MXCP.L Share Chat (MXCP)

Hi again, just wondering if anyone is still left, iam here but hear my voice echos as in a long empty corridor, am I alone? Be interesting to see after all this time what return there will be.. Good luck to everyone who is involved....Gordie

I don't know if anybody reads this but there you go.
http://mxccapital.com/wp-content/uploads/2021/06/174973-Project-Press-II-Tender-Offer-Document-AS-PRINTED.pdf
I fancy the best pickings will come later. But having gone for it quite big at just over 50p to add to the rest rather than take a loss it's working out OK - though it's been pretty dead money, especially when you're in the dark. I suspect I shall take at least some of it, bird in the hand so to speak.

minimal interest

Whatever other influences were in play, It seems to me that the absolutely minimal disinterest in the shares illustrates a deep distrust of the management, rather than the business model. I assess that buying at current price would have meant paying no more than 15p for the various businesses, with the rest consisting of cash or predominantly secured loan notes.

Nobody much wanted the shares at 50p, let alone where the ask has been pitched today.

Https://www.proactiveinvestors.co.uk/companies/news/1022157/mgc-pharmaceuticals-receives-permission-to-import-psilocybin-mushrooms-into-europe-1022157.html

The actual and potential disadvantages to minority shareholders in a private company are well documented. Having said that, it looks as though the market cap is one third cash, and it is trading at half probable NAV. of about £1. That would normally be viewed as an opportunity. There is a flexible up to 5 years to run on the investments at management's discretion and according to circumstances. Ravenscroft and the GIF will have a hand in some of that, as will Liberty Global. There is time to top and tail. A number of cumulative % pa over the £1 would 'pay dividends' over time - and there is probability of premium on exits. But, on this or any other chance, there is the possibility of many a slip between cup and lip.

Resolution passed as expected, could be a buying opportunity at this price but safer bets elsewhere imo

On 17th February Investors Chronicle (there being no option of tendering shares back to the company at a price nearer NAV ) advised smaller shareholders to sell at what Simon Thompson said was an artificially depressed price, or take the Hobson's choice of holding shares in an unlisted company for 5 years. The company proposes pricing shares at NAV for scheduled returns. Thompson gave his estimate spot NAV as £1.03. If he was correct, then today, with Ide's rather strange ( I think ) downwards movement on what is MXCP's last day of H1, it now stands at £1.

A mite late with that holdings RNS in my view, with Smith just having to inform himself. One would expect it the same day or the next. There was not much reason for him to buy a few shares from the cash he took from the tender offer, but looking only at insider deals listed on this site, it appears it might have been in the interests of one or two of the others to average down on their last purchases.

It is in my judgment a question of operation in a less-regulated environment, substantially locked in, with little information, balanced against returns at net asset value as investments reach maturity and are sold off, hopefully at a further premium to current book value. On that basis alone, the shares are currently trading at about half the minimum sale value and return over the period. Although far from ideal for some, others may view it as an opportunity, particularly at this price.

Small share holder here but of long standing.
I think this makes sense I could never understand the discounting myself just not in fashion I suppose.
This makes the game exciting again. Now discount is bigger than ever might even buy more.
Good luck guys ....

Apologies. I now see your earlier post and you have already sold.

I post as I see it. Others may do so. Perhaps you will decide to sell and have done with it.

"This was always likely to be a finite investment"

You having a laugh?! You've run a one man bulletin board on this share for the past couple of years piping off the directors and the long term prospects for this company! So much so that I was wondering if you were actually one of them or at least worked for the company!

No panic selling here. Just a fatigued investor of 6 years who's seen nothing but share price decline and no return. I simply don't have another 5 years of tolerance in me just to end up breaking even whilst watching the hapless directors drift off nicely into retirement with my investment.

