Member Info for TheTrotsky

It's not wholly unusual for director/shareholders of private companies to have overdrawn directors' loans for tax reasons (the tax on capital gains being less than the dividend rate of tax for higher/additional rate tax payers). The loan owed by the estate will be repaid as part of the sale.

It should be noted that the manufacturing facility is not owned by Ambala Foods but was rented from the deceased director at £100k per annum.

I think the acquisition has legs. The senior executives and many of the existing franchisees are from the Asian community and understand the Mithai business better than you. The giving of Mithai as gifts is very popular in the Asian community and I have Asian friends who will make round trips of several hundred miles, several times a year to stock up on Mithai, for both gifts and personal consumption, in Birmingham/London (because they can't be obtained locally). I can also attest to Mithai being very tasty and moreish. The Mithai won't be made fresh in shop but rather packaged and manufactured in the factory and sold via CBOX's existing shops or the internet. I also wouldn't be surprised if CBOX sold all or some of Ambala's freehold shops to new/existing franchisees to help pay down the debt. I see the acquistion complementing CBOX's existing business.

Also, by my reckoning, based on the placing/retail offer and the bank loan, CBOX's existing cash resources will remain more or less intact (after allowing for the timing of some receipts and payments that may arise after completion).

TBT, You're becoming a bit of a boor. Everybody, I mean everybody, knows that you think this will drop to 4p. Everybody also knows that you intend to either fill your boots, close out your short or both, if and when the sp hits 4p. Give it a rest. You're not looking for debate. Your're just cruising for a bruising, and in the real world you'd have been drummed out of town for repitition ad nauseam. Change the record.

"TPT and PT operate on similar margins !! Are you having a giraffe?"

A clear example of you not knowing the difference between gross margin and operating margin.

For example, there's c$13.1m of non-cash, stock-based remuneration.

We're talking about American executives here. Need we say any more? They tend to treat companies like their own personal cookie jar!

Where do you get your dividend figure of 43p over the next 12 months from? Are you including shares buy backs?

Based on the latest consensus forecasts I can find, MNG is expected to pay c20.1p in dividends over the next 12 months - a c13.4p FY24 final dividend plus and a c6.7p FY25 interim dividend.

You clearly don't appreciate the difference betwen gross margin and operating margin; which begs the question what you understand at all.

Allfista, Why don't you actually learn to read! The accounts have repeatedly stated that TPT and ProTiler have similar OPERATING margins. Doh!

Do care to enlighten us how tiles are delivered nationwide. They are heavy and fragile, and if you are re-tiling your kitchen or bathroom are going to be quite voluminous. Even if online sellers are trusting delivery to the likes of Evri, Yodel et al, the cost of packaging and delivery is going to high (when you've factored in distance and weight).

Investors better hope that the market does indeed interpret this as good news because the UK sp is currently trading at a c50p premium to last night's closing US sp. One suspects the UK sp is just treading water until the US markets open this afternoon. The real question is whether the sp was being deliberately depressed by "actors" hoping to pick up additional shares through the Maverick acquisition (the "good news" interpretation) or whether the maket genuinely dislikes the acquisition regardless. The truth of the matter is that the more wells DEC acquires the more of a potential issue the ARO becomes.

Also, does this morning's RNS actually stack up? On the face of it the value of the share consideration, based on last night's US sp close, is already c$100m less than it was when the transaction was announced on 27 Jan and I can't imagine that EIG are too pleased with the current state of affairs. Rusty says the share consideration is not and will not be impacted by any movement in DEC's share price, seeming to imply that no additional shares will be issued to make up for any shortfall and that the overall value of the share consideration will therefore reduce accordingly. But is that what he's actually saying? The share consideration has three elements - debt, shares and cash. Assuming, based on Rusty's pronouncement this morning, that the number of shares aren't to be adjusted, could the debt or cash still be adjusted to account for the shortfall in DEC's sp? To me the answer seems to depend on how you might interpret Rusty's statement. In any event, it seems unlikely that DEC would want to stump up additional cash but it does appear feasible that DEC could assume more debt; the transaction mechanism does, in principle, allow for this. I'm not sure that such a change would be entirely ruled out by the wording of today's RNS.

