MPG - Metro Glass

[karlos68]

Bit off a loss as to why the drop in Share Price.
I am a Glass Merchant and deal with Metro, have viewed charts and note highs and lows, seems odd as past year has been pumping, .......been talking to other various tradies lately and all have said phone calls have cooled abit but still busy, meaning now that workloads are manageable, thou have not chatted to Metro as to workloads but I assist and my impression is they are still pumping.

[winner69]

Too right Mr BG is upset
He hates getting misled (read dorked).

But why would anyone invest in an IPO from a PE seller?

NZ market is such a soft (read dumb) touch .

But mr G should stop whinging and moaning when things don't quite work out. It's called risk. Judgement is intuitive. It's not a given.

Good word is dorked

Amazing how a glossy prospectus and subsequent cool looking presentations can make things look so good

Many got dorked - time for the vultures to come out and play - might be ok from here seeing its probably reached what some call fair value.

[percy]

Good word is dorked

Amazing how a glossy prospectus and subsequent cool looking presentations can make things look so good

Many got dorked - time for the vultures to come out and play - might be ok from here seeing its probably reached what some call fair value.

$1.10 to $1.13 may be a good price to pay for a fair company,however I prefer to pay a fair price for a good company.!!..lol.
No fancy words or pictures,will disguise the fact MPG is an underperformer, in a sector full of serial underperformers.

[Hoop]

".....in a sector full of serial underperformers."============= Dorkland

[sideline]

$1.10 to $1.13 may be a good price to pay for a fair company,however I prefer to pay a fair price for a good company.!!..lol.
No fancy words or pictures,will disguise the fact MPG is an underperformer, in a sector full of serial underperformers.

Downgrades are one reason for the drop yesterday - I see Forbar did one.

The other issue coming up is the S&P index rebalance on 15 Sep. MPG's stay in NZ50 was borderline last time -
does anyone expect them to stay in the index this time around??
Some of the bigger transactions could be index fund managers adjusting their portfolios before the announcement is out?!?

[BlackPeter]

Interesting - just tried to correlate the MPG charts with some other companies from the building industry .... and FBU seems to be by ways the best fit:

Attachment 9107
blue line - MPG;
orange line - FBU;

I wouldn't have thought that both companies have that much similarities ... so maybe it is more the general feeling (or mood)?

Other questions: is this last spike down really a "MPG special", something very temporary - or is FBU likely to follow?

Looking at the RSI (not in the picture) would I expect MPG to bounce back next week. Question is just - by how much?

[Beagle]

Interesting post and comparitive chart BP - Interesting comparing their relative SP performances. I would opine that the management issues at FBU are FAR worse than at MPG but fund managers seem to love FBU and believe their talk of recovery, (for reasons best known to themselves).

Sales flat at MPG but higher funding costs this year as the Aussie acquisition was debt funded half way through last year, (full years funding costs this year).
What does this suggest for net profit after tax next year ? Normalised this year was $21.3m excluding acquisition costs of Aussie company but FY18 to include a full years funding costs so where do we see FY18 profit accounting for that ? (Note interest expense moved from $3.215m to $4.183m from FY16 to FY17 due to the extra 6 months of funding costs of the Aussie acquisition made in Sept so we would expect a similar sized increase this year to reflect a full year, approx. $1m in extra interest in FY18

Net Profit for FY18 ~ $20m ? 185.3m shares on issue gives EPS of 10.8 cps. What PE to ascribe to this company given their track record to date and the fact that its a cyclical building supplies company ?

[winner69]

Beagle - higher depreciation expense as well as new capex comes on stream. Will increase a lot over the next few years (like $25m capex in F18)

What divie next year - AGM preso slide mentioned low end of policy range (so 55% of npata instead of 67% this year) ....and with that capex they'll possibly havevto borrow more to pay it

Anyway Beagle - shouldn't you be using their aspirational financial targets (slide 16 AGM preso) as a guide for F18

[winner69]

Beagle's forecast - Net Profit for FY18 ~ $20m ? 185.3m shares on issue gives EPS of 10.8 cps. What PE to ascribe to this company given their track record to date and the fact that its a cyclical building supplies company ?

Jeez if Australia making another $3m/$4m this year that forecast NZ business is a disaster to put it politely - flat but sliding downhill.

Very competitive industry.

[Beagle]

Beagle - higher depreciation expense as well as new capex comes on stream. Will increase a lot over the next few years (like $25m capex in F18)

What divie next year - AGM preso slide mentioned low end of policy range (so 55% of npata instead of 67% this year) ....and with that capex they'll possibly havevto borrow more to pay it

Anyway Beagle - shouldn't you be using their aspirational financial targets (slide 16 AGM preso) as a guide for F18

Yes good point on the capex and depreciation Winner. As noted above, this is a very very small part of my portfolio so doesn't warrant the full Beagle work-over and sniff test.
Regarding slide 16 - You tell me on this one mate, full of creative corporate speak or do you believe them ?
Did this weeks ASM effectively amount to an implied profit downgrade ? Is their talk of the need to look for efficiencies in the second half tantamount to admitting their expansionary plans haven't really worked ? Is the Australian acquisition EPS accreative and if not when will it be ?
Do the directors and management truly understand that growth without growth in EPS is useless and unless they're growing the latter they cannot be considered a growth company ?