MPG - Metro Glass

[Rawz]

They usually say follow the smart money but not sure i could with MPG. Too much of a basket case.

[percy]

They usually say follow the smart money but not sure i could with MPG. Too much of a basket case.

Warren Buffett. One of his better-known aphorisms reads as follows: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

[BlackPeter]

Warren Buffett. One of his better-known aphorisms reads as follows: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

True ... but on the the hand - this is a business with (I think still) more than 50% of the NZ housing market. They have the factories, the sales network, the logistical network and all the connections. People need their products. Their manufacturing process requires some sophisticated equipment, but not more than other manufacturers of building products and they invested over the recent decade a lot into automation.

It is not rocket science to make money with selling building products in an unprecedented building boom - even companies like Placemakers (FBU) could do it during the last building boom (and keep the mother alive).

I am sure it is not just doable, but it should not even be hard to turn this ship around. Whether the current team is able to do that I don't know, but I don't think either that they are known for a reputation for brilliance.

Who knows - maybe FBU might be looking at some stage again for expanding their portfolio? It would e a fit ... and the current FBU CEO seems to have done some things right.

[Leemsip]

Just reviewed their november report.

Profit impacted by lower govt handouts, lower gross profit in Oz and NZ, less revenue.

No mitigating factors really. Debt reduced a couple of mill, but still high.

Not sure what there is to turn around here.... govt handouts not coming back, lower GP seems likely to continue. Building boom probably flat or declining as we head into higher interest rates and the base effect is pretty big (2021 was a decent year).

If this was half the price I might have a speculative nudge again..... This doesnt look like its going to see the glory days of $15-20m FCF again.......

Ill hold out for 25c SP

[Leemsip]

Rawz. You were my partner in crime last time at 25c... What you making of the big lad buying in at 37c? Got a target price for a buy?

[Rawz]

Rawz. You were my partner in crime last time at 25c... What you making of the big lad buying in at 37c? Got a target price for a buy?

We had some great gains!! Back then thou there was a glimmer of hope that Aussie was coming right, debt was falling rapidly and we were about to get a dividend.

But then in typical MPG fashion it started to go backwards again with Aussie going backwards, sales falling and margins falling. I dont have a target price. I would invest again if i saw a similar glimmer of hope as before.. but would be ready to bail if it started to go backwards again.

Remember P Masfen is a big boy. He hasnt helped MPG. New big boy on the block might be able to? Maybe not. Percy's WB quote rings true in this situation i think

[Sideshow Bob]

FY22 Guidance and Q4 outlook - NZX, New Zealand’s Exchange

FY22 guidance and Q4 outlook

In November 2021 Metro Performance Glass (NZX.MPG, ASX.MPP,Metroglass) released its interim results and undertook to provide a further update in February 2022. Today, Metroglass provides an outlook for Q4 and issues guidance on its anticipated results for the FY22 year, which are due to be released on the 20th of May 2022.

For the financial year ending 31 March 2022 Metroglass expects to achieve Group EBIT in the range of $6.0m to $7.0m vs. $17.9m in FY21. Net debt is expected to be circa. $53m which is a $5m increase year on year, driven by higher safety stock levels for imported glass and the capital investment made within the financial year to improve future production capability, quality, and capacity.

Performance in Q4 is expected to be ahead of the prior comparable period driven primarily by an improved financial performance from AGG. Metroglass remains focused on managing the impacts of Covid-19 and in particular the more recent Omicron outbreak in New Zealand and Australia with the associated disruptions to the industry supply chains.

Metroglass is also focused on improving profitability of the New Zealand and Australian businesses with recent price increases expected to flow through into FY23. Further increases may be required if inflationary cost pressures continue to develop.

This guidance is provided on the basis that there are no further significant Covid-19 related impacts in New Zealand or Australia before year end.
/Ends

[Leemsip]

ooof. Horrible update.
Back to 20-25c with you

[Leemsip]

EBIT of $6m. Likely interest expense $6m ish.
So breakeven..... and increasing debt. No growth.

What is this company even worth?

[BlackPeter]

EBIT of $6m. Likely interest expense $6m ish.
So breakeven..... and increasing debt. No growth.

What is this company even worth?

Actually - The EBIT range they are now advising is not much worse than the EBIT forecast the analysts worked with anyway (7.6m vs 6m ... 7m - i.e. no big surprises) ...

Sure - some punters sold this morning, but I think the control of the brain over the nervous sell finger started already setting in by most market participants. I'd expect this update will be (in the medium turn) more or less a non event.

How do you establish the worth of a company? Market typically looks at more than one years earnings ...