Alfista, You still don't get it. Both TPT's stores and ProTiler generate similar operating margins. TPT don't sell tiles through ProTiler; they only sell tiling accessories. The reduction in tiling accessories stocks in-store has created additional space to expand their range of tiling/flooring products. I would imagine that a lot of TPT's online sales are fulfilled from stocks held in-store, rather than at a central warehouse. Trying to fulfill UK-wide online sales from a couple of central warehouses can be very expensive (you can't just pop the tiles in the post); you will probably have to deliver small pallets of tiles all over the place using dedicated delivery vehicles. It probably works okay within the M25 but beyond that the logistics become more difficult. Also, are their stores high priced? Because their tile offering is unique (only to be found in TPT stores) it's difficult to make a direct comparison of their tile offering with a competitor's solely based on price. You have to factor in other metrics such as quality, service, storage, delivery times, volume discounting etc. The fact that most of TPT's tile sales are made to trade buyers would suggest that these additional metrics are just as important to them as price. Finally, to say that the strongest growth sales has been online is slightly misleading; it's easy to grow sales "exponentially" from a very low base. Clearly online sales have been grabbing market share but it remains to be seen whether online sales can grab the majority of the tile market. Because of the touch, feel, look bias, I think online retail/trade tile sales will only ever be a relatively small but nevertheless material sector of the tile market (I would imagine that 60-80% of retail/trade tile sales will still be done in-store). Builder/architect sales on the other hand tend to lend themselves being addressed online. These are not sectors that TPT has historically had a large presence but they are trying to address that through the acquistion of CTD.

Nonsense, I have no evidence to support my assertion but I wouldn't be at all surprised to find MS Galleon (MSG) trying to manipulate the share price to their advantage with a view to trying to make a lowball offer for TPT in due course. E.g. MSG could be lending stock to shorters and/or through sales/repurchases. My understanding is that MSG only has to notify the market if its current holding passes 30% or if it falls by more than 1%. That gives MSG c2m of shares to "play with" and, in theory, enable it to place relatively large sales (100-500 thousand shares at a time) to destabilise the sp and then buy back them back in much smaller tranches over a period of days, weeks or even months. All MSG needs to do is sow the seeds of doubt in the market. At the end of the day, if you intend to buy out the company (at a lower price than it would otherwise be), short-term price falls are irrelevant.

Alfista, Do you think that online retailers don't pay business rates and NI? As regards energy prices, they do affect TPT but not as massively as you appear to suggest (they're actually heading into the summer where their energy costs are generally lower). TPT has remained profitable and operating cash generative. It's cash reserves have been reduced by acquistions and investment in the last 12 months but these will reap future dividends. I never said that making online sales was a bad thing but I firmly believe that the bricks and mortar business is where the bread and butter is (even if it's only to provide a shop window for sales concluded online). TPT has a unique tile offering (competitors may have similar products but not exactly the same - unlike, say, the electronics market there are still a multitude of suppliers) and most customers (not all) still want to touch, feel and see tiling/flooring before they buy (because they tend to be a major outlay on any refurbishment).

Meconopis,

It's worth noting that the CSM pool, as far as I'm aware, relates to AV's long-term pension business. AV is placing increasing emphasis on growing it's capital-lite general insurance businesses and, as such, it's probably inevitable that we might start to see some decline in the CSM pool as the business emphasis shifts more towards short-cycle profit generation. However, in reality, the CSM pool will never likely be fully utilised, just moderated/maintained, as more, but not all, of AV's capital is re-invested into its capital-lite general insurance businesses rather than its capital-heavy pension business. Also, it's worth pointing out that at the current (supposed) rate of decline (net c£108m), it would take c72 years for the current CSM pool (c£7.77bn) to become fully utilised.

If a bid was to be made for FTC I'd suggest that a bid from BAE, rather than SpaceX, would have far more commerical logic.

Acceptable to UK government - UK acquirer with an existing presence in civilian, defence and space markets.

Not suggesting that a bid will be forthcoming but I think a bid form the likes of BAE makes far more sense than SpaceX.

Why TPT? It seems strange that, of all the shares you might have alighted on for your first/only investment, you would have chosen TPT, unless you are an employee. It's hardly a go-go share at the moment and in the current economic environment it's hard to call the bottom of the market (I rather suspect that we still have some trouble ahead).

