 130

Some 12% above that at the moment

When 2 bucks punters will wonder why it wet so long

[winner69]

Heading into the 160s

Seems pretty strong demand, for shares and their products

All those new houses needing windows

What's the saying, something like price follows eps or something like that isn't it

[winner69]

Still trucking along quite nicely is MPG

Quite a way up from the mid 130s

[Louloubell]

Another big institution getting out yesterday. Does history show this means that the share price will go up? Immigration levels and commercial activity demands plenty of building to be done for some years to come. I selected Metroglass over FBU as my building component of my portfolio. Plenty of upside and reasonable dividents.

[Louloubell]

Nice little uptrend and all quiet on the Western front.

[Louloubell]

Continuing in the right direction prior to the results announcement. Is Metroglass too boring to talk about?

[winner69]

Reasonable size acquisition in Australia

Good move

https://www.nzx.com/companies/MPG/announcements/287113

[karlos68]

My wife and I attended a Metro Direct customer conference in Auckland mid year and all was positive.
Of interest was an Economist from a Bank providing foresight and looking good for forthcoming year.
I own a glass company and began purchasing from Metro direct earlier this year. At times now there are delays of delivery due to plant running at full capacity. I don't own this stock but just saying for the benefit of holders.

[percy]

My wife and I attended a Metro Direct customer conference in Auckland mid year and all was positive.
Of interest was an Economist from a Bank providing foresight and looking good for forthcoming year.
I own a glass company and began purchasing from Metro direct earlier this year. At times now there are delays of delivery due to plant running at full capacity. I don't own this stock but just saying for the benefit of holders.

Thanks Karloss68,always nice to have "insider's" information.!

[karlos68]

Thanks Karloss68,always nice to have "insider's" information.!

Struck problems with 2 other suppliers last year, so gave Metro ago.
Been brilliant....... any issues resolved quickly and without opposition......... best part is manager said just buy from us and we'll flick you some work for free, comes when their boys are at max capacity and some overload is passed on, sweet for me.
Next years conference has been suggestion maybe to be held on a Friday, stay in Auckland overnight then activity on Saturday like out fishing on a boat for the day. Not a fisherman myself but enjoy the atmosphere and I expect the booze will be flowing.


Lets look chart

8379
Oh dear........looking like heading down:(

[karlos68]

Thanks Karloss68,always nice to have "insider's" information.!

Been yapping to Hamilton Branch Manager.........They have new glass processing equipment in their possession and looking for new larger premises.

[percy]

Been yapping to Hamilton Branch Manager.........They have new glass processing equipment in their possession and looking for new larger premises.

You are doing a great job.

[winner69]

Metro making the most of the current building boom

A couple of more years left in this cycle so more good results to come

https://www.nzx.com/files/attachments/248462.pdf

[BlackPeter]

Metro making the most of the current building boom

A couple of more years left in this cycle so more good results to come

https://www.nzx.com/files/attachments/248462.pdf

Solid result, but probably not exceeding expectations. Despite a 23% increase in revenue is NPAT up by just 5% (evil taxman ...) and the increase in liabilities compared to 6 months ago is quite significant (I suppose to buy into their Australian adventure).

As well - while the revenue growth looks good, it is not quite what the analysts predicted for the FY (though admittedly - for the FY there will hopefully be a larger contribution from the Australian branch, i.e. FY predictions might still work out).

Not sure, I expect the SP to shoot from here into the sky ... might even slightly dip (after the initial excitement is over).

Discl: hold (a wee parcel)

[BlackPeter]

Just noticed that analysts on 4 traders somewhat upgraded this stock last week. Slight tick up on expected revenue and earnings over the coming years together with an improved recommendation from hold (5.5) to accumulate (6.5).

One of these boring stocks nobody wants to talk about ... in my view good value and a fast growing company in a growth industry given the ongoing housing crisis and home insulation programs;


DYOR -

discl: holding;

[LAC]

Guidance not that flashy
https://www.nzx.com/files/attachments/252367.pdf

[winner69]

Guidance not that flashy
https://www.nzx.com/files/attachments/252367.pdf

Disappointing eh

Sell heaps more and make stuff all more

Still talking growth ......but the current building boom is nearing its peak ......could signal 2018/2019 could be a bit difficult

[BlackPeter]

Guidance not that flashy
https://www.nzx.com/files/attachments/252367.pdf

Well, yes - while revenue forecast is in the ballpark the analyst expected, NPAT forecast has been pulled back, but still same as last year (but obviously for a larger company, i.e. RoE is down).

They are claiming reduced demand after the Wellington earth quakes (somewhat counterintuitive) and point to some "growing pains" (new factory + Australian adventure + acquisition expenses), which are conceivable.

Might be worthwhile to listen into the conference call today.

[Beagle]

I would have thought in the context of the current building boom, (which won't last indefinitely), and the extra work required because of the earthquake that's a very poor guidance no matter how you slice and dice it.

[sb9]

I would have thought in the context of the current building boom, (which won't last indefinitely), and the extra work required because of the earthquake that's a very poor guidance no matter how you slice and dice it.

Couldn't agree more, if this is what they can manage around building boom time, just imagine what it'll be when its all gone...

Disc - not a holder

[Louloubell]

Talk about a share price being punished!

[BlackPeter]

I would have thought in the context of the current building boom, (which won't last indefinitely), and the extra work required because of the earthquake that's a very poor guidance no matter how you slice and dice it.

Absolutely, and the markets seem to agree. Amazing how the lemmings are jumping off the cliff.

I guess the question is just - is the day of a bad announcement the best time to run? Great opportunity to fall into the usual "undershoot" ;).

[Beagle]

Its not really a company I follow BP but I note even with the 17% decline in SP today that puts it on a PE of 14 based on last years earnings and investors need to consider if this year's earnings will be lower, (it appears they will be slightly).

On the other hand FBU is on a historic PE of 15 and investors need to weigh up the relative outlook's of each company. Based on a quick and dirty comparison I'd say this mornings fall, (so far), appears fully warranted and quite possibly investors pain isn't finished yet by any means.

They call themselves a growth business in the NZX announcement... Hmmm...growth or cyclical ?, you folks be the judge.

[Arbroath]

Its not really a company I follow BP but I note even with the 17% decline in SP today that puts it on a PE of 14 based on last years earnings and investors need to consider if this year's earnings will be lower, (it appears they will be slightly).

On the other hand FBU is on a historic PE of 15 and investors need to weigh up the relative outlook's of each company. Based on a quick and dirty comparison I'd say this mornings fall, (so far), appears fully warranted and quite possibly investors pain isn't finished yet by any means.

They call themselves a growth business in the NZX announcement... Hmmm...growth or cyclical ?, you folks be the judge.

I'll be blunter Roger - I think MPG is a very average business that is still overpriced and if you think avbout its across the cycle earnings is worth maybe $1.10-$1.30 a share. Not something I'd invest in because in great times for them they are not performing well enough - clearly a cyclical even if they are acquisitive and on that basis for me a PE of 10-12 is warranted at best. On 12x last years earnings they are c. $1.33 max.

[BlackPeter]

Well, at least until todays announcement - they certainly could call themselves a growth company ... just have a look at the revenue and EPS growth on 4traders http://www.4-traders.com/METRO-PERFORMANCE-GLASS-L-22315972/financials/. CAGR of something like 25%;

So - they now said their growth is in line with forecasts, however the earnings are this year (as well due to one offs) not growing (and might slightly drop).

Does not sound so far like the end of the world to me, but I guess time will tell.

[winner69]

MPG just like FBU - should always be doing better (performance wise) ... especially when market conditions are going for them

And share price starting to reflect this

Pretty impressive factory if you ever get a chance to get a tour around it.

[winner69]

Catching falling knives and all that sort of stuff seems appropriate today ...

Reminds me of the glass business - can tell how long somebody has been a glazier by how many fingers they have

[Beagle]

I'll be blunter Roger - I think MPG is a very average business that is still overpriced and if you think avbout its across the cycle earnings is worth maybe $1.10-$1.30 a share. Not something I'd invest in because in great times for them they are not performing well enough - clearly a cyclical even if they are acquisitive and on that basis for me a PE of 10-12 is warranted at best. On 12x last years earnings they are c. $1.33 max.

I agree 100% (but was trying to be a bit more diplomatic for once lol). Sales are growing for sure but by my reckoning the fact of the matter is astute well managed companies make acquisitions on attractive fundamentals which are EPS accretive immediately whereas average companies can take years to achieve the economies of scale and synergies they're looking for. Comes down to the quality of management and capabilities of the team handling acquisitions. I'd give them a C- at best based on their track record to date.

[winner69]

Looking H2 performance from mid point of their guidance

Australia - $24m revenues and $4.3m normalised ebitda is in line with what they said on acquisition (maybe a bit better)


But NZ - H217 revenues up 9% on H216 (H1 was nearly 20%) but normalised ebitda down 17% - gee whiz that's a lot

Hope H2 trend doesn't carry into H118

Did these things come up in the briefing?