This was always likely to be a finite investment - it would cease on Smith and Wheeler retirement, whereupon they and the concert party extract their original cash and profit. The same will apply to the rest of us. It is anticipated investments held in about 5 years time will be at the top for them, or become so during the next 5 years. This is a way out for them. There is more to it, but generally investors will see returns based on NAV over time, and cash at the end. Also a matching facility. Return should be far greater than now - we are well below NAV. I regard this as a nuisance - but in my view panic selling based on this substantial change is not the answer. Indeed, there appears to be money to be made ( certainly from here )if one is prepared to hold and go through the motions, as management will have to - as I indicated before, NAV is substantially higher. The business itself is the same today as yesterday. This comes as a surprise, but I shall work with it with a view to ultimate profit, as the concert party are doing.

Yes Vulcan, good luck with that
Welcome to aim and cr*p managers , who are only in it for themselves, they say it's in the best interest of the shareholders !!, no doubt they don't have shares any or have sold months ago, and will probably wangle themselves some kind of bonus once delisted.
Unfortunately you only have two options 1 Sell up and take the hit or 2 Vote against the delisting and hope many others do the same, but even then there is no guarantee.

Good luck with that Vulcan ...

The share price has been below NPV for several years because MXC lost credibility over the insider trading and accounting manipulation at Redcentric: https://www.sharesoc.org/blog/red-faces-at-redcentric/

Coupled with no actual return to investors in terms of dividend or value and it makes this share just another tragic AIM clusterf*ck run by incompetent directors who don't care about shareholders. I've sadly been invested here since before the Redcentric scandal and sold this morning for a 65% loss!!

Read section 2 of the RNS ... the company is being wound up within 5 years.

"The Investment Return will continue until the Company ultimately exits all of its investments, at which point the cash remaining in the Company will be returned to Shareholders and the Company wound up. The Directors currently anticipate this will occur within the next five years."

You will own shares in an unlisted company. You get nothing.

So the NAV was 117p so if the firm cancels from AIM I would assume we would get this per share (plus/minus any changes since the Final Results).........

I would assume the NAV includes the circa£70M in cash on the balance sheet as well......

An observation only. MXCP has dropped back to approaching the price at share consolidation in February 2019. In May 2019, the company reported a NAV of 97p per share at 28th. February. Ide then stood at 1.55p, and Adept4 at 0.9p. If matters are proceeding as planned as investors here will have banked on, then reported NAV should not prove to be less at half year end this month. Investors Chronicle previously optimistically suggested a premium to NAV. Pending update here I sense that investors may be watching the fall of the two listed companies from their inflated high prices, rather than considering the business progress being made over the year within Ide and potentially whatever Cloudcoco may eventually show by combining it's reselling business with Adept4. Great effort is going into Íde, and something had to be done with Adept4, so it was. But the eventual aim is to secure exit from both companies, to concentrate on the substantial existing and future private investments and fee-paying relationships. I cannot know, but postulate that MXCP may be trading at a discount of around 30% to NAV., but the true position will only come with results.

Not in time for the AGM though.

"The Board believes that the value of this division is not fully reflected in MXC's NAV and hence, as we announced in September 2019, we are looking to separate it from the broader MXC Group. We hope to announce further plans regarding this demerger in the new year."

Does anyone think buying more would be a good idea?

'It is the intention of the Company to continue this theme in the forthcoming years, rewarding loyal shareholders with a dividend-like payment whilst also enabling other investors to exit in whole or in part either by way of the tender offer or by the EBT acquiring more shares in the market. It is expected that this will lead to further consolidation of the shareholder base so that in time, the business may look and feel more like a family office rather than a classic public company.'

My first thoughts were that 12% is enough in the EBT. Having said that, the company is intent on putting the squeeze on tradeable shares ' in forthcoming years ' through tender offers ( shares cancelled ) and the EBT, as part of their effort, alongside private investment, to increase and stabilise the ongoing share price closer to NAV. From the wording, I wonder if there is consideration of a complementary mechanism of returning cash to those not wishing to take part in a tender offer - the ' dividend like payment.' But perhaps others read it differently.

