Some of businesses acquired are very very cyclical though
Bear in mind they are operating also in markets overseas where travel is not possible to, so reliant on teams on the ground there already
Interesting the Milmeq acquisition - low cost - high volume - low margin
The balance sheet shows signs of forward projects heavily funded upfront by customers - see the contract liabilities
This has become more apparent over recent years
H&C - a $1-2 mill acquisition seems to be fuelling much of T/o & growth, but beware that operation is cyclical and has it's good & bad years, and has been known to be very quiet as well -- factor in that the operation being major money spinner for MHM - Travel limitations under Covid-19 & what does that mean ?
The Dairy an other companies don't do major Capital jobs every year.. What will any form of local or global downturn do for MHM Order Books ? The Milmeq acquisition allowed entry into Freezing Co's - but there too they are surrounded by other suppliers .. whether the bits they acquired as a further 'Bolt- On' was unwanted by others in the Sector - who knows, but it was certainly not expensive to add to the MGl stable. ($50K + whatever else ?)
Some may buy on reimaged Company name - but the former business units are not all that exciting & risk exists with newer ones that produce margin (now anchored on average around 35% ave GP - but that has been higher previously)
Trying to make the current bundle of past few years acquisitions & bolt-ons even look remotely sexy now with the same old (roughly $1 mil or less Surplus) without doing further to actually make things a bit more sexy than an Automation Machine Maker & Freezing Works Servicing Outfit - seems tough ask .. what has really changed ? (aside from rebranding & rekitting at a large cost)
I don't fancy chances of a dividend any time soon from MHM & furthermore the kind of miraculous large turn around spin from the Board seems just that - Spin and nothing more .. put a $5 - $10 mil profit on the table - I'd think differently, but I don't see that happening anytime soon from MHM with sub $5 mill net shareholder funds, in the businesses & sectors they are in, in current times & suspect possibly limited future growth possibilities..
Past history suggests over the long & chequered history only in very few years has a dividend been paid - starting way back in days of the listed Broadway Industries from memory.
In recent years, major shareholder loans in have been capitalised into addition shareholding stakes, with Loss of most previously accumulated tax losses, there are few if any Imputation credits, and like some other listed companies - MGL has been no different in using borrowed funds for larger new acquisitions in earlier attempted reincarnations / reimaging, only to have to have these not turn out well , then reformulated into additional shareholder injection / debt-share swaps or variants of this sort of thing.. (as was seen with STU)
At the end of the day given the choice of either MHM (MGL) or STU, I know which I would probably lean towards, if forced to choose..
Discl: Holder MGL & STU