[winner69]

Just a temporary blip by the sounds of it

All hunky dory for the future

Great buying at today's price.

We'll look back in a years time and ask whst was all the fuss about - just like we did after the price collapsed ino the 140s just over a year ago.

They need to manage market expectations better - only beginners at that game but one would have thought Goulter would be doing better than this

http://www.sharechat.co.nz/article/3fba2240/update-metro-glass-shares-tumble-after-weaker-than-expected-guidance.html?utm_medium=email&utm_campaign=UPDATE%20Metro%20Glass%20shares%20tum ble%20after%20weaker-than-expected%20guidance&utm_content=UPDATE%20Metro%20Glass%20shares%20tumb le%20after%20weaker-than-expected%20guidance+CID_a5fe2d391871bc292126fa1924 6743d6&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle3fba2240update-metro-glass-shares-tumble-after-weaker-than-expected-guidancehtml

[BlackPeter]

Looking H2 performance from mid point of their guidance

Australia - $24m revenues and $4.3m normalised ebitda is in line with what they said on acquisition (maybe a bit better)


But NZ - H217 revenues up 9% on H216 (H1 was nearly 20%) but normalised ebitda down 17% - gee whiz that's a lot

Hope H2 trend doesn't carry into H118

Did these things come up in the briefing?

They did. Lots of analysts from all the big brokers and a number of smaller investors. Just from memory and a few notes:

Nigel Rigby (the CEO) talked a lot about problems with complexity - they introduced a number of new manufacturing machines and methods (and added printing and laminating) - and went through a learning curve seemingly a bit longer than they hoped for. He claims that these problems are now a thing of the past (but obviously impacted on the results of this FY).

They changed manufacturing to a continuous 7 day operation .. and it didn't seem to have helped to do that in the most busy time (prior to Christmas). Lots of organisational problems, but it appears now under control.

Manufacturing seemed to have had as well problems with delays of building projects (and than coming at the wrong time). Not sure, whether I heard that they so far have a solution to that problem.

All of above means higher cost - i.e. reduced margins and earnings.

One analyst question was whether he expects these higher cost to stay and move into FY18 - and the answer was that he does see the additional cost to drop.

I guess Nigel didn't come across as a great speaker - and certainly not one of these wizards who can sell you anything, but he appeared to be open, honest and it came across that he does understand the factory. I think these are the skills they need most at current.

He said as well that he sees this as the bottom: December / January are the worst months in this industry - and the teething problems in the factory seem to be now under control (what should get the margins up again).

Other things I have heard:

Margins are great (if they don't disappear into manufacturing problems) - and new building standards introduced last year gave them initially some trouble in the fab, but should give them now (that they overcame them) as well a moat compared to oversees producers.

[karlos68]

Lets look chart

8379
Oh dear........looking like heading down:(


That's another "Yup"

8650

[Beagle]

Yes from a technical perspective there was a very clear break down through the 100 day MA in mid November 2016 at $2.05 which for TA people said get out. Looking at the whole chart since the IPO in July 2014 @ $1.70 it says the market has been expecting a better performance from management who simply haven't delivered.

[winner69]

Share price down 30% in a few months - about 18% before he crash today

Makes you wonder if the market per se was sort of aware of what was happening with MPG and todays announcement won't be a surprise for some.

[BlackPeter]

Yes, I was wondering that myself. Interesting that the downtrend started basically after the release of the (quite good) HY results. It was however on quite low (but after the announcement) volumes. I guess it is a big factory - and given that the downgrade was based on manufacturing problems is it hard to avoid that some staff members talk about their frustrations at home or to friends.

Could they have announced earlier? Possibly, but than - you can't really announce every teething problem.

On the bright side - analyst forecasts have been updated - and they don't look that bleak for the years to come:

http://www.4-traders.com/METRO-PERFORMANCE-GLASS-L-22315972/financials/

This would turn into a forward P/E of 11.6 combined with a CAGR of 25. Not too shabby ... even if the CAGR is quite likely to drop (I guess, where are they supposed to go as largest player in town)?

Big question is - do we trust in management saying they have the teething problems now under control? If yes, they might be well a buy.

[BlackPeter]

Sure - not a huge number, but I still take that as a positive news if management thinks that buying MPG shares at the current price is a good investment opportunity:

North island GM Dean Brown purchased 15,700 ordinary shares (spending $24,821) at roughly $1.58 each and added that to his existing holding;

https://www.nzx.com/companies/MPG/announcements/296599

[BlackPeter]

Interesting ... and I was wondering who is driving the SP so fast back up again. NZ Super was seeing a bargain and bought in big. They gave today SSH notice. No wonder there have been hardly any MPG shares left for me to average my holding down ;).

https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=4382739

Sort of confirming my suspicion that MPG is currently undervalued ... NZ superfund typically pretty good in buying good value;

[winner69]

Interesting ... and I was wondering who is driving the SP so fast back up again. NZ Super was seeing a bargain and bought in big. They gave today SSH notice. No wonder there have been hardly any MPG shares left for me to average my holding down ;).

https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=4382739

Sort of confirming my suspicion that MPG is currently undervalued ... NZ superfund typically pretty good in buying good value;

Wonder how many they had a month or so ago - probably quite a few so just topping up?

Good sign though

[BlackPeter]

Wonder how many they had a month or so ago - probably quite a few so just topping up?

Good sign though

Disclosure says: "On 6 March 2017, Devon Funds Management purchased 1,004,506 shares in Metro Performance Glass Limited." Devon Funds management is holding on behalf of NZ Super.

This means they had already 8.5m shares. Still - a 1 million share top up is more than I could have afforded ;).

[janner]

Disagree on many other things..

Agree with your thoughts on this one... Buying ?? Holding ??

[bottomfeeder]

A lot of investment funds are supporting MPG. But share price is still dropping slowly. Another IPO with high amount of goodwill. I think its a symptom of low interest rates. Nows the time to float reasonable companies and hike up the price because interest rates are low. I see now we have two classes of goodwill. The new one is Customer Relations. Ahh a rose by another name. When interest rates are low it is probably a good time to stay out of the market.

But at least they are producing something where there is demand. Must be a long term hold. I will buy as they drop in price as the market writes off the goodwill, that the company should be amortising.

[JoeGrogan]

Some huge volume today as the share price continues to fall.

[James108]

If you take the view that they are not a growth company and simply a company that has rode the construction boom wave then you should average their earnings over the cycle. In which case MPG still seem over valued.

[bottomfeeder]

The funds seem to be supporting this company. For every seller there is a buyer.

[Beagle]

Its not really a company I follow BP but I note even with the 17% decline in SP today that puts it on a PE of 14 based on last years earnings and investors need to consider if this year's earnings will be lower, (it appears they will be slightly).

On the other hand FBU is on a historic PE of 15 and investors need to weigh up the relative outlook's of each company. Based on a quick and dirty comparison I'd say this mornings fall, (so far), appears fully warranted and quite possibly investors pain isn't finished yet by any means.

They call themselves a growth business in the NZX announcement... Hmmm...growth or cyclical ?, you folks be the judge.


I'll be blunter Roger - I think MPG is a very average business that is still overpriced and if you think avbout its across the cycle earnings is worth maybe $1.10-$1.30 a share. Not something I'd invest in because in great times for them they are not performing well enough - clearly a cyclical even if they are acquisitive and on that basis for me a PE of 10-12 is warranted at best. On 12x last years earnings they are c. $1.33 max.

Posted on 3 February 2017 when SP was $1.50. Somewhat ironic that since then the FBU fiasco has unfolded.
I think what's clear now is that both these companies are pure cyclical's and neither warrants a PE of more than an average of 10 across the business cycle.
Seeing as we're at the peak of the building cycle now, in my opinion a very strong case can be made for using a PE lower than 10 based on last years earnings at the cycle peak. On that basis both MPG and FBU have the potential for significant further falls.

Something of a brave call after this has fallen so far but I wouldn't be at all surprised to see $1.00 in the foreseeable future. Likewise I remain convinced that FBU's previous tendering process was systemically flawed and a significant number of their contracts won but yet to be commenced will involve work at materially compromised commercial profit margins, potentially further losses to come in future periods.
Why anyone would buy them above 10 times last years earnings, (circa $6.60) is completely lost on me especially seeing as like MPG, they're the building company that was always supposed to be on the improve. To early for a couple of Tui's ?

[winner69]

Hard to believe that it wasn't that long ago I bailed at over $2. A low of $1.30 was good buying eh

Market sure is a funny thing - as Mr P used to say 'the market giveth but the market also taketh away' - good judgement meant I avoided the taketh away bit this time around.

Still watching though - fundamentally a good business (and an interesting one)

[Beagle]

Hard to believe that it wasn't that long ago I bailed at over $2. A low of $1.30 was good buying eh

Market sure is a funny thing - as Mr P used to say 'the market giveth but the market also taketh away' - good judgement meant I avoided the taketh away bit this time around.