There are no surprises, with matters apparently proceeding as planned - though it seems that cost-effective possible acquisitions for MXLG are thin on the ground. The RNS is more a concerned with setting out the Mxc stall for the future, with their exits in due course from Íde and Adept ending smaller investments in quoted companies, whilst MXCP itself will remain listed affording the opportunity for investors to participate, alongside the demerged dividend paying company on the Gueernsey exchange ( further details in New Year, I imagine in time for AGM )

Subsequently, there is a probability of comment from Investors Chronicle, and a possibility of director buying.

forms 6% of the Bailiwick Investment Fund.
https://www.ravenscroftgroup.com/media/1908/bailiwick-investments-factsheet-september-2019.pdf

Should previous timing be followed, annual results and guidance can be expected at the end of this month. We may hear more about the demerger, and circular, with the AGM then being only perhaps 2 months away. Ravenscroft affairs will continue to be ticking over, particularly as they have bought 25% of the demerging company. 3 acquisitions have so far been made into MXLG, which was last reported as achieving a solid platform of monthly profitability, the clear inference being that the intended large company is coming together well ( for purchase when complete by Liberty Global ) I doubt we shall hear any more about Íde beyond their own September RNS. And Adept4 will be a matter for their new management, though I expect MXCP will express their pleasure at the Cloudcoco 'acquisition' and prospects for their investment. There has been a further notable move in the formation of Channel Islands Media Group jointly with the BIL, involving the significant sum by MXCP standards on the single acquisition of Guernsey Press.
'There is a fabulous opportunity to make the GY4U portal the go to destination for all things Guernsey. As a captive market, unlike the UK, we can create a single source for news, user specific content, loyalty schemes and of course the obvious Automotive, Housing and Jobs market. The media landscape has changed significantly in the last decade and technology has been at the heart of those changes. We are looking forward to being part of such a respected Guernsey name and helping it to further embrace technology so that it drives value for both users and investors.'
MXCP bought the business from Claverley Group, who continue to run the sister press in neighbouring Jersey.

MXCP updating the previous holdings RNS to show the new percentage holding.

He is a lot of cash to the good, whilst still retaining his original pro-rata %age holding. A sensible move for him with the amount of personal equity he has tied up in MXCP.

Maybe their just playing the game, I've played took advantage of the offer then bought back and gained about 50 shares after covering costs. Good idea? Bad? But fun who knows what they will be worth in a few years. Lol......

Ian Smith is as entitled as other shareholders to take advantage of the tender offer. It may be interpreted as him not expecting to see shares at 116p for a while, and it would have looked worse had he sold in the normal course of events. I take it that he has considered that his sale will not be to the detriment of his remaining 15.5%. Unhelpful to the cause, but perhaps he has plans for the cash.

( continued ) The tender offer cash substantially came from the demerging company. Therefore if things continue as hitherto on advisory and arrangement fees, one can expect a perhaps 10% pa return on those 'free' shares (alongside the value increase or decrease in MXCP investee companies ) One must hold MXCP shares to get the others on the record date, whenever that is published. It will require a circular and General Meeting, so investors will have time to buy into that if they wish. Major shareholders, the concert party, will vote it through. In the meantime, I continue to hold all my shares, with prospects widening and improving for the company and wishing to take full advantage of the demerger, whilst thinking 95p is very much the lowest price I can put on the shares There may be some minimal support for the last thought from one or two only, responsible for the small intraday reversal this morning, bouncing off 97p. We shall see on that. And incidentally there was a marked turnaround at Adept4.

