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  1. #1
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    Default Mercer Group Ltd - MGL

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

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

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

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

  2. #2
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    The stock definitely has potential. From the annoucement...
    "the deal should result in Mercer receiving an average royalty of at least 5%"
    and
    "Mercer estimates the North American sterilization market, including consumables, to be US$1.8 billion per annum"

  3. #3
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    Did anybody go to the AGM? Would have expected the AGM Presentation to be released by now. This would ensure all participants were equally informed.

    Pity. Another cross for the company.

  4. #4
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    Quote Originally Posted by noodles View Post
    Did anybody go to the AGM? Would have expected the AGM Presentation to be released by now. This would ensure all participants were equally informed.

    Pity. Another cross for the company.
    They must have heard me curse. The presentation is released.

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

  5. #5
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    Yes, unclear whether the presentation triggered the sell, but a possible. $3m headroom on the banking facility, but then they say looking at funding options to commercialise S-clave ($2m). So suggestion there is both a cap raise AND that they may be soaking up working capital in the rest of the business.

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

  6. #6
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    Quote Originally Posted by Lizard View Post
    Yes, unclear whether the presentation triggered the sell, but a possible. $3m headroom on the banking facility, but then they say looking at funding options to commercialise S-clave ($2m). So suggestion there is both a cap raise AND that they may be soaking up working capital in the rest of the business.

    Good and bad. Still think it is watchlist material - and would be good for it to get back to 10-14cps...
    One of the more interesting ones IMHO Liz..

    But there are so many :-)

  7. #7
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    Quote Originally Posted by noodles View Post
    The stock definitely has potential. From the annoucement...
    "the deal should result in Mercer receiving an average royalty of at least 5%"
    and
    "Mercer estimates the North American sterilization market, including consumables, to be US$1.8 billion per annum"
    To much enthusiasm noodles.. Down boy.. Down !!..

  8. #8
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    Quote Originally Posted by janner View Post
    To much enthusiasm noodles.. Down boy.. Down !!..
    Agreed. I will wait for it to become reasonably priced on it's current earnings. Then s-clave can be a free upside option.

  9. #9
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    Quote Originally Posted by Lizard View Post
    New management team in 2011 seem to be pulling things back on track. Combined with strong dairy industry demand (new production lines), potential residential building demand increase, growth from acquisitions (Titan Slicers) and launch of new products (e.g. today's announcement - previously foreshadowed - of North American licence agreement for the S-Clave technology). All starts to look like a baby version of SCT.

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

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

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

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

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

    SNOOPY

    discl: hold SCT and it is analyses like these that make me realize what a good investment, in relative terms, it is
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  10. #10
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    WOW approx. 11% changed hands today, whose selling and WHATSUP ?

  11. #11
    percy
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    Maybe the Hubbard Churcher holding?
    16cents per share.$5mil for Creditors?
    Last edited by percy; 21-01-2014 at 05:19 PM.

  12. #12
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    CEO sold $1 million of shares to take up re his 7c options. The rest, who knows,but good to see int hotting up. I hold.

  13. #13
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    Quote Originally Posted by whatsup View Post
    WOW approx. 11% changed hands today, whose selling and WHATSUP ?
    Well done percy, Hubbard selling and Milford buying,

  14. #14
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    Quote Originally Posted by whatsup View Post
    WOW approx. 11% changed hands today, whose selling and WHATSUP ?
    Well done percy, Hubbard selling and Milford buying,

  15. #15
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    Hubbard sold down to 0%, and Milford snapped it up. Given Milford's track record, could this be a buy worth looking into?

  16. #16
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    Hubbard sold down to zero from 11.3% , Milford have bought re 5% atm. Other buyers piling in since.

  17. #17
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    Quote Originally Posted by kyanar View Post
    Hubbard sold down to 0%, and Milford snapped it up. Given Milford's track record, could this be a buy worth looking into?
    It is in my comp pick !!..

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

    Disc.. Holding. DYOR.

  18. #18
    percy
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    Quote Originally Posted by janner View Post
    It is in my comp pick !!..

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

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

  19. #19
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    Quote Originally Posted by percy View Post
    Bet you wished you had brought at 16cents too.!!!
    At today's closing price of 25cents you would be a very happy chappy.! lol.
    Percy.. I am a very happy chappie with all of my holdings since 01/01/2014..

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

    DYOR !!
    Last edited by janner; 22-01-2014 at 07:35 PM. Reason: addition

  20. #20
    percy
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    Mr.Rodger Shepherd exercises options [free?] to buy shares at 7 cents.
    Milford Fund purchases shares at 16cents.
    Percy decides he will not pay 25cents.!

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