Still watching though - fundamentally a good business (and an interesting one)

Well played mate :) Wait for $1 and back in ? Please let me know when you decide to get back in, happy to back you're judgement on this one as you're the one with the runs on the board and you obviously know the company better than I do.

[sb9]

Hard to believe that it wasn't that long ago I bailed at over $2. A low of $1.30 was good buying eh

Market sure is a funny thing - as Mr P used to say 'the market giveth but the market also taketh away' - good judgement meant I avoided the taketh away bit this time around.

Still watching though - fundamentally a good business (and an interesting one)

As someone said on this thread where you the price be if they don't have big funds support??

[sb9]

Just noticed the turnover for the day...wow more than 13Ml shares traded so far!!!

[Beagle]

Just noticed the turnover for the day...wow more than 13Ml shares traded so far!!!

Winner must be starting to quietly accumulate then :D

[BlackPeter]

Obviously - the 130 was expected to be a quite important support line ... but not sure I expected that volume ...

More than 14 million shares changed hands (that's close to 8% of all issued shares) and the 130 did hold.

I know, it is currently fashionable to talk them down, but I still see (certainly at this price) opportunities.

Despite the downgrade early February - revenue is rising this year by 30% ... and given that they invested this financial year heavily into new technology (which screwed up their manufacturing process prior to Christmas) ... would I assume that the coming financial year (with all the new toys working) will be better.

Analyst consensus: $1.77; forward PE: 10.6 and forward CAGR above 25% - and all this for $1.30 per share?


Discl: couldn't resist ...

[winner69]

Obviously - the 130 was expected to be a quite important support line ... but not sure I expected that volume ...

More than 14 million shares changed hands (that's close to 8% of all issued shares) and the 130 did hold.

I know, it is currently fashionable to talk them down, but I still see (certainly at this price) opportunities.

Despite the downgrade early February - revenue is rising this year by 30% ... and given that they invested this financial year heavily into new technology (which screwed up their manufacturing process prior to Christmas) ... would I assume that the coming financial year (with all the new toys working) will be better.

Analyst consensus: $1.77; forward PE: 10.6 and forward CAGR above 25% - and all this for $1.30 per share?


Discl: couldn't resist ...

I think you will be do very well buying at this level ...even if it drops a bit more next week over $2 sometime later in the year is still a great return.

Strong building consents numbers out today - nearly 30,000 dwelling units a year need windows. And the retro double glazing going well. Plenty of work for next couple of years before the recession strikes.

Only short term worry would be NZD

[Beagle]

After applying vast amounts of flea powder one must stand back and allow time for it to work. Watching the charts for hard evidence this downturn is over before considering backing this pup.

[t.rexjr]

A big chunk of that 13mil was off market for $1.26 as far as I can see

[karlos68]

Lets look chart

8379
Oh dear........looking like heading down:(

All cool regarding information from "Karloss68" Percy





Superhot Update
8780


See.....Told ya so

[JeremyALD]

Starting to see value in this one at the current price. Anyone else diving in?

[JoeGrogan]

Starting to see value in this one at the current price. Anyone else diving in?

Yeah jumped in on Friday but have a tight stop loss in place, not quite convinced it's at the bottom yet.

[JayRiggs]

A big chunk of that 13mil was off market for $1.26 as far as I can see

The seller was Fisher Funds.
https://www.nzx.com/companies/MPG/announcements/299279

Typical Fisher Funds buy high and sell low!

[777]

The seller was Fisher Funds.
https://www.nzx.com/companies/MPG/announcements/299279

Typical Fisher Funds buy high and sell low!

How come they do so well then?

[winner69]

The seller was Fisher Funds.
https://www.nzx.com/companies/MPG/announcements/299279

Typical Fisher Funds buy high and sell low!

Must make heaps on the winners - wouldn't made anything on this.

Sold them on 31 April - that's pretty clever

[sb9]

Must make heaps on the winners - wouldn't made anything on this.

Sold them on 31 April - that's pretty clever

Give you that winner, was about to post on the same re selling on 31/04/2017...guess they're in such a rush that forgot about what month they're referring to...lol

[Blondie]

Hi JayRiggs

They are not perfect and don't get them all correct - most Fund Managers have similar train wrecks in their past.

About 10 years ago I spoke to Carmel Fisher at a seminar and asked her how many times they got it wrong. When her reply was "about 1 in 8" I was impressed. Firstly here was someone not making any "b...t" claims (which I wouldn't have believed anyway) and her body language supported that statement, and secondly because it tallied with a similar comment that I had read that Warren Buffet had made. I was left with confidence that here was someone I could trust and believe.

Over the years Fisher Funds have not been backwards at admitting they have got things wrong and I have always found them creditable, approachable and honest to deal with.

Certainly their failure rate has been much less than this "perpetual Newby's" - think WYN,& SLI in common with others on this site, though I have got the odd one right (XRO @ $ 1.00 @ IPO then their $ 0.90 next round).

Cheers

Blondie

[percy]

All cool regarding information from "Karloss68" Percy




Superhot Update
8780


See.....Told ya so

You were spot on.!!
Good call.

[karlos68]

You were spot on.!!
Good call.

Cheers percy.

Metro Hamilton been pumping last few months, busiest it has ever been, my business has had best financial year since way back, flippin seems odd from a quick glance at shareprice that its been heading down.

8785


Looking good

[silu]

I've been looking at this co for a while. Chart looks set for a reversal?

[BlackPeter]

I've been looking at this co for a while. Chart looks set for a reversal?

there are certainly a number of indicators pointing towards a reversal:


130 is a very strong support level (the trend changed at that level before) - and so far seems to hold;
Unusual high volume on Friday would point to "capitulation"
130 is basically a fair fundamental valuation if the company suddenly reduces its growth to something like 2% p.a., otherwise it is a steal (their current 5 year CAGR is 13.3!)
RSI(14) crossed back over the 30. Another indicator for an emerging uptrend ...


Discl: holding and accumulated between 130 and 132 ...
Obviously - DYOR;

[JoeGrogan]

there are certainly a number of indicators pointing towards a reversal:


130 is a very strong support level (the trend changed at that level before) - and so far seems to hold;
Unusual high volume on Friday would point to "capitulation"
130 is basically a fair fundamental valuation if the company suddenly reduces its growth to something like 2% p.a., otherwise it is a steal (their current 5 year CAGR is 13.3!)
RSI(14) crossed back over the 30. Another indicator for an emerging uptrend ...


Discl: holding and accumulated between 130 and 132 ...
Obviously - DYOR;

Totally agree with the fundamental valuation being pretty fair at the current level. Moreover, the 130 support level has been holding pretty firmly so far, looking forward to seeing how things play out.

[BlackPeter]

Anybody else noticed that we had this week volumes well above average and the SP keeps creeping up? Anyway ... due to popular demand I thought we can use the combined wisdom of sharetrader (well, yes - this is YOU) to do some SWOT analysis of the company:

Strengths:

largest NZ Glass manufacturer with more than 50% market share.
natural moat with plenty of sites allover the country: glass manufacturing is better close to the demand side - expensive transport
reliable and consistent revenue growth in the past (CAGR over the last 5 years: 13.3 %)
with one exception (FY2017) consistent EPS growth every year (and hey - while the FY17 results are not out yet, according to the forecast they are at worst 7.5% below last year, at best they achieved the same EPS as 2016)




Weaknesses:

they clearly didn't plan sufficient contingencies for the teething problems they suffered in the recent equipment upgrades and schedule changes. Question is - do they learn from these mistakes or does this point to a systematic skill shortage?



Opportunities:

building market booming
Ongoing demand for houses and office buildings (ChCh rebuild, Auckland housing shortage, population growth)
increased use of (high margin) specialised glas (like heavy duty) in modern building architecture
ACC buying at an historic low - do they know something Fisher Funds and the markets didn't?
A number of technical indicators this week point to a possible trend change (capitulation, SP increasing with good volume, RSI creeping back over 30)
fundamentally ways undervalued if we assume they manage to keep current growth and earnings going (just put their EPS and CAGR into the Graham formula) - and be as conservative as you like
Australian acquisition seems to do so far just fine (but early days) - another big growth opportunity?



Threats:

building market might turn sour (but then ... we have a housing shortage - where will all the new immigrants sleep?)
Australian extension might be more difficult (lots of the strengths and opportunities above missing for the Australian market, and MPG would not be the first Kiwi company losing money over there)
Fisher Funds selling at an historic low ... do they know something we don't?
Despite a small recovery this week - trend chart looks shocking
there always might be a black swan just around the corner


On a more subjective front - I had some interaction during and after the recent downgrade with Nigel and and decided that I give them at this stage the benefit of the doubt ... but hey, this is just me.

Anybody who wants to add to the analysis above?