A few words on NAV ( with which investors and commentators are concerned, though in my view there should be a substantial element of forward valuation) This was last reported as 116p, from the previous reported NAV of 95p. I can take little account of private companies, last valued at £13.5m, but that will have changed, though if all is according to plan it should not unduly affect the NAV movement and basic calculation on the facts in the public domain. With MXCPs large investment in Íde, and a very much smaller one in Adept4, this is subject to swings, downwards since 116p which figure was at the height of the remaining two listed companies share prices. At 31st. August ( 116p NAV ) MXCP held as it does today, 172811125 shares in Íde, then valued at 7.35p, worth £12,701,617. At close today those same shares are worth £6,221,200. At 31st. August MXCP held 68066275 shares in Adept4, then valued at £2,416,352. At close today those same shares are worth £1,088,460. MXCP has purchased a further 7m shares, I suggest at 1.4p - I have excluded those as that is near enough the buy closing price today and the cash to buy them came from MXCP cash holdings, so is offset in relation to NAV. Taken together, the value of MXCP shares in Íde and Adept4 has decreased by £7,549,092. With a reduced number of 65,742,407 shares in issue following the tender offer, that amounts to a decrease of 11.48p per share from 116p, giving a NAV of 104.40p per share. Taking into account the £1.7mil from cash resources to fulfil the tender offer, that figure can be reduced by a further 2.58p per share to 101.82 per share. A snapshot in time, which I came to for my own purposes and decided to share for what it is worth. We can see the rises in Ide and Adept4 for what they were. Their prices were chased up. I think Adept4 has stabilised. But it will not be until Íde next updates/reports that we shall see what investors make of it. And I expect MXCP to report in November. Though evidently very important to MXCP, the company is not all about Íde. Perhaps there will be more information on the major 'new' buy and build MXLG, which was last said to have moved into ' a solid platform of monthly profitability.' And there is the Ravenscroft tie-up, which also gave rise to the recent joint venture with the Ravenscroft administered Bailiwick Investment Fund. Bailiwick and MXCP each invested £4.9m in the formation on 7th. August of a new private company, Channel Islands Media Group, holding 50% each, and bought Guernsey Press.

Contrary to the theme of my post before last, MXCP bought 7m shares in Adept4 last Friday. We shall see if they intend to buy sufficient to maintain 15% following BGF dilution, or whether they progress further. It does at the very least show their faith in the new management, and Adept4 prospects. It may be that the business will be taken further than the reselling position occupied by Cloudcoco, and certainly they are excellent salespeople.

Adept4 is a relatively small part of the MXCP portfolio. As a broad brush, today's 30% or so loss at Adept4 would have the effect of reducing Mxcp's market cap by less than 0.75%. That is the upside of investing in the less exciting 'fund' of MXCP companies, with the current option of investing at no additional cost in the future demerged, dividend paying transactional company.

This is not a comment on Cloudcoco future. BGF were always likely to exercise their options. And there are many remaining. From an MXCP perspective the percentage of Cloudcoco held will slowly drop. They have done well to make something out of the previously ailing Adept4 - now taken over by a sales team of resellers. It is only my opinion, but I do not think MXCP will be overly interested in that as it stands. Of the listed companies, their interest must be focused on Íde, with at least a return from Adept4 from the loan notes.

The tender offer and loan notes are finalised. MXCP's 15% of Adept4 is currently worth about £1.47m. The terms of the loan notes have improved for Cloudcoco, insofar as there is no early redemption payment as with BGF. ( and not as with Íde, where all fees and interest to end of term become payable on redemption ) And Mxc warrants are cancelled. But BGF now holds options over 50m. shares, rebased from 6p to 0.35p ( in exchange for writing off £1.5m in loan notes, and selling the £3.5m remaining to MXCP. If full term, the £3.5m now remaining in loan notes will become £6.17m in 5 years, a return on investment for MXCP of £2.67m. We can now expect an early step to be the demerger of MxcUk ( into which advisory fees flow ) and the award of shares in the new company on a pro-rata basis to shares held on the circular record date in MXCP. MXCP has said current cash will be fully invested within a few months, and I hope news of that will be published. I would expect that further cash will in due course be found for future investment, likely by sale of an existing investment.

