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/n...ectid=11285704
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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/n...ectid=11285704
Where's the growth?
A company in trouble, bought cheap by private equity, financially engineered now to sell into a strong market?
Hopefully they've learnt from the Hirepool debacle and come up with a reasonable offering
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.
Gets a mention in today's Chalkie column.
http://www.stuff.co.nz/business/opin...-conflict-soup
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
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.
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...
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
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/BU140...70-sources.htm
Disc: not investing
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.
I see them having strong growth during FY 15, 16 and 17 but flattening off and possibly even negative growth post Chch rebuild.
Now, there's a surprise. MetroGlass issue oversubscribed!
http://www.stuff.co.nz/business/indu...day:dailybrief
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
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?
Anybody having a go with Metro this week?
Wonder how much it cost metro to spam the NZX website with their advertising when you open it?
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
Are you in Winner?
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
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
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.
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
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.
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
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.
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
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?
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
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?
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.
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-PERFO...972/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.
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.
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
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 ??
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-med...ues-rapid-rise
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
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!
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.
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.
Good recovery today
Maybe there has been one desperate shareholder who wanted/need out in a hurry
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
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".
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
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
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
Still trucking along quite nicely is MPG
Quite a way up from the mid 130s
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.
Nice little uptrend and all quiet on the Western front.
Continuing in the right direction prior to the results announcement. Is Metroglass too boring to talk about?
Reasonable size acquisition in Australia
Good move
https://www.nzx.com/companies/MPG/announcements/287113
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.
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
Attachment 8379
Oh dear........looking like heading down:(
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)
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;
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.
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.
Talk about a share price being punished!
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.
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-PERFO...72/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.
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.
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
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.
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?
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/3...d-guidancehtml
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.
That's another "Yup"
Attachment 8650
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.