Discl: holding (XXL).
DYOR

[winner69]

BP - you will do very well getting into MPG at 130 odd. A great opportunity to get cheap undervalued shares.

What you said in your strengths is all true and will see Metro performing well into the future. There will always be new houses and buildings built (boom or bust times) and retrofitting double glazing and other inititiatives just add to the base

They'll still be doing well in years to come so now you got in cheap don't be tempted to sell ...but then again at heart I think you are a trader so will take profits when punters perceive 'trouble'

[winner69]

Hey BP - you on a roll with your recent big entries into SUM and MPG

Might even convince you about Pushpay as your next play - really cheap at the moment

[BlackPeter]

...

They'll still be doing well in years to come so now you got in cheap don't be tempted to sell ...but then again at heart I think you are a trader so will take profits when punters perceive 'trouble'


Hey BP - you on a roll with your recent big entries into SUM and MPG

Might even convince you about Pushpay as your next play - really cheap at the moment

Hmm - define "trader" vs "investor" - but this is probably stuff for a different thread.

Re PPH - how low would the SP for a loss making hyped up start up need to be to qualify as "cheap"? I guess sure, the market might drive it up the XRO, RAK, WYN or PEB-hill, and with some of them at some points in time you could even say with the benefit of hindsight that this was cheap (i.e. less than what the market was prepared to pay at a later stage). However - from a fundamental perspective was so far none of these companies (including PPH) ever "cheap".

But probably better to continue this discussion on the PPH thead ...

[Beagle]

Anybody else noticed that we had this week volumes well above average and the SP keeps creeping up? Anyway ... due to popular demand I thought we can use the combined wisdom of sharetrader (well, yes - this is YOU) to do some SWOT analysis of the company:

Strengths:

largest NZ Glass manufacturer with more than 50% market share.
natural moat with plenty of sites allover the country: glass manufacturing is better close to the demand side - expensive transport
reliable and consistent revenue growth in the past (CAGR over the last 5 years: 13.3 %)
with one exception (FY2017) consistent EPS growth every year (and hey - while the FY17 results are not out yet, according to the forecast they are at worst 7.5% below last year, at best they achieved the same EPS as 2016)




Weaknesses:

they clearly didn't plan sufficient contingencies for the teething problems they suffered in the recent equipment upgrades and schedule changes. Question is - do they learn from these mistakes or does this point to a systematic skill shortage?



Opportunities:

building market booming
Ongoing demand for houses and office buildings (ChCh rebuild, Auckland housing shortage, population growth)
increased use of (high margin) specialised glas (like heavy duty) in modern building architecture
ACC buying at an historic low - do they know something Fisher Funds and the markets didn't?
A number of technical indicators this week point to a possible trend change (capitulation, SP increasing with good volume, RSI creeping back over 30)
fundamentally ways undervalued if we assume they manage to keep current growth and earnings going (just put their EPS and CAGR into the Graham formula) - and be as conservative as you like
Australian acquisition seems to do so far just fine (but early days) - another big growth opportunity?



Threats:

building market might turn sour (but then ... we have a housing shortage - where will all the new immigrants sleep?)
Australian extension might be more difficult (lots of the strengths and opportunities above missing for the Australian market, and MPG would not be the first Kiwi company losing money over there)
Fisher Funds selling at an historic low ... do they know something we don't?
Despite a small recovery this week - trend chart looks shocking
there always might be a black swan just around the corner


On a more subjective front - I had some interaction during and after the recent downgrade with Nigel and and decided that I give them at this stage the benefit of the doubt ... but hey, this is just me.

Anybody who wants to add to the analysis above?

Discl: holding (XXL).
DYOR

Good well balanced post and a very fair synopsis of the situation.

[bull....]

doing a new tiled shower at home with glass sides , metro glass said 3 weeks before glass ready I don't know if that's normal but seems a long time to wait for glass so I guessing they must be busy

[Ghost Monkey]

Good summary BP. I've been watching this company too and I'm tempted at the current price, but not sure how to view last years purchase of AGG. Seems a hefty sum to pay for not a lot of earnings. NZ companies aren't too flash hot with their OZ purchases either.
I'll certainly be looking at that a little closer before I take the plunge.
But NZ side of business looks good. (Currently looking out over Auckland there are a lot of cranes at work!)

[silu]

Thanks Black Peter. Your post is very informative and I will use it to further my research into MPG. The reason why I'm interested is that I used to work for Eckelt Glass in Austria briefly as a teenager and was very impressed how big their export market was and how technical actually the product was.

[karlos68]

doing a new tiled shower at home with glass sides , metro glass said 3 weeks before glass ready I don't know if that's normal but seems a long time to wait for glass so I guessing they must be busy

I use to fit frameless showers till about 12 years ago (gave it up as tough on back, annoying having business phone ring when lifting/concentrating and better coin elsewhere as was labour only for large companies and business grew).

Generally clients would be informed after measuring that we will be back in about a week, as the time lapse from ordering to receiving toughen glass with processing (ie holes drilled, flat polishing, cutouts, notches) is typically 3 to 5 working days.

3 weeks is a good sign Metro Auckland is pumping like Metro Hamilton bull.

[Blackrose]

I have some of these - it has been a tough up and down on this lot. Many were quite keen late last year as there was some talk from Wellington about a rental warrant of fitness, for rental properties including getting double glazing as a compulsory thing to have. Alas that talk has seemingly stalled because it's election year and property is becoming quite overheated.

Am I too optimistic that it will recover to around $2 a share?

Feel free to lol.

Cheers

[Beagle]

Maybe there is many years of the building boom left to come ?
Where are we going to house all these new immigrants ?
BNZ economists reckon there's presently one million Kiwi citizens living overseas.
I suspect a lot will want to come home in the years ahead with so much strife in so many parts of the world lately....this will surely exacerbate Auckland's problems.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11831599

I shudder to think what Auckland's traffic will be like in 5-10 years from now :eek2:
I guess all this mess is good for companies like this one.

[Blackrose]

We are probably due for a correction, but the main people that it will affect will be Chinese Investors that don't exactly vote in NZ elections. Mind you grumpy generation rent if provoked to vote, will throw it to a Labour/Greens/independent anyone one but National frame of mind.

Given that in Auckland, generally if some one spins out on spaghetti junction or the bridge, because it's raining which it does quite a bit which means over 500,000 people are inconvenienced on the way home. Yeah. Nasty.

So glass. Well the demand for housing will continue no matter what the credit market will or won't do. I presume this means the need for construction materials which is what this is. Blackpeter did point out the pros and cons of this company really well is there any other smoking gun type bits of information out there?

[bull....]

I use to fit frameless showers till about 12 years ago (gave it up as tough on back, annoying having business phone ring when lifting/concentrating and better coin elsewhere as was labour only for large companies and business grew).

Generally clients would be informed after measuring that we will be back in about a week, as the time lapse from ordering to receiving toughen glass with processing (ie holes drilled, flat polishing, cutouts, notches) is typically 3 to 5 working days.

3 weeks is a good sign Metro Auckland is pumping like Metro Hamilton bull.

Im looking into this. have today started some research on the company

[Sideshow Bob]

Competitors.....

http://www.stuff.co.nz/business/91448138/new-20m-manufacturing-investment-in-christchurch

[BlackPeter]

Competitors.....

http://www.stuff.co.nz/business/91448138/new-20m-manufacturing-investment-in-christchurch

I guess somebody must supply to the other odd 45% of the market ...

[bull....]

Competitors.....

http://www.stuff.co.nz/business/91448138/new-20m-manufacturing-investment-in-christchurch

Probably mainly only in Christchurch, anyway the Christchurch market is slowing down. All the action is in the NTH Island now.

[JeremyALD]

1.8 million in shares already traded today.

[Beagle]

1.8 million in shares already traded today.

You doing another small top-up BP :D

[BlackPeter]

You doing another small top-up BP :D

Not playing in that league ... and it sort of reached the absolute maximum allocation in my portfolio (this is two top ups after reaching the self imposed "normal" limit). Rules are there to be broken, but it shouldn't turn into a habit ... ;).

[bull....]

research suggests risks around productivity and execution and in being able to translate this into meaningful margin increase also she be right attitudes also slow down becoming evident.

[BlackPeter]

research suggests risks around productivity and execution and in being able to translate this into meaningful margin increase also she be right attitudes also slow down becoming evident.

You want to share with us the base of your "findings"?

[couta1]

You doing another small top-up BP :D He might need to get his cheque book out again as it's trying to break below $1.30, watch out for that broken glass BP. PS-The chart looks like a cliff fall followed by a serious rollercoaster. PPS-Put a bid on myself at $1.29, might as well take a wee rollercoaster trip just for the fun of it.

[Beagle]

He might need to get his cheque book out again as it's trying to break below $1.30, watch out for that broken glass BP. PS-The chart looks like a cliff fall followed by a serious rollercoaster. PPS-Put a bid on myself at $1.29, might as well take a wee rollercoaster trip just for the fun of it.