Like many, my notice regarding the tender corporate event came through yesterday. There is no charge for administering that. Everyone will have different circumstances, and make different choices. The notice prompted me to reconsider. 116p. is not to be sneezed at. I think it unlikely we shall see that price this year. In my personal circumstances, I can wait for better, and for me alone my last post stands. The theory is the price may rise following the cancellation of shares. It may be helped by those taking advantage of the tender offer in one way or another, and then buying back in. I do not know. But in my perceived scheme of things, the offer is not for me. And I do not discount a follow-up tip, giving further opportunity to trade as before, hopefully after the pro-rata assignment.

Tend to agree with ralleigh, barely breaking even at the price so what would have been the point but in saying that I shall submit a small percentage just to play the game...

I did not invest to take advantage of a tender offer at 116p. The price has already touched 115p. If I did not expect the price of my entire holding to exceed 116p. over the next year I would not be here now. I may be wrong, but I doubt MXCP will let us have our cake and eat it. IWe shall see on that. My priority is to ensure I have as many shares in the demerged company as possible on the pro rata basis. It is the to be demerged company which is paying most of the tender offer, through fees from the joint ventures with Ravenscroft and Liberty Global. MXCP say that Mxcuk is generating over £1m a year in fee income. In fact, results for the 6 months to 28th February show £707k in fees over £296k for the previous corresponding period. MXCP say the revenue streams have continued into the current year. The demerged company is throwing off cash. Ravenscroft has seen fit to buy 25% of it. As far as Ravenscroft is concerned there is dialogue about a follow on fund to the GIF, and MXCP say "The MXC board believes that additional partnerships like the ones entered into this year (referring to Ravenscroft and Liberty Global ) will become available to us in the future." I have a feeling the fee receiving business will grow, so will hold those MXCP shares I have, unless something happens to change my mind.

Up for grabs, which I'm looking at taking up as much as I can get................

Channel Islands Media Group Ltd. is a new company, incorporated in Guernsey on 7th August 2019, and is the holding company for the joint MXCP/BIL venture. The acquisition of Guernsey Press and subsidiary from the Guiton Media Group Ltd/Claverley Group is seen as "bringing ownership home." This is the Guernsey Press' own article https://guernseypress.com/news/2019/10/01/guernsey-press-soldto-local-investors/

I had expected a Liberty Global acquisition before anything else. But other opportunities arise, and one has been taken undoubtedly after months of discussion and due diligence. Accepting the investment is a good one, and I would not be an MXCP investor if I doubted that, the real positive for me is that this is a new relationship with a quoted fund ( prepared to make 50% partnership investments), arising from the existing relationship with Ravenscroft and the GIF, Ravenscroft administrating the BIL in the same way as the GIF - thus opening up further opportunities and indeed possibly fee income ( though there is no mention of that ) Should there be fees, these will go into the proposed demerged dividend paying new TISE listed company. ( BIL is listed on that exchange also.)
https://www.ravenscroftgroup.com/invest/specialist-funds/ci/
As one would expect, Bailiwick has also published today's announcement.
https://www.tisegroup.com/market/companies/2704

Why?

hope to get more information from the circular and/or Hargreaves Lansdown, but as a matter of interest I note that Ravenscroft are themselves market makers for the TISE exchange, and deal in the exchange's own shares. I do not suggest they will necessarily trade demerged company shares ( conflict of interest at first sight )
https://www.tisegroup.com/market/trading/

