Member Info for Merciaman

In the past couple of years May has been the month in which Mirriad has announced its FY results. Last year 11th May, year prior 10th May.

Given the frenzy of the past few days it will be interesting to see if they keep to this schedule, or delay. And if they do announce, you would expect some updates alongside the results.

Makes sense Mountainous - Mirriad is a punt in my view, but one that could be significant indeed. It's why I'm a shareholder.

The technology / IP seems to be excellent, the problem to now has been that it has proven too difficult to date to monetise it, hence the cash burn and the ticking clock to Q3 this year.

If they could re-finance / re-capitalise they give themselves that much more time to monetise the tech. That would also give the BoD more leeway in any subsequent discussions over a possible sale of the company.

What I'm not sure about is how a re-finance might be acheived / what shape it would take. Getting on for 70% of the shares are held by 9 major players, mainly institutions. Do they provide more funding for a larger stake in the company hence diluting other shareholders ? Rights issue maybe ?

To be honest I doubted any sale process would generate interest at a level that the BoD thought they could accept. After all, if you're a company that is interested in Mirriad, the principal reason for that interest is the intellectual property - and given Mirriad's cash position, why buy it when you might be able to pick it up for a song after Mirriad runs out of cash and goes pop ?

Spot on I think Mountainous.

Mirriad's technology has a lot of potential - the problem has been the time it has taken to try to monetise it, and getting to that point still seems some way away. Meanwhile the cash burns. Given that, I imagine there are some players who are waiting to see if it does go pop, and then to pick up the intellectual property for very little.

I suspect the board has ended the sale process because they got some pretty cheap offers that didn't appeal. I think the hope is that the large shareholders agree further funding (maybe as part of a cash raise involving all shareholders) to give the business more time - putting it in a better position without the cash clock ticking so loud, and maximising the opportunity to monetise the tech.

I don't know the details of this, but as per the document that announced the strategic review on the 20th January, "the strategic review will be undertaken under the mechanism referred to in the Takeover code as a "Formal Sale Process"."

I guess this has driven the requirement for lots of forms 8.3 and 8.5 documenting shareholdings and transactions.

I really don't know, the technology has clearly got something that would be of value to the right partner, but given the rate of cash burn the clock is ticking - and I guess that weakens the board's position.

In my mind, for a capital raise to be successful there's got to be some realistic prospect of monetising the tech in the next 12 months to an extent to where there is a viable business. Not sure that's a likely prospect.

A business looking to acquire the tech might wait until the cash runs out and pick up the intellectual property for a song ? Or maybe for any number of reasons they'd pay something to acquire it. Whatever, given a mkt valuation of only £4.5 million, it wouldn't cost a big player much.

As always DYOR.

I suspect the current ongoing strategic review may well end with the technology being absorbed into a much larger organisation - probably due to hear more in the next couple or more weeks given their last update that expected to receive "proposals" in early April.

I would guess they have about 9 months or so cash left, and progress in monetising their technology has struggled to achieve any step change forward. Clearly they won't be able to continue as is into 2024.

I've mentally written off my small investment here, one of those punts that hasn't come off.

Don't "know" anything Freddie2.

"Expect" to get one share in each of the 2 businesses for each share held of Melrose currently. Key question will be how will those businesses be valued. I'd expect them to be worth more than the current c£6bn market capitalisation (otherwise why split ?), but how much more ? Only thing I think is sure is that the aerospace business will be valued more highly than the automotive.

I assume, to fit with their previously announced timetable, that the annual results 2 weeks tomorrow should clarify everything ?

Interesting couple of recent TR1 announcements, indicating that Capital Group Companies inc has increased its stake and now owns 15% of the shares / voting rights. While Melrose strikes me as being a valuable investment full stop, I suspect this might also be Capital taking a "position" ahead of the upcoming split ?

Even with the recent rise the share price is still well below the last reported NBV of around £1.85 per share.

Annual results announcement scheduled for 2nd March, and would expect some announcements regarding the upcoming split / demerger by or before then. I can understand people taking profits, but for me this remains a hold for a while yet.

Suspect most are awaiting the inevitable upcoming cash call and how that will be organised. Given 68% of the shares are held across 9 financial institutions, what they want to do is probably going to be key.

I suspect that it's more a case of there being little prospect for a trade sale of the GKN components in the forseeable future that has driven Melrose down the demerger route.

Aerospace is also likely to carry a higher rating / p/e ratio than automotive - so the demerger may enable better shareholder returns for that business, free of any "drag" from the rest of Melrose.

As other posters have indicated, possible recessions are never good for the business's that Melrose takes on. But I suspect the fall is also driven by the likely time it will take to complete the demerger - sell now to pick up on other investment opportunities over the next few months while Melrose does all the lengthy work it needs to.

I have to say, no idea. Maybe the upcoming webinar (26/9) might shed some light ?

Don't think there's any forward projection given the uncertainty about if / when / to what extent the technology could be taken up and therefore monetised.

That's a good call Wassup. Think the board between them own only about 1% of the issued shares, a number that does strike me as low.

Interesting webinar today. Not much new on the technology, but - and I may be wrong - I sensed a measure of underlying confidence amongst the senior guys making the presentation. I have a feeling there may be some upcoming positive announcements, hopefully driving revenue upwards.

Wonder what any other attendees felt ?

Completely agree Funkyfish. It is a start up, they've raised capital, the question is can they monetise their technology into sales ?

The next few months will determine things either way. As the results stated, they will enough cash for around the next 16 months. If they cannot generate meaningful sales in the next few months, I'm not sure what would be attractive to potential investors to provide that cash going forwards.

I guess we'll get a further update on the rate of progress from tomorrow's numbers.....

Article is date 5.11.21. The article refers to the Q3 / 9 months numbers that were announced 4.11.21.