Maybe they have hit a bottom at $1.30 ? PE 11.5...BNZ reckon there's about 1 million Kiwi's presently living overseas. With the world security situation deteriorating by the day I can't see any let-up in the immigration rate of 71,000 per annum wanting to come to little ol safe New Zealand. All got to live somewhere. Maybe no end to the building boom in the foreseeable future ? If management can make a half decent effort to convert some of that building boom into bottom line results, (unlike FBU who seem to have systemic issues potentially going on for years with questions regarding all of their construction backlog previously won using systemically flawed bidding processes ?), then maybe this is the one to own instead of FBU ?

[Hoop]

He might need to get his cheque book out again as it's trying to break below $1.30, watch out for that broken glass BP. PS-The chart looks like a cliff fall followed by a serious rollercoaster. PPS-Put a bid on myself at $1.29, might as well take a wee rollercoaster trip just for the fun of it.

MPG is a grizzly type bear..If it breaks below 1.30 (Primary support) it will fall quickly to form a low (TA target price 1.10)..MPG being a bear says that without any TA buy signals there's a good chance of it breaking its 1.30 support, if not this time perhaps the next time......Couta.I fail to understand your mirror image investing style:confused:..its even doesn't fall into contrarian investing strategy.

MPG stock sudden fall is attracting some Contrarian Investors, but not enough yet to trigger buy signals...

Investment strategy says you don't trigger a buy just below a major support break (when others trigger a sell), you trigger a buy just above support (as what is happening now) with very tight stops just in case it breaks..

[couta1]

MPG is a grizzly type bear..If it breaks below 1.30 (Primary support) it will fall quickly to form a low (TA target price 1.10)..MPG being a bear says that without any TA buy signals there's a good chance of it breaking its 1.30 support, if not this time perhaps the next time......Couta.I fail to understand your mirror image investing style:confused:..its even doesn't fall into contrarian investing strategy.

MPG stock sudden fall is attracting some Contrarian Investors, but not enough yet to trigger buy signals...

Investment strategy says you don't trigger a buy just below a major support break (when others trigger a sell), you trigger a buy just above support (as what is happening now) with very tight stops just in case it breaks.. Was a bit of a humourous response to BP's enthusiastic loading up on MPG. I did have a bid on at $1.29 last Friday but that $1.30 seems to be providing quite a good support level at this point. From my viewpoint it would only be a small punt on the basis that it could give a 30-40c upside over the next 6 months. A bit like PPH aye Hoop, you can't win if your not in.:eek2:

[Hoop]

Was a bit of a humourous response to BP's enthusiastic loading up on MPG. I did have a bid on at $1.29 last Friday but that $1.30 seems to be providing quite a good support level at this point. From my viewpoint it would only be a small punt on the basis that it could give a 30-40c upside over the next 6 months. A bit like PPH aye Hoop, you can't win if your not in.:eek2:

Yeah Mate..VeryTrue :)......but

[karlos68]

I've been looking at this co for a while. Chart looks set for a reversal?


8801


Yup, appears so.

[JeremyALD]

Closed at 1.27. What do you guys have your stop loss as? I put mine in at $1.25. Had a little go around 1.30 but looks like it's heading lower, at least in the short term.

[percy]

He might need to get his cheque book out again as it's trying to break below $1.30, watch out for that broken glass BP. PS-The chart looks like a cliff fall followed by a serious rollercoaster. PPS-Put a bid on myself at $1.29, might as well take a wee rollercoaster trip just for the fun of it.

Did you buy 5,271,056 shares, off market today, at $1.25.?

[couta1]

Did you buy 5,271,056 shares, off market today, at $1.25.? Not guilty, I'm too busy catching other falling knives of the blue chip variety currently, namely Sum and Mel. My hands are suffering enough cuts without adding falling glass to the mix. PS-It is a tempting carrot though, along with PPH.

[Beagle]

I got talked into this pup by some guy with an XXL holding...kicking myself that I should know better and wait till the technical's showed a rebound...now licking my wounds because I'm underwater on this and licking my wounds on PPH as well...running out of saliva. I will stick with my standard stop loss of 15% and take the beating on the chin like a man if it comes as I thoroughly deserve it ! Never buy on a downtrend, EVER ! I will definitely not be doing a Couta1 and doubling down on this or PPH. When you're in a hole, STOP DIGGING ! and look for a ladder.
As BP pointed out their CAGR in sales has been very sound over the last few years but can they translate that into growth in EPS going forward, that's the question ! Speculative I'd say.
Only a 2% portfolio position for me so all up including the other speculative pup PPH less than 5%. Suppose every hound needs a couple of pups in his pouch to remind himself of what decent shares should look like. Disc: Grumpy hound.

[JeremyALD]

I got talked into this pup by some guy with an XXL holding...kicking myself that I should know better and wait till the technical's showed a rebound...now licking my wounds because I'm underwater on this and licking my wounds on PPH as well...running out of saliva. I will stick with my standard stop loss of 15% and take the beating on the chin like a man if it comes as I thoroughly deserve it ! Never buy on a downtrend, EVER ! I will definitely not be doing a Couta1 and doubling down on this or PPH. When you're in a hole, STOP DIGGING ! and look for a ladder.
As BP pointed out their CAGR in sales has been very sound over the last few years but can they translate that into growth in EPS going forward, that's the question ! Speculative I'd say.
Only a 2% portfolio position for me so all up including the other speculative pup PPH less than 5%. Suppose every hound needs a couple of pups in his pouch to remind himself of what decent shares should look like. Disc: Grumpy hound.

Yup we should of listened to Percy lol. They pay a good dividend so I'm considering holding and seeing how it goes over the next couple of years. Like you Roger I only had a smallish dab.

[couta1]

Relax guys, it's not as if you paid $2 for the stock, another 6 months and you both could be 30c in the blue. PS-Im feeling more grumpy about Sum's current share price direction, hard to comprehend why you would sell it to buy Oceania:confused::mad ;:. PPS-Buying in a down trend can be fun Roger, it's kinda like big game fishing if you choose the right stock.

[percy]

MGP are not alone.
This sector should have been enjoying boom times.
Yet FBU,STU,OIC, and MVN have been serial underperformers for the past few years.
It's different this time?...lol.

[JoeGrogan]

Closed at 1.27. What do you guys have your stop loss as? I put mine in at $1.25. Had a little go around 1.30 but looks like it's heading lower, at least in the short term.

I've got a stop loss of 1.24. However, this is my second time in, the first time was when it hit 1.30 a couple weeks ago i then sold at 1.35 because the rally seemed to be fizzing out. And then for some silly reason i decided to buy more today at 1.28 even though it broke the 1.30 support level. From a fundamental standpoint i'm happy to buy at this price, however, panic sellers could take the sp anywhere from here.


Not guilty, I'm too busy catching other falling knives of the blue chip variety currently, namely Sum and Mel. My hands are suffering enough cuts without adding falling glass to the mix. PS-It is a tempting carrot though, along with PPH.

Lol i'm currently busy catching falling knives with Mel and Sum too, also a bit of Met for good measure, should be an interesting few weeks:scared:.

[bull....]

Chart looks lousy, which matches my fundamental research conclusion

[BlackPeter]

I got talked into this pup by some guy with an XXL holding...kicking myself that I should know better and wait till the technical's showed a rebound...now licking my wounds because I'm underwater on this and licking my wounds on PPH as well...running out of saliva.

Hope you are not referring to me ;). I never talk people into buying shares ... only put the facts I knew about MPG on the table for everybody to see, and so I assume it was the facts speaking for themselves.

As far as I know - that facts have not changed ... i.e. I still see MPG (at this price) as a solid long term investment (or midterm in case the share price might in some months again get ahead of itself ...);

In my view a valid choice for somebody "hunting for value". Not so sure about "digging for bones" ... but this is probably just because I am not that deep into the canine psyche, though I understand that canines consider bones as treasure ...

They say the market is in the short term a voting machine and in the long term a weighing machine. Haven't found many people good in predicting votes (well, not me - I missed in correctly predicting the recent election disasters), but predicting weighing results I find easier.

I expect (in a months time or so) a 2017 result as per their Feb announcement (great revenue growth, small earnings drop) and I expect indications for a bumper FY 2018 - at least revenue-wise. If this happens, than I am pretty sure that the share price will look after itself.

What I don't know is whether they managed to get on top of their manufacturing trouble ... but hey, should we really assume that a New Zealand company is not able to learn from its early mistakes? What happened to Kiwi ingenuity?

Discl: holding and not too worried about the current SP jitter ... but obviously monitoring the news

DYOR;

[Beagle]

Relax guys, it's not as if you paid $2 for the stock, another 6 months and you both could be 30c in the blue. PS-Im feeling more grumpy about Sum's current share price direction, hard to comprehend why you would sell it to buy Oceania:confused::mad ;:. PPS-Buying in a down trend can be fun Roger, it's kinda like big game fishing if you choose the right stock.

