Member Info for StreetsJ

I've seen it so many times: companies refuse to acknowledge any problems; the numbers continue to disappoint, the management continues to dissemble, very quickly no one trusts what they say and even when there is a good story to tell it takes years to win back credibility. and rightly too.

maybe its only people who are able to lie to themselves who manage to create businesses - if you faced the truth you'd just give up too soon.

I agree unhooked.

Also worth having. a look at the 1H 2H split. Something slightly odd going on there. In 1H investments in cases (both cash flow and on the balance sheet) was reported to be £7.1m, in the full year it was £6.4m??

At the half year total investment in cases £39.4m, at the full year just £40.2m - hardly moved at all.

Revenue up from £9.4m in 1H to £14.8m in 2H, but GP almost unch £5.0 v £5.1m And PBT down from £0.9m to £0.1m.

Maybe its all about to come surging back, but I wouldn't hold my breath.

I thought this was interesting company and have spent far too long looking at it but I have never invested and I think I'm further than ever away from pulling the trigger.

Cooklin put on a good show as always. Never anything wrong, always broad sunlit uplands ahead. We will see.

He did say that Cannacord are going to publish on them in the next few weeks. It will be interesting to see what forecasts they come up with.

Well I agree that's the hope. I just wonder if it will pan out like that. they always talk a good story but the numbers have been a severe let down for some time. Have a quick look at 1H 24 v 2h 24.

Revs. 11.2 v 15.1

CoGS 6.2 x 9.9

GP 5.0 v 5.1

EBIT 1.5 v 0.9

That's not an improving trend

Worth pointing out that the 17p in 2020 was made off £19m of revenue and the 13p in 2021 off £28m. The 2p for FY24 came from £26m.

The metrics of this business have changed and it would be foolish to ignore that.

Ask Cooklin on Investor Meet this afternoon what's changed and whether it will ever get back to 2019/20 margins.

EPS history

2019 12p

2020 17p

2021 13p

2022 8p

2023 -7p

2024 2p

For it to trade at 150p on 15x earnings (which seems reasonable), it needs to make 10p of EPS. It's just made 2p. How many years before it gets to 10p?

The momentum is all good, as expected; but the comment about year to date revenues is a bit disingenuous as the the new year is five months in already.

Disappointing that there won't be any figures until September. I know they have new auditors but that is an awfully long time to produce figures for what is a small company, with one business in one country.

What are you referring to?

I guess there's some relief in this statement. But if you ignore everything down to what revenue and profit will be for FY24, it's not quite so pretty. The previous Peel Hunt forecast (supposedly reviewed in December but actually unchanged since July) was for a EBIT of £8m. I wrote on here in November that I could just about tweak it up to £5m. Today they say it will be £2.5m. That's after £1.6m in 1H - so just £0.9m in 2H. If you double the first half interest charge (£0.6m) that takes PBT to £1.2m for the FY24 and just £0.3m in 2H. Net debt has risen slightly from £12m in 1H to £12.25m.

So I would say the numbers are pretty poor. Maybe 1.8p EPS for FY24.

However, notwithstanding Cooklin's natural overoptimism, the trends do seem to be in the right direction: case size is growing again, market is growing, house market is reasonably stable (necessary for recoveries) . Profits are squeezed because they've added cost ahead of this growth. I'd be interested to see what forecast Canaccord comes out with for FY25. Perhaps they won't, because it's too difficult to forecast. But that itself is a big problem.

Share price is only back to where it was in February so it's not as if this move means there isn't more upside, but I can't help remain cautious. Fundamentally I find it difficult to trust companies which put 23 paragraphs of good news before telling us - and not even explicitly - that profits will be down in H2 on H1.

Bold. You may of course be right. But I would be wary of attaching too much weight to the company's statements. They are always too bullish - certainly in my experience talking directly to Cooklin and reading his pronouncements.

I'm no chartist but this remorseless downward trend suggests to me that those in the know are not prepared to support it.

I think it's a really interesting proposition but I'm waiting until we have some actual numbers not warm noises. I'd also like to see what forecasts Canaccord come up with. They won't want to be caught out right from the off.

I doubt it's of any material significance to Manolete. Interesting though. It seems to have failed to sell at auction last October

https://www.barnardmarcusauctions.co.uk/auctions/18-october-2023/481773/

Why do you think Taylors are their solicitors? It says here

https://investors.manolete-partners.com/investor-information/registrar-and-advisers

that they're Stephenson Harwood.

I'm interested to know how you came across this info?

I see Canaccord have been appointed brokers. I suggested this might be the case back in November. it was clear that Peel Hunt has lost interest. I think this is (small) good news. It's good to have a new broker to talk about the stock. It was too small for Peel Hunt and they had lost money on it (theirs and their clients) so the salesmen lose interest and stop talking about it. Should be some new vigour from Canaccord. I guess they will publish a report with the trading update with some new forecasts. The numbers will be lower than Peel Hunt's stale forecasts (still up there on Refintiv) but that shouldn't be a surprise. I say "shouldn't" but you never know. I think it might well be interesting after that. I'm not sure I'd risk it going into that.

(Maybe Canaccord have already published - I haven't seen anything)

MANO are too often too bullish in their reporting. I just rechecked Refinitiv and Peel Hunt still haven't changed their (hopelessly wrong) numbers since July last year though it says they reviewed them in December. I can't see any mention of Canaccord following the stock on Refintiv - does anyone have any info on that?

There will presumably be a trading up date at the end of March but there's no guarantee there will actually be clarity on the actual numbers just more positive nosies from Cooklin. For the actual numbers we have to wait until June.

It's all been one way since Tuesday last week - selling (in small numbers) at c150p.

And today.

But then there was no obvious reason why it went up before.

With equal respect to you Forensic505, the 100% return is not comparable to other companies' returns. It is more like a gross margin: it is what they get back from what they paid, the problem is there are then the costs of running the business to be deducted and these are rising just as returns are falling. As Tommy15 says this may be largely down to COVID delays and therefore behind us.

I think the smaller case size is a worrying trend as i should imagine the costs of running a typical case are pretty constant regardless of its actual size; but this shouldn't effect the return.

My concern would be that the Insolvency Practitioners might have read Mano's results with interest and be extracting a few more pounds per case when they sell them on. Just a thought: I have heard nothing to suggest this and it may be off the mark but I saw something similar happen to Arrow Global group who used to buy defaulted consumer debt from banks - lo and behold after it went public and the returns they were making (typically 3x MoM) the price of buying that debt rose and the returns fell.

Fair comment. Also it should be reflected in the price they pay to invest in a case, so it only affects ongoing cases for which higher prices were paid.

As I've said, I'm only interested in MANO because I think it could be a good investment. One fo the problems is that it is fundamentally unforecastable. I plugged the first half numbers into my model and with a few positive tweaks I pushed FY24 EBIT up to £5m, still way short of Peel Hunt's £8m.

I also noticed, looking back on old vintage charts that the RoI and MoM returns have been coming steadily down:

2019 180% 2.8x

2020 174% 2.7x

2021 169% 2.7x

2022 153% 2.5x

2023 121% 2.2x

This is a bit concerning.

There is one aspect to this business that is seldom mentioned. There is some economic momentum to it. If, for example, the economy takes a downturn and, probably more importantly, house prices fall and housing transactions dry up, then recoveries are going to be lower which obviously lowers returns. Because MANO's cases are generally quite short duration this should have only a short term effect but I definitely think it's a drag that hasn't really been talked about.