Member Info for StreetsJ

My experience of MANO is that they are far too optimistic. I published a research report on them in August 2021 (so after COVID disruption was well known.) Cooklin said my numbers were far too low. I forecast, for FY22, 17.5m of revenue, 7p of EPS. And for FY23 £26m of revenue and 21p of EPS. They made £10m and 4p in FY 22 and £15m and 3p in FY23.

The tone of the statements is always bullish. The covenant breach was almost certainly due to this overoptimism

I wouldn't bother with the company if I didn't think it was interesting, but I'm far from convinced that it's out of the woods yet.

I have access to Refintiv (Reuters as was) and only peel Hunt's forecasts are there. No mention of Canaccord. According to Refintiv the Peel Hunt numbers were "reviewed" yesterday but not one of them changed. Including Revenue for FY24 of 13.8m - which is clearly nonsense as they reported £11m for the first half. And EBIT of £8m, EPS of 11.8p which both also look completely wrong in the other direction after £1.6m and 1.4p in the first half.

My guess is that Peel Hunt have lost interest (at £75m and with little or no trading it's too small for them) and Canaccord have pitched for the brokership with a very bullish report. I may be wrong, and often am.

I'm no expert on bank covenants but typically if you breach them the bank will take its pound of flesh: extra charges, higher rates. I don't think it's that serious but it's always bad sign when a company breaches its covenants unless there is a completely unexpected event. It suggests that things are not going as planned or the planning has been poor.

Why no comments on the day of the results?

Did you see that they breached their banking covenants in the half year. or was that already news? I wonder if that was what was driving the share price down?

So EBIT was £1.560m down from £2.136m in H2 23. In the trading statement this was described as "marginal". I don't call 27% "marginal". Maybe it's the £600k which is marginal. Peel Hunt still haven't changed their numbers: they have EBIT for FY24 of £8m. I can't see that happening from here.

Another 10k today.

Business failures hit 14-year high, says the Times. New data confirms that insolvencies are on the rise. Mano has been beefing up for this and yet the shares have drifted back to their lows. That's generally not a good sign: when good news is ignored. Perhaps the problem is that the volume may increase but recoveries will be lower because of the poor economic backdrop (and falling property prices).

Another concern - though it may be entirely innocent - is that Peel Hunt have not updated their forecasts post the upbeat trading statement. Why not? They haven't even confirmed their old forecasts. My expectation is that numbers for 2023/24 are too high. Peel Hunt is forecasting £8m of EBIT. The trading statement implied they would make c£2m in 1H, which requires them to make £6m in 2H. Not impossible but would be their second highest half ever.

I think this is a good/interesting business but there's plenty of time (and quite possibly downside) before I want to invest.

With a market cap of just £66m it's very unlikely to get onto any institutional lists. On the other hand it only needs one institution to start buying...but there is no liquidity so they wouldn't be able to get a decent sized position without moving the share price significantly against themselves. It's going to be a long haul of individual investors gradually cottoning on to the recovery story. (The economic background is not helpful for the market as a whole either however irrelevant it is for MANO*; nor is the suggestion of the removal of AIM relief in IHT which now seems to be on Labour's agenda.)

I did learn recently that it isn't entirely irrelevant to MANO: the amount they can expect to recover from dodgy directors decreases if the economy/housing market tanks.

Peel Hunt's forecasts haven't changed since June. They have MANO making £8m of EBITDA in FY24 and £10m in FY25; equal to 11.8p and 15.1p of EPS. I guess most people on here would think that was cheap (I do). The problem is that there is no reason why it can't get cheaper. It can just as easily trade on 8x FY25 eps or even 7x. 7x is 105p. I'm not saying it's going there but this (160p bid) is no floor. The key will be the next change in forecasts. If they're trimmed, even a bit, it's still going down. If there's a confident reason why they can be raised, we might have seen the bottom. The interims won't be until November. I think I'm going to wait. No need to try to catch the bottom.

I wonder if anyone's selling AIM shares ahead of any (v unlikely in my view) changes to the IHT rules that removes the attraction of AIM.

It's certainly strange. It's behaving as though there is negative news to come but the outside forces still all seem pretty positive.

I think there is a bigger, macro problem: there is simply no money flowing into smaller companies so it doesn't matter how undervalued something is there is no money to push shares back to fair value. It will change at soem point but that may be some way off.