Be careful where you troll your lures mate. Only go fishing for big game in companies that really are stupidly low in terms of their SP and where management and directors have earned the respect and trust of the market. SUM is one of those companies, this one is definitely NOT ! No way I'd double down on this puppy punt !

BP Your SWOT analysis was good, I only have myself to blame for breaking one of my own rules about buying in a downtrend. I know better and deserve a beating if one is coming.

[JoeGrogan]

https://www.nzx.com/companies/MPG/announcements/300187

NZ super bought more i see... interesting.

[Beagle]

https://www.nzx.com/companies/MPG/announcements/300187

NZ super bought more i see... interesting.

ACC and them known for their long term investing horizon. Buy a pup and hope it grows up into a well performing highly useful guide dog :)

[JoeGrogan]

ACC and them known for their long term investing horizon. Buy a pup and hope it grows up into a well performing highly useful guide dog :)

Seems logical. Do you know any examples of companies they have done this with in the past? i haven't really followed the NZSF over the years.

[Beagle]

Seems logical. Do you know any examples of companies they have done this with in the past? i haven't really followed the NZSF over the years.

I haven't really followed them much either mate but there's some useful information in their monthly updates, the latest of which is here https://www.nzsuperfund.co.nz/sites/default/files/documents-sys/March%202017%20Performance%20Report.pdf

[JoeGrogan]

I haven't really followed them much either mate but there's some useful information in their monthly updates, the latest of which is here https://www.nzsuperfund.co.nz/sites/default/files/documents-sys/March%202017%20Performance%20Report.pdf

Cheers for the info

[nocomment]

just want to say thanks for sharing your thoughts everyone. im kinda new to trading but i want to take it a bit more seriously now (sick of savings doing nothing in the bank) so interested in hearing everyones ideas. ive had fun dabbling in the past - good times with power company IPOs, not so good with fruit companies APF.

sounds like you guys do a lot of homework (which i understand is the sensible thing to do) but can i ask do you find the market is driven just as much by random rumours vs. solid financial data? is that frustrating or does that just add to the fun of it all?

[hardt]

just want to say thanks for sharing your thoughts everyone. im kinda new to trading but i want to take it a bit more seriously now (sick of savings doing nothing in the bank) so interested in hearing everyones ideas. ive had fun dabbling in the past - good times with power company IPOs, not so good with fruit companies APF.

sounds like you guys do a lot of homework (which i understand is the sensible thing to do) but can i ask do you find the market is driven just as much by random rumours vs. solid financial data? is that frustrating or does that just add to the fun of it all?

I was in the same boat as you late 2015 - read anything and everything out there, take a closer look at the underlying business rather than peering into the stocks performance/charts/price targets before you make a decision to take a piece of a company for yourself...

There is plenty of revenue growth to come leading up to 2020 for MPG... hoping management will handle their "inefficiencies" a little better in the near future.

MPG is worth a look for a long term investor, if you want exposure to the construction industry you may want to look at Steel and Tube as well... DYOR

[bull....]

Metro consistantly say they excel at customer service well heres a tip - currently when you want a quote for work it is sent to there head office and then quoted and sent back, maybe mpg could add a email reply ( thanks for contacting us we have received your query and will be in touch shortly ) instead of nothing and having to chase up whether email was actually received.

There not the only ones that lack at this simple customer service maybe its not there fault they do glass not I.T.

[JeremyALD]

For a company with a market cap of 235 million this has had simply huge volume going through in the last few months. Another 4 million in shares traded today. Holding steady around $1.27 which I think is encouraging.

[sharp]

For a company with a market cap of 235 million this has had simply huge volume going through in the last few months. Another 4 million in shares traded today. Holding steady around $1.27 which I think is encouraging.

I've been tracking this for weeks and have seen support at $1.28...

It's the big boys/girls getting in on MPG as you have no doubt noticed from the substantial holder notices.

[BlackPeter]

I've been tracking this for weeks and have see support at $1.28...

It's the big boys/girls getting in on MPG as you have no doubt noticed from the substantial holder notices.

I guess nobody can later on complain that they didn't had enough opportunities to get in around 130. Nice to see the support this morning building up and pushing up :); Obviously - the SP is ways below any relevant MA (i.e. the trend looks still terrible), i.e. people must trust their fundamental analysis to get in now, but that's an area the big boys typically are good at.

Discl: holding (lots) - mind all my confirmation bias:

[JoeGrogan]

Mmm the support has held up pretty well so far after looking pretty touch and go. However, i'm still skeptical, every time a push back happens a myriad of sellers flood the market.

Disc: still holding

[t.rexjr]

Mmm the support has held up pretty well so far after looking pretty touch and go. However, i'm still skeptical, every time a push back happens a myriad of sellers flood the market.

Disc: still holding

I've noted the fall back has been on very low volumes at the end of trade day after a steady but slow climb through the day. It deserves to stick, but will it...

[BlackPeter]

Within a +/- 10 cents band around the current SP (135) there are 4 times as many buyers than sellers. Anticipating a positive impact on the SP ...:cool:

[Beagle]

Prima facie it would appear the large volume seller(s) have finished or are near to finishing exiting their position(s) which if correct might signal we've passed the bottom, (which would be nice it that really is the case). Not a high conviction / high weighting holding for me but clinging on like a slightly sick terrier to a small bone in this one.

[sharp]

It appears that annual rsults are due out mid-May. I am anticipating revenue and profit growth (in line with the projected forecasts) - which would give a healthy bump to the SP.
What are your thoughts gents and ladies (and everyone in between)?

[percy]

It appears that annual rsults are due out mid-May. I am anticipating revenue and profit growth (in line with the projected forecasts) - which would give a health bump to the SP.
What are your thoughts gents and ladies (and everyone in between)?

Will be interesting.
I will wait until the result before looking at them [again].
Sector still scares me though.

[BlackPeter]

It appears that annual rsults are due out mid-May. I am anticipating revenue and profit growth (in line with the projected forecasts) - which would give a health bump to the SP.
What are your thoughts gents and ladies (and everyone in between)?

Same here ... expect results as per forecast (somewhere middle of the road) in combination with a quite healthy outlook for 2018. While last years Culverden / Kaikoura / Wellington Earthquake clearly put a dent into the number of building permits issued per month ... the overall trend is clearly pointing upwards and back to the long term trend line.

8817

In average it takes 9 months for any newly permitted house to be in need of windows. It is not rocket science, really ...

[sharp]

Same here ... expect results as per forecast (somewhere middle of the road) in combination with a quite healthy outlook for 2018. While last years Culverden / Kaikoura / Wellington Earthquake clearly put a dent into the number of building permits issued per month ... the overall trend is clearly pointing upwards and back to the long term trend line.

8817

In average it takes 9 months for any newly permitted house to be in need of windows. It is not rocket science, really ...



Sofitel's new Soho hotel on Commerce Street, Auckland, I see has its glazing going up after what appears to be close to couple years of demolition works.

Definite revenue 'lag' for whoever is doing the glazing for that building because it would be years between the consultation, design, building, installation and ultimately revenue for such a job. Hope it is Metro that is doing the works.

[BlackPeter]

Ending the day with 138, i.e. it managed to push through the MA30 and stay there. As well reaching "higher highs". Obviously still early days, but just nice to see another couple of indicators turning green ...

[JoeGrogan]

Ending the day with 138, i.e. it managed to push through the MA30 and stay there. As well reaching "higher highs". Obviously still early days, but just nice to see another couple of indicators turning green ...

Was very nice to see higher highs :t_up:

[hardt]

Interesting to find out if what fund provided the support... I don't think the spike came from retail investors.

[janner]

Will be interesting.
I will wait until the result before looking at them [again].
Sector still scares me though.


Hmmmm..

Disc. In.

[percy]

Hmmmm..

Disc. In.

Mmmmmmmmmmmmm,
May be another example, where in hindsight, you show better foresight than me.?
Pleased you did not mention WDT...............lol.

[couta1]

Will be interesting.
I will wait until the result before looking at them [again].
Sector still scares me though. I'm not scared Percy, so I'm in, I sniff value here unlike a lot of other stocks currently which are floating on inflated Air.

[RupertBear]

I'm not scared Percy, so I'm in, I sniff value here unlike a lot of other stocks currently which are floating on inflated Air.

Have been nibbling a wee few over the last week as well Couta :D

[couta1]

Have been nibbling a wee few over the last week as well Couta :D Good on ya RB, ACC are reputable positional traders so that's a good cue IMO.

[percy]

Result due tomorrow.
Will be interesting?

[BlackPeter]

Result due tomorrow.
Will be interesting?

I expect it to be somewhat uplifting as well ... ;) (but don't take my word for it). At least it appears there is no leaking this time - i.e. I expect they resolved their manufacturing issues (hard to hide these from staff and contractors) and don't see how the demand side could be bad.