Some of us have been here a very long time. Pre-COVID and what has subsequently followed I though that TPT had at last turned the corner (even added a few in prospect of a sp recovery). I originally bought my shares before the 2008 financial crash and it had taken c10 years to unwind the folly, in hindsight, of borrowing to return capital to shareholders at the top of the market before everything went pearshape ;-)

The investment bankers certainly earned their corn when they persuaded the BoD to borrow to return capital! At the time, the borrowing costs were less than the dividends on the shares repurchased and everybody in the investment community was talking about the world-wide "Goldilocks" economy. 2008 was a wake up call and I learned a very painful investment lesson. Namely that investment bankers are even more clueless than the rest of us and are just flying by the seats of their pants, making hay whilst the sun shines and leaving the rest of us to pick up the tab for their greed when the sun eventually goes in. I knew that they were totally unscrupulous after the 2000 tech bubble burst (in any other walk of life a good few of them would have been locked up for outright fraud but in the investment world they just get a slap on the wrist) but I never imagined that they couldn't read one end of a balance sheet from another.

It's jaw dropping how many purported financial "experts" seem totally incapable of even adding up two plus two! I used to work in tax and once dealt with a senior audit manager (beggars belief) who couldn't post trial balance adjustments; I had to explain to him that income and expenditure adjustments didn't just get posted to corporation tax! We weren't talking about pennies either; if I recollect the net adjustments amounted to several £million (might have been below the group's level of reporting materiality but nevertheless totally inept). He even had the temerity to pass off the correct adjustments that I'd given him as his own! I'm not bitter ;-)

Exasperating to say the least!

The basic tenet of my post still applies. Ten (now eleven) posts, all on the TPT bb. Hmm!

Can't deny that the sp is down. Since Covid the general economic climate in the UK has been as bad as I can remember over the last 30-40 years (the early 90s weren't too clever). Piotr has attacked the management but there have been a succession of external events beyond their control that he's conveniently chosen to ignore (and with Trump's re-election the bad news seems to just keep on coming) and, as far as I am concerned, he lost all credibility after he tried to force TPT to buy at least 30% of its tiles from MS Galleon. If he wants to dictate what TPT buys then he's got to make a credible offer for the c70% of the shares that he doesn't already own (not try and circumvent control issues and siphon off profits for his own benefit).

Also, can't deny that online pure plays have been making inroads into the tile market but it's easy to double/triple sales from a very low base; that doesn't mean that they are all profitable (most aren't). TPT's own online offering is now growing well and although it may not be doubling/tripling each year, that's to be expected when online sales have already reached £30m in FY24. I think the acquisition of CTD was a good opportunity and opens doors into new business sectors. Piotr says that TPT overpaid but methinks that's just sour grapes. It would likely have taken TPT several years, starting from scratch, to build up an equivalent level of sales in these new business sectors, not to mention the inevitable start-up cost (building new relationships is never easy or cheap). The fact that the CMA have competition concerns about only 4 out of the 30 CTD sites acquired is a positive rather than a negative.

The CMA does appear to be micro managing. It doesn't normally concern itself with a business that has a dominant position in a few locations. I'm sure the four locations in question aren's the only locations in the UK where perhaps just one or two retailers have, by happenstance, managed to build up a dominant market position. It happens. The CMA should really only be interesting itself in the UK picture as a whole and it would appear that it does not have any grounds for concern on a UK-wide basis. I think that a compromise wil be reached.

Dividend growth is set to decline BUT returns to shareholders (including share bubacks) are set to increase. UK investors are not great fans of share buybacks but overseas investors, particularly in the US, prefer them.

If you follow the "dividends being paid out of debt" logic through to its natural conclusion then nobody should ever take a holiday, buy new clothes, go out for a meal or invest their money ("discretionary" spend) if they have an unpaid mortgage and yet most people do. Funny that ;-)

PHNX's cash and cash equivalents exceeds its debt and most of its debt is long term, fixed coupon (the debt hasving arisen from previous acquisitions). Periodically PHNX retires some of its debt if it has suprlus working capital and the cost of debt exceeds expected, future ROCE. Like any good household, PHNX manages its debt to maximise its returns for its investors.

That's a very diverse portfolio of shares you own Whatsgoinon.

Only 10 posts and all of them on TPT. Hmm! On yer bike Piotr!