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Great RNS, market slow to respond buy steady buying now. :)
Http://www.lse.co.uk/AllNews.asp?code=1b2skpcz&headline=Mountfield_Shares_Rise_On_Extremely_Successful_2018_Performance
"Mountfield Shares Rise On "Extremely Successful" 2018 Performance
Fri, 14th Jun 2019
Construction and flooring firm Mountfield Group PLC said Friday that annual profit and revenue surged amid an "extremely successful year" in which both units delivered strong volume and order book growth.
Shares in Mountfield were 4.4% higher at 2.09 pence each in London on Friday morning.
In 2018, pretax profit widened 27% to GBP1.1 million from GBP864,372 million the year prior. This was after revenue jumped 28% to GBP16.2 million from GBP12.7 million the year before.
Mountfield Chair Peter Jay described 2018 as "another extremely successful year" with both its Mountfield Building Group and Connaught Access Flooring trading units having "traded successfully and provided the group with an increasing volume of business and an active and growing order book."
Mountfield does not pay a dividend.
Jay added that the firm is "very well placed to capture significant new quantities of business that is expected to flow from the data centre and telecoms sectors as a result of the introduction of 5G networking technology beginning in 2020."
"CAF and MBG both operate in markets where demand for specialist construction services for the telecoms sector is strong and is likely to increase," Jay continued. "With the benefit of their low-cost operations, excellent client bases and reputations for completing contracts on time and to an extremely high standard, they have the potential to capture a greater share of work from existing or new clients."
With their specialist position in data centres etc & their excellent reputation the future looks bright indeed. Clearly signposted by the company & Google Maps is not required to find the destination.
Excellent results - would have been nice to see the d[ividend] word mentioned, if only as an aspiration for the current year. Nonetheless these results + prospects leave the company looking cheap.
Excellent numbers - £1.1m PBT and 0.27p EPS for a £5.7m m/cap company trading at 2p makes MOGP look very cheap indeed.
The EPS would have been a lot higher but for the very high tax charge at 38% - half of which is due a one-off deferred tax debit, so is much higher percentage-wise than last year. Without this the true post-tax profit and EPS would have been even greater.
The outlook in particular is very, very bullish. It's not often you see such confidence not only for the current year, but for years ahead, with the introduction of 5G having a "profound" impact on Group performance.
Mucho upside here imho.
:o)) Hi stef....
Up again today after a 244k buy. Hopefully more to come prior to the results next week.
riivvvaalldddoooo,,,hello my friend
Up to the highest since September 2018 now. Results should be in the week or so, and they should certainly be excellent for a mere £5m m/cap company.
And the outlook should also be very bullish given the "buoyant" demand.
Agree with you Rivaldo the results should be great and I think investors are gradually understanding how undervalued Mountfield is at the moment. If they announce any more orders on top of the current workload this would really be icing on the cake. Share price should accelarate past previous highs.
As noted elsewhere by Norbert Colon, CTO have today had a new broker note from N+1 Singer released citing European growth in Data Centres which they are targeting.
This validates MGOP narrative in recent updates re: similar growth opportunities.
Only a month or so until results (11th and 8th June in the last two years).
The results and outlook should be great, with "buoyant demand". It's just a shame the numbers take so long after the year end to produce!
Thank you for rounded analysis, Vodka. totally agree with you, especially about liquidity part. hopefully the next trade update will attract some traders going long not those who just do the same day trade.Before that it is an absolute bargain for now.
seanx
Nothing to do with margins which are actually good for this sector (and improving year on year). Equally, as you have correctly noted, they have very low long-term debt but they do have GBP 1m of total borrowings but this is down from GBP 4.8m in 2014. Interest cover was 40x for YE 2017 so no issues there.
I perceive the low valuation to be primarily a function of its tiny mcap (sub GBP 10m) which puts off a lot of investors right from the get-go. You then have the sector which is unloved at present (albeit companies like CTO are also bucking the trend). You then have a historically poor balance sheet / negative tangible equity / poor WC / net debt.
To top it off, the shares are illiquid.
All of that said, the results in June should be excellent and show a further improvement in a number of these factors.
I'm excited about their prospects for 2019/20.
yes, I am confused by the market reaction on the new contract. last year, as trading update: net profit before tax for 2018 will exceed £864k,In the Trading Statement of 27 March 2018, the Directors reported that the Group "had [orders
secured] for 2018 [of] £8.8m, a record high for the Group at this point of the year." As at the end of
January 2019, the value of work secured stood at £10m, another new high for the Group." now with 3.9m add on, contract for 2019 is14m. is any reason share price is not £2 to give £5M market capital. is the profit margin for such work low? or loan interest is high? But their long term loan was only at 180K in June 2018 published report.
Rivaldo
Yes, very good news indeed. It would be nice to know who the contracts are with - possibly ISG given their track record of projects together.
The current valuation of MOGP is indeed anomolous and I think its worth at least GBP 7m given the order book and outlook. A PE of 10 would in fact not be absurd and would put the share price up around the 4p area.
I would like to see a share reorganisation / consolidation (1:40 or 1:50) to get away from the current 'penny share' status.
A catalyst for a firmer re-rating would be the introduction of a maiden dividend and a further strengthening of the balance sheet and I believe the former is not far away. The balance sheet has already improved massively since 2015 and i'm hoping the FY results in June will show a further decent improvement with tangible equity back in the black.
https://www.investegate.co.uk/mountfield-group--mogp-/rns/contract-wins-of--3-6m-at-mbg/201904290700133212X/
Terrific news - £3.6m of new contracts, all adding to current year income, plus:
"the value of work secured by MBG for 2019 currently stands at a post-Admission record of GBP11.2m. Further instructions are expected this year from this particular client and from other parties with whom the Company is currently in negotiations."
A £3.9m m/cap is surely very, very undervalued.
https://cube.investments/mountfield-group-picks-and-shovels-for-the-data-centre-boom/
My thoughts on Mountfield Group - small with some risks but equally has the potential hugely re-rate from current depressed prices.
The great update of this morning didn’t attract more traction. Gives me the opportunity to top up at these low levels
Mate, have I pumped this? No, I’ve found value which is backed up by the company issuing an RNS saying that they will excced 2018. Dyor but I’m here for the long term as I see value here. I’ll be tipping up if it dips to lows again. Patience is the key here.
no you wont, you'll be dumping like all the others you've pumped of late
I agree. I’ll be adding on any dips and tucking away.
hobione If they can preform this well in this market i think a buy out is definitely on the cards. 3p+easy IMO
Has anyone else got a target?
Up and up
performing very well, BOD hold over half of Co shares. Excellent update.