Obviously - board and management could have bought some more (but they bought some from memory), but hey ...

Punters seem to be cautiously optimistic - SP stabilised.

Discl: hold (lots); Mind my confirmation bias and the endowment effect.

[BlackPeter]

I expect it to be somewhat uplifting as well ... ;) (but don't take my word for it). At least it appears there is no leaking this time - i.e. I expect they resolved their manufacturing issues (hard to hide these from staff and contractors) and don't see how the demand side could be bad.

Obviously - board and management could have bought some more (but they bought some from memory), but hey ...

Punters seem to be cautiously optimistic - SP stabilised.

Discl: hold (lots); Mind my confirmation bias and the endowment effect.

Nice little uptrend throughout the day. If the 138 holds tonight (or gets exceeded - did I hear 139?) it is now higher highs, higher lows and higher highs again. I'd see that as a positive omen come reporting day :).

[carrom74]

Nice little uptrend throughout the day. If the 138 holds tonight (or gets exceeded - did I hear 139?) it is now higher highs, higher lows and higher highs again. I'd see that as a positive omen come reporting day :).

Yes BP it is ay $1.39....Hope they touch or exceed their $20M guidance and give a decent forecast keeping in mind National's new house build policy. Fingers crossed...

[Snow Leopard]

Yes BP it is ay $1.39....Hope they touch or exceed their $20M guidance and give a decent forecast keeping in mind National's new house build policy. Fingers crossed...

That $1.39 will be toast if they don't!

Best Wishes
Paper Tiger

[hardt]

That $1.39 will be toast if they don't!

Best Wishes
Paper Tiger

They have been awfully quiet, hope to see them deliver on that solid growth forecast [ less weak eps ] ... no news is good news.

[percy]

I have read a couple of research reports on MPG.
Having not owned any, I am still trying to understand the business.
Hopefully I have read enough to understand tomorrow's result.

[janner]

I have read a couple of research reports on MPG.
Having not owned any, I am still trying to understand the business.
Hopefully I have read enough to understand tomorrow's result.

This one adds to my PM conundrum perc. I like it .

Disc. Minor holding .

[percy]

This one adds to my PM conundrum perc. I like it .

Disc. Minor holding .

You have been getting too many right lately to be ignored...lol.

[JeremyALD]

Solid result considering the current SP

Group revenue for the year to 31 March 2017, including the seven‐month contribution from AGG, rose 30% to$244.3 million from $188.0 million in the same period 12 months ago. Excluding AGG, Metro Glass’ New Zealandrevenue rose 14% to $213.8 million.Normalised EBITDA for the year rose 20% to $44.9 million from $37.5 million in the prior year. Normalised netprofit after tax (NPAT) rose 11% to $21.3 million from $19.3 million last year. Reflecting the impact of one‐offexpenses related to the acquisition of AGG and adjustments to tax expense for charges incurred in prior years,reported NPAT fell 6% to $19.4 million from $20.5 million last year.

[winner69]

And they'll grow earnings again in F18 ......probably >12%

https://www.nzx.com/files/attachments/258820.pdf

[hardt]

Very solid result, pretty pleased with the double digit growth all round and a solid dividend on it's way...

[winner69]

Current PE about 12

Building / construction related companies never really in favour so maybe priced about right.

So with earnings growth share price will be higher this time next, probably reflecting actual growth

But you never know it might even get back to 2 bucks plus again - not blue sky stuff, been there before

[winner69]

I would have left the slides showing H2 performance out of the presentation pack.

Anybody interested could have worked out that H2 normalised NPAT was DOWN 18% on last year ...hmm

Cash Flow for year pretty weak - increased working capital and pretty capital intensive business.

[winner69]

Business Desk headline

METROGLASS PROFIT DIPS ON AUSSIE EXPANSION COSTS, CAPEX LOOMS



Seems a fair assessment .....from an unbiased point of view

[bull....]

result matched what was expected , sounds like they still have issues converting margin out of there distribution centres and no figures given in guidance for next financial yr doesnt inspire confidence.

[bull....]

I would have left the slides showing H2 performance out of the presentation pack.

Anybody interested could have worked out that H2 normalised NPAT was DOWN 18% on last year ...hmm

Cash Flow for year pretty weak - increased working capital and pretty capital intensive business.

2nd half was poor alright maybe thats why they lacking confidence to give forward guidance.

[trader_jackson]

Ah yes... leave the NPAT and EPS decreases out of the bullet points, and have revenue as the first... number 1 sign things not being all so great...
Dividend payout creeping up to the 'maximum' while debt levels getting higher (although not yet at the concerning levels) and operating cash flows dramatically weaker (although at least they tried to explain 9.1m of the 10m decrease).
Also not much word on how things are 'really' going to be going forward (ie numbers), just lots of warm lovely words and pictures about glass and houses... number 2 sign things not being all so great

Forsyth were picking NPAT of 20.3 and a dividend of 8.2 cps (yes, after they announced the downgrade), so a miss on 2 key accounts, despite their forecasts already being downgraded

I suppose the PE takes account for this lacklustre, although expected result... still a little expensive in my view given no bottom line EPS growth... but no worries, this will all improve and back to $2 something... maybe it will be in the race with Arvida and Heartland winner69?

[JoeGrogan]

result matched what was expected , sounds like they still have issues converting margin out of there distribution centres and no figures given in guidance for next financial yr doesnt inspire confidence.

Yeah i think the market will need guidance figures before it even considers pushing the sp above 1.60 again, but i'll happily be wrong.

[hardt]

I would have left the slides showing H2 performance out of the presentation pack.

Anybody interested could have worked out that H2 normalised NPAT was DOWN 18% on last year ...hmm

Cash Flow for year pretty weak - increased working capital and pretty capital intensive business.

Sales growth of almost 40%, EBITDA growth of 13%... not sure how this is considered weak?

The EPS underperformance was put forth to the market back in Feb.

[Beagle]

A reasonable result and shares seem about fair value all things considered to me. They need to convert sales growth into profit growth for the market to rerate this one.
Disc I have a small stake, not a high conviction stock for me.

[percy]

I would have left the slides showing H2 performance out of the presentation pack.

Anybody interested could have worked out that H2 normalised NPAT was DOWN 18% on last year ...hmm

Cash Flow for year pretty weak - increased working capital and pretty capital intensive business.

Not for me yet,for the reasons you have given..

[sb9]

Bit of mixed bag for me, looks like a good result at the outset but not convincing for me to jump on board..

Just my 2c of opinion though...

[janner]

Not for me yet,for the reasons you have given..

I still like it . Not enough to increase my minor holding though.

One to keep an eye on ..

[BlackPeter]

OK - had a look through the results and joined the conference call. Reasonably happy with the outcome. Obviously - everybody can look at the numbers by themselves and interpret them, so just some comments on "softer points" I took out of that:


It sounds like that their past is pretty much described by providing a commodity where they only could compete on price. They are in the process of changing that and are offering more and more (for New Zealand) unique or at least added on features like Low E, the capability to produce larger and larger sheets and specialist glass for commercial buildings, .... . I think this is a quite encouraging trend, even if it means that they still have some large investments (and a new learning curve) in the pipeline (another big change over Christmas 2017).
Despite being in the presentation somewhat vague about their "developing businesses" it sounds like they expect all of them to move this FY into the black numbers
Their Australian acquisition is going well ...
They realise that their communication with shareholders is somewhat patchy and are working on improving it. They expect to get something more tangible out of the investor days planned for July.
positive outlook for FY2018, but the real return of new investment should come in FY2019 and beyond;


Nigel came again across as a competent non-B/S CEO. While he certainly has still some things to learn (who has not?), I don't see a reason not to trust him and prefer (some) uncertainty over made up targets which they afterwards would not keep anyway.

Quite happy with my decision to buy some more around 130 and happy to hold, though still with my overall holding in the red.

[percy]

I still like it . Not enough to increase my minor holding though.

One to keep an eye on ..

Agreed...............

[Blackrose]

I got these. I'm glad to see a bit of growth and the Aussy purchase is sound as Australia is going through "Hard Times" at the moment. But the demand for construction materials won't change that much as there will the ongoing demand for glass products for shiny new products.

I'm content with this purchase even though it's slumped a bit.

[JBmurc]

Looking to park some funds over the next few months MPG is one NZX share I'm looking at ....T/A wise seems to be at a Major double bottom support levels ... 4c divi coming up .... strong construction levels here in NZ >> looking like a possible ST trade ....

[BlackPeter]

Looking to park some funds over the next few months MPG is one NZX share I'm looking at ....T/A wise seems to be at a Major double bottom support levels ... 4c divi coming up .... strong construction levels here in NZ >> looking like a possible ST trade ....

If you've got time until November than I'd say it is a reasonable expectation for the SP to rise. They have traditionally a very good first HY and I don't think this time will be different. If you buy before July 7 (easy to remember - IRD day) than you get as well the divvie. Hey, its just 4 cents, but better than just a warm handshake ...

