MPG - Metro Glass

[Beagle]

Metro NZ sales F18 were $213m with EBIT of $29m. Their EBIT margin of 14% would be rarely bettered by any industry participants globally.

Biggest competitor Viridian sales in same period $96m with EBIT of $0.9m. Such performance (here and in Australia)/has seen CSR undertake a strategic review of the Viridian business ....code for its for sale to anybody who may want it (and Metro confirmed this the other day)

Viridian with the support of CSR couldn’t hack it in NZ — Metro’s market position and operations just too much for them

Metro as a business not the dog some think — they have the resilience to do continue to do well into the future even as a new entrant comes into the market (maybe replacing that other one which might not survive in the future)

But as Metro is listed I reckon that fund managers and instos being the impatient and greedy lot they are will see Metro going private again.

You've always had a soft spot for mangy mutts nobody else wants.

[winner69]

Yes a salient reminder. Bad management will wreck a good company. I frankly couldn't care less what the theoretical future demand side of the equation is, these guys won't make a big quid out of it that much is completely obvious. The fact that the main two people spinning the corporate B.S, (the chairman and Rigby) are gone speaks for itself. Whether the new crew are any better remains to be seen but the downtrend speaks for itself and I for one won't be risking slicing open my paw pads again catching this falling knife.

Good companies spend their time making good results, poor companies spend their time dreaming up excuses. If shareholders had a CEO that actually knew how to run the company as opposed to having to hire outside consultants to tell him how shareholders might have some sort of chance....but they're in a steep learning curve remember, (after being in business for 40 years+) so we should forgive them and allow them even more latitude lol

Recent management has not ‘wrecked’ Metro, they are still producing pretty solid results (even achieving world class margins). While management has been doing the day to day stuff pretty well the previous owners and then by new directors have been touting Metro for something it never was. Sucked in all those foolish ‘investors’ who were seduced by glossy brochures and hollow promises. That’s why it seen as ‘wrecked’ and that’s not the fault of day to day managers, and I feel sorry for them.

That last paragraph has a bit of emotional attached to it. Business often hire outside consultants to review processes - mostly you never hear about them. The directors made a bid deal if this to appease the grumpy fund managers / instos and to show they were ‘doing something’. I gather that the consultants only recommended minor changes - they didn’t tell Metro ‘how to run the company’ as you put it Beagle ..it was actually working quite well.

It’s a bit sad that private equity and the subsequent directors have driven the company Metro to where it is today....making all these uptotally unrealistic promises that were never going to be achieved has only led to pissed off shareholders ...to some extent they can only blame themselves for being seduced in the first place.

[winner69]

You've always had a soft spot for mangy mutts nobody else wants.

Metro not a mangy mutt ...could call it a well performed purebred .....it’s just it’s had bad owners who have not treated it well.

[winner69]

Been that way since the 1950s.
Different this time.?

It’s been boom and bust since the 1950s

Outlook for the next few years looking pretty good .....probably at least 35,000 odd dwellings to be built annually in next few years and that’s not really counting any of Phil’s outrageous ambitions. Non residential should be pretty good as well ...plenty of hotels, hospitals being built.

That 35,000 odd is compared to current activity of 32,000 and a low of 15,000 not that long ago and long term average of about 25,000

[percy]

The painter who did the paint work in our new house had to come and do a couple of touchs, up a couple of weeks ago.
He said they were short of work,as are most tradies in ChCh.

[Beagle]

Metro not a mangy mutt ...could call it a well performed purebred .....it’s just it’s had bad owners who have not treated it well.

Going back to when it was announced the new CEO was being appointed, most on here are underwhelmed with the credentials he brings to the job.
New leader any better than your mate Rigby ? P.S. Doesn't matter who this dog's owners are if the trainer is hopeless !
Bad former owners that dressed up tough old mutton as fresh spring lamb !

[bullfrog]

Recent management has not ‘wrecked’ Metro, they are still producing pretty solid results (even achieving world class margins). While management has been doing the day to day stuff pretty well the previous owners and then by new directors have been touting Metro for something it never was. Sucked in all those foolish ‘investors’ who were seduced by glossy brochures and hollow promises. That’s why it seen as ‘wrecked’ and that’s not the fault of day to day managers, and I feel sorry for them.

That last paragraph has a bit of emotional attached to it. Business often hire outside consultants to review processes - mostly you never hear about them. The directors made a bid deal if this to appease the grumpy fund managers / instos and to show they were ‘doing something’. I gather that the consultants only recommended minor changes - they didn’t tell Metro ‘how to run the company’ as you put it Beagle ..it was actually working quite well.

It’s a bit sad that private equity and the subsequent directors have driven the company Metro to where it is today....making all these uptotally unrealistic promises that were never going to be achieved has only led to pissed off shareholders ...to some extent they can only blame themselves for being seduced in the first place.

Well said. Disappointing SP but business model still rings true for me.

[winner69]

Going back to when it was announced the new CEO was being appointed, most on here are underwhelmed with the credentials he brings to the job.
New leader any better than your mate Rigby ? P.S. Doesn't matter who this dog's owners are if the trainer is hopeless !
Bad former owners that dressed up tough old mutton as fresh spring lamb !

More like rump steak dressed up as Waygu

[Beagle]

More like rump steak dressed up as Waygu

Guess we find out if the rump steak is as tough as old boots and inedible or otherwise tomorrow morning. They've had all last week and this weekend to work on their latest excuses PE looks as cheap as yesterday's cold chips, I'll give you that, but what of future earnings ? Might as well run the ruler (meat tenderizer) over it tomorrow morning...

[Baa_Baa]

The industry demand profile is massive for the next 10+ years, way larger than being able to be serviced by solely local companies .......so true baa_baa, let us not forget

The National Construction Industry Pipeline Report 2018 gives some insights. I think it is conservative.

Been that way since the 1950s. Different this time.?

Increasing willingness of the government especially to partner/alliance with private companies and foreign companies to resource and even to fund large build programmes is an evolution from self-reliance on local companies that cannot scale to meet the demand. It is good for NZ companies that are running at high capacity delivery, amidst the pie growing, presenting opportunity to grow a share of that pie.

Reading the flea ridden mangy mutts and mutton viewpoints is sobering. I guess it remains to be seen whether Metro continue to survive and trade profitably as they've done in the past. No doubt the SP is sick and has been for ages, but I think the recent reaction to a new competitor sometime in 2019 is overdone. I'm not buying until there is a clear reversal, but it's on the watchlist.