As I peruse the Annual Report I am struck by the photo on page 18. How do you have an executive team of 10 in an organisation of this size? To me an Exec team is the CEO, COO, CFO, Head of Sales & Marketing and maybe a Legal/Product guru (i.e. the person who has been there 60 years).
Assuming these 10 are also the highest paid the wage Exec wage bill comes to about $3.8m and that includes the CEO who doesn't seem to be reasonably paid
There's 20 employees earning more than $200,000 which seems an awful high number for company with sales of just over $200m
From the table in the AR you wonder if every man and his dog (except maybe the tea lady) is on at least $100,000
No worries - no doubt they all do a good job and deserve every cent of their rem
Last edited by winner69; 24-05-2021 at 05:49 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
This thing is without doubt one of the mangiest things to have been listed on the NZX in recent years...sadly one of several.
Where is the pay-off from all their recent capex investment in modern processing machinery we were assured was going to boost efficiency and productivity ?
MFB also headed down to where this mutt is. Mutts are pack animals.
What the heck are all these highly paid executives doing to fix this ongoing fiasco ? How is it possible to have a fairly dominant market position and a robust sector dynamic and yet they are executing so poorly ?
Last edited by Beagle; 24-05-2021 at 05:50 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
For the past 3 years revenue and profits have decreased. Profits are falling faster than revenue.
Private equity should come in and pay current shareholders $0.60 a share which would be a 42% premium to todays sp valuing the company at $111m. Everyone would accept.
Then as Ferg says remove the hapless board and restructure the bloated leadership team. Cut out half of the 20 employees at the trough earning $200k+ as W69 has pointed out (they have 169 people earning $100k+ out of 220 total employees- WOW big money in glass) and then run off with the $30m operating cashflows that would actually grow under a new focused owner.
Then the private equity firm can float it back to the NZX for $400m in 5 years time. As per HMY and MFB there is plenty of people that will pay a pretty penny for what their broker says is a good bet.
Sheet glass ‘race to the bottom’ complicates Metroglass turnaround
Hints of a sheet glass price war creates opaque outlook for local producers.
In the year to March 2021, there were a record number of new homes consented in New Zealand – some 41,028 homes, eclipsing for the first time a record set
Sheet glass ‘race to the bottom’ complicates Metroglass turnaround
Hints of a sheet glass price war creates opaque outlook for local producers.
In the year to March 2021, there were a record number of new homes consented in New Zealand – some 41,028 homes, eclipsing for the first time a record set
Its a very good article but I don't think quite as negative as the headline suggests. Clearly a very competitive sector but MPG seem to be navigating it pretty well under Mander. Once they start paying a dividend at the interim...he used the words "very confident" then as debt also keeps declining the equity should keep being re-rated.
The one point of concern medium term is you can sense there is a big capex cycle maybe in 2023-2024 as they've only spent c. $8m a year for the last 3 years as they've reduced debt. Might run into maybe a $15-20m capex year so dividends are likely to remain around 2-3cps imho, nothing like the 7.5cps they paid pre-2018.
There is obviously a lot of concern at the high overhead structure and pressure on margins, and that is fair enough. But lets not forget that the reason MPG is where it is ( 80% down from a few years ago , when the market is up ) , because the Board ( and PE guys ) loaded the balance sheet up with debt to a dangerous level, and paid a crazy amount for an Australian business that has lost money ever since. They turned a fundamentally ok business into a cot case !!
The latest results do show that margins have declined . But they have actually done a pretty good job of sorting the Balance sheet, and I think it is reasonable to assume that they will continue to reduce debt, albeit at a slower pace. I was disappointed by the Australian result, which failed to get over EBIT break-even. But that was very Covid affected, and was in fact an improvement on last year.
The thing that did please me in the report, was a very clear and reasonable statement on Dividends, going forward. The market quite rightly remains skeptical , but I think that statement has been the main driver of buyer interest in MPG. Given the recent history of this company, I doubt there is a broker in the country who would even suggest having a nibble at the stock. So the reasonable level of bidding for the stock in the last couple of months is encouraging. And frankly they have had more support than I had expected. MPG is on the road back , but will need to maintain momentum and deliver solid results over the next couple of years, before the market will fully accept them back into the fold.
This opaque glass race to the bottom at a time when building activity apparently at high levels doesn't seem to make sense
Maybe the new competitor is struggling a bit to keep their factory and staff busy
Not a sector I follow closely, but wasn't MPG's argument that there was a long lag (6-9 months) with glass being one of the last bits of the project completed. if so, maybe their post-lockdown lift is still developing? Wasn't the new competitor in Chch, a much smaller market than Auckland?
I think the "new" competitor is in the mighty Waikato. And yes Winner, there are a few competitors with under utilized capacity.
Of course this is the problem with businesses that have a shallow moat around there business. There should be opportunities , given MPG's relative size, for it to develop better barriers to entry around its part of the market. It needs to be doing that now. And that is why I am relaxed about them starting to invest again in the business ( capex ) .
They made a huge mistake buying into the crowded Australian market, when they should have been strengthening their position in NZ . But, too late to worry about that now !
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