On the demarger, I meant to add something more positive about holding shares in MxcUk - that I take note of what has been said ( below ) And also that Ravenscroft did not buy into MxcUk without seeing advantage to their own shareholders, and Smith, Weaver and associates plainly see advantage to themselves, with them receiving shares on a pro rata basis in the same manner as all MXCP shareholders.
"The fees from our transactional businesses flow to MXC Capital (UK) Limited ("MXCUK").  Post year end, we completed the sale of 25% of this company to Ravenscroft for £2.25 million. The investment represents a deepening of MXC's relationship with Ravenscroft, which we believe will help to grow and drive further value within MXCUK, as well as providing additional opportunities for our investment business. We continue to assess the strategic options for this valuable part of our business." ( we now know demerger is part of that ) and also,
" We are delighted that Ravenscroft has decided to take a significant stake in our transactional businesses, demonstrating their belief and confidence in the MXC model. It is testament to the excellent relationship we have built with Ravenscroft as a result of working together on the GIF and we look forward to building on that relationship to create further value for both MXC and Ravenscroft's shareholders."

The Ide results were welcome, drawing a line under things. Some seem to have expected too much too soon, but indications are that with Mxcp's 43% and loan notes, and with their usual support from Kestrel, and board representation, all parties have a vested interest in swiftly completing the remedial action, and growing the company. We are now waiting to see developments with Adept 4, and how MXCP will come out of that acquisition. And I expect MXLG to make acquision(s) soon. There is also the tender offer, which I suspect I shall find of minimal interest. In any event, if there is a choice to be made, I shall try to acquire as many shares as possible in the new demerged company. One never knows what it may lead to, and it would seem unlikely there will be anything to lose, as they come 'for free' with promises of a dividend, albeit that is likely to be minimal. But we await more information.

It is my opinion far too much emphasis has been placed on NAV. That is probably because in recent times MXCP has set its first target at closing the gap between share price and NAV, something repeatedly mentioned in updates. But the situation has changed, with Íde and Adept4 being given long overdue attention, by the appointment of a heavyweight board at Íde, and the acquisition of Cloudcoco at Adept4, bringing what appears to be a growing company with an aggressive management team into the mix. In addition to those two, MXCP has it's private companies, which include the Liberty Global joint venture, investments on its own account in others, and also through its relationship with Ravenscroft and the GIF. The value of the transactional company will now be fully recognised through the new listing, with Ravenscroft owning 25% and we MXCP investors due to receive pro rata shares of the 75% we own on the relevant date (but we await the circular ) The company has £21.5m which we have been advised will be invested over the next few months. Undoubtedly there will be acquisition(s) into MXLG, and there is a strong hint that there will be a GIF follow-on fund giving yet further opportunities for investment, and the fees from their work for the fund, as well as those fees coming from the Liberty Global co-investors. The way the investments with Liberty Global are structured means that more, or larger acquisitions can be made achieving greater economies of scale. It appears that the next few months will be a newsworthy period, making investments to grow MXCP capital return. They benchmark themselves against a 2.2x return over 4-5 years. The Castleton buy and build, which is the only recent one which possibly compares to the Liberty Global ( starting to show profitability after 3 acquisitions ) buy and build, achieved a 3.3x return over 3 years. And 'size and scale' indicates the intention to build a far larger company. The next few months should further consolidate the investment base. And in my view the activity, and potential for sizeable returns justifies a premium to NAV. That would be normal for a progressive company, let alone one where most of the share price iwill be backed by assets.

We are now waiting on
Circular(s) with full details of demerger, and tender offer
Circular re. Adept4 acquisition of Cloudcoco, giving terms of loan notes and hopefully transparency on shareholdings.
Details of further investments/acquisitions, anticipated over 'the next few months."

£9m.

In view of the few buys today, I wonder if the full implications of the RNS have registered. The value of the trading arm at £10m has previously been unrecognised. That is no longer the case, with the value now being recognised in a new company, and MXCP shareholders rightly having that value transferred by the grant of new dividend paying shares, in a £10m. company.

And to a much lesser extent, " Dialogue has commenced with the shareholders of the GIF about a follow-on fund leading to potential further management fees in the future."

This is what I am talking about. Headway being made with MXLG as a trading company, and building. "With respect to our partnerships, LGJV successfully completed two additional transactions and now has a solid platform of monthly profitability. Additional deals continue to be reviewed."