[JBmurc]

If you've got time until November than I'd say it is a reasonable expectation for the SP to rise. They have traditionally a very good first HY and I don't think this time will be different. If you buy before July 7 (easy to remember - IRD day) than you get as well the divvie. Hey, its just 4 cents, but better than just a warm handshake ...

Yes ...not as long as NOV but more so late OCT for GST payment some 68k thinking ....MVN - MPG ...

[BlackPeter]

Yes ...not as long as NOV but more so late OCT for GST payment some 68k thinking ....MVN - MPG ...

Phh - not sure I would park money for the taxman in shares ... but yes, based on history they should go up sometimes between August and October, well - they did in the past and I see them at current as quite undervalued.

Just hope for somebody leaking the good news prior to HY results in time for your payment ;).

No view on MVN ...

[JBmurc]

Yes is a risk of the SP moving south and may well park the funds into savings account and get couple hundred $$$ after TAX ....can always pay GST from other funds if I have too ....

[bull....]

share price still consolidating at lows i reckon nothing in report to inspire confidence

[BlackPeter]

share price still consolidating at lows i reckon nothing in report to inspire confidence

You reckon? You mean you rely on the market reading the reports for you - otherwise you would know, wouldn't you?

[bull....]

You reckon? You mean you rely on the market reading the reports for you - otherwise you would know, wouldn't you?

the technicals simply confirming the fundamentals, and my research which sugested nothing of interest here.
Property market is slowing down a little which is healthy long term.

Also there quoting systems are dreadful - ring a local branch ask for a quote wait while your request is sent to head office, ring local branch for update hold on ill ring head office - wait wait ring again oh yes we received quote back from head office such time wasting.

[BlackPeter]

...

Property market is slowing down a little which is healthy long term.

So - where do you think all the "unhoused" New Zealanders will go? Never heard about the Auckland housing crisis? Maybe you should do some more research ... :p

[bull....]

So - where do you think all the "unhoused" New Zealanders will go? Never heard about the Auckland housing crisis? Maybe you should do some more research ... :p

you didnt notice latest building consents? second mth of declines and auckland down which by the way auckland will never keep up or catch up unless they totally eject all immigrants - maybe they could send them all to your town? hear housing market pretty slow down there.

[BlackPeter]

Immigrants ... just bring it on. Heard this morning in National Radio that we consider to outsource major infrastructure opportunities to Chinese companies because we don't have enough skilled workforce. So much about the benefits of limiting immigration.

building consents: last time I looked at the mid and long term trend it went nicely upwards. Not everybody is investing on a monthly stop and go basis ... :p

8870

[winner69]

Immigrants ... just bring it on. Heard this morning in National Radio that we consider to outsource major infrastructure opportunities to Chinese companies because we don't have enough skilled workforce. So much about the benefits of limiting immigration.

building consents: last time I looked at the mid and long term trend it went nicely upwards. Not everybody is investing on a monthly stop and go basis ... :p

8870

Nice chart

Looks like a bit of a downtrend since a year ago?

And showing charts with only half a cycle is dangerous ....can lead to wrong conclusions

[t.rexjr]

8870

Can you show it back to 2006?

[winner69]

Can you show it back to 2006?


Going back to 2001 a better starting point ......to see what the building / economic cycles look like

Current cycle has peaked - even with this perceived housing shortage

[BlackPeter]

Nice chart

Looks like a bit of a downtrend since a year ago?

And showing charts with only half a cycle is dangerous ....can lead to wrong conclusions

fair enough - here is a 10 year window (i.e. including GFC):

8871

Question is - are we at the top of the building cycle, at the top of the unaffordable property cycle or just on the way upwards?

I think that our building industry was focussing (profit driven) on building too many of the dear (and high margin) houses. We probably move towards an oversupply of these which explains the stuttering of the property market. Hopefully, though we don't decide to leave the people sleeping currently in cars, garages and overcrwoded houses in the cold - and start to build more affordable accommodation (i.e. high rises / apartment buildings).

These are cheaper (per unit) but need windows as well.

[t.rexjr]

fair enough - here is a 10 year window (i.e. including GFC):

8871

Question is - are we at the top of the building cycle, at the top of the unaffordable property cycle or just on the way upwards?

I think that our building industry was focussing (profit driven) on building too many of the dear (and high margin) houses. We probably move towards an oversupply of these which explains the stuttering of the property market. Hopefully, though we don't decide to leave the people sleeping currently in cars, garages and overcrwoded houses in the cold - and start to build more affordable accommodation (i.e. high rises / apartment buildings).

These are cheaper (per unit) but need windows as well.

It's an interesting chart. It's my experience that the industry struggles once the consent rate gets toward 2500. Above 2500 is unsustainable. Given the lag between consent and production that last peak would have gone through Metro end of H2 beginning of this H1. H2 should have been smashing it!?

The last dip pretty much coincided with me going 'f* it, I'm sitting on the beach for a month', beer in hand and phone off...

[BlackPeter]

It's an interesting chart. It's my experience that the industry struggles once the consent rate gets toward 2500. Above 2500 is unsustainable. Given the lag between consent and production that last peak would have gone through Metro end of H2 beginning of this H1. H2 should have been smashing it!?

The last dip pretty much coincided with me going 'f* it, I'm sitting on the beach for a month', beer in hand and phone off...

Your experience seems to be confirmed by the chart: only short spikes (in 2007/2008 and 2016/2017) reaching above the 2500 per month. Probably a question for a different thread, but it sort of feels sad if the building industry is not capable to grow with the economy, the demand and the population - something feels wrong here. Nearly 10 years on and they didn't increase their capacity? Lack of planning? Lack of initiative? Lack of rationalisation?

Re H2 smasher - yes, demand for MPG was huge (as demonstrated by their revenue growth), only problem for them was that they didn't knew how to play with all the new toys, and the introduction of three shifts prior to Christmas had its teething problems as well. So - yes, they had the demand (and delivered as well), but the margin suffered.

I am so far cautiously optimistic, they learned from this experience (but time will tell).

Enjoy your beer ... :)

[winner69]

Yes once the number of consents gets over 30,000 annually the industry struggles but that hasn't been the only raeson why the building cycle peaks about this level

I'm an advocate of looking at annual rate of change of most economic indicators to give a good feel for where things are heading into the future

For what's it worth here is a chart of the annual change in residential building consents (floor area). The forecast line is my modelling of where the numbers might head based on several factors that impact the housing market (interest rates, bank lending constraints, government/council policies etc etc)

Even though the forecast shows growth in consents heading into negative territory the quantum of consents is unlikely to fall below 28,000 in the next year or so - and that is above the long term average.

This is the MPG thread. Housing activity will keep them pretty busy but I wouldn't bank on a decent increase in the number of houses being built to drive growth.

One good thing MPG have recognised and doing something about is that you can't be under resourced in the upper North Island where the biggest chunk of the market is. But bear in mind the Auckland economy is often at odds to the rest of the country and subject to the same boomn bust cycles but Auckland bust cycles often are deeper

[t.rexjr]

Yes once the number of consents gets over 30,000 annually the industry struggles but that hasn't been the only raeson why the building cycle peaks about this level

I'm an advocate of looking at annual rate of change of most economic indicators to give a good feel for where things are heading into the future

For what's it worth here is a chart of the annual change in residential building consents (floor area). The forecast line is my modelling of where the numbers might head based on several factors that impact the housing market (interest rates, bank lending constraints, government/council policies etc etc)

Even though the forecast shows growth in consents heading into negative territory the quantum of consents is unlikely to fall below 28,000 in the next year or so - and that is above the long term average.

This is the MPG thread. Housing activity will keep them pretty busy but I wouldn't bank on a decent increase in the number of houses being built to drive growth.

One good thing MPG have recognised and doing something about is that you can't be under resourced in the upper North Island where the biggest chunk of the market is. But bear in mind the Auckland economy is often at odds to the rest of the country and subject to the same boomn bust cycles but Auckland bust cycles often are deeper

Wow that chart is SUPER! I have noticed trends related to floor area, but have never had an incling that there would be statistics to back it up!

[winner69]

Wow that chart is SUPER! I have noticed trends related to floor area, but have never had an incling that there would be statistics to back it up!

Sort of allows for more stuff (windows etc) going into bigger dwellings than smaller dwellings .....and if apartments/units (smaller average size) have above or below % of total consents (like auckland apartment boom mid 2000's)

[winner69]

High rises / apartments / multi-unit require require less glass per unit than stand alone houses

Careful when extrapolating consent numbers into MPG performance if the increase iscduevtonthe above.

As an aside little incentive for the industry to build cheap houses.

[t.rexjr]

less glass but likely to be toughened/safety/ laminated glass so a premium product

[winner69]

less glass but likely to be toughened/safety/ laminated glass so a premium product

.........in the more competitive and price driven part of the market

[Meextr]

Less window glass but more for balconies which is high spec product