Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I find your reaction bewildering, it’s just one of those things. On the (very) positive side, Manolete deem a case with a headline value of £15m has got such merits that they’re willing to change their trusted long-term auditor to persue. Why does it matter to shareholders who the Auditors are?
I don’t think those are the only 2 options. They expect to receive £13.5m from the ‘Cartel Cases’. This will in effect remove all debt and provide a small cash surplus of £1m. The recent accounts show they are continuing to increase the value of their investments without continuing to absorb more cash. Hopefully the £13.5m will be received sooner rather later , then the ongoing cash generation should naturally increase as the ongoing investment in new cases begins to positively impact upon cash flow.
From YE19 to 09/23 the company has absorbed £21.7m of cash, going from net cash £9.7m to net debt of £12m. The cash has been used to grow investments and absorbed into the working capital cycle.
During this period Net Assets have grown from £32.2m to £65.3m - an increase of £33.1m / or £7.35m PA. This equates to a Compound Annual Growth Rate of 17%.
Current ‘Market Value’ is £63m, it gives me comfort that the TNW is growing and is higher than current Market Value.
Trade and Other receivables (Asset)
2019 £3.8m
2023 £24.3m
Owed an extra £20.5m
Trade and Other Payables (Liability)
2019 £4.2
2023 £12.5m
Owe an extra £8.3m
Working Capital has been negatively impacted by £12.2m during this period - which explains where a significant amount of cash has been absorbed. This doesn’t overly concern me as they are undergoing an expected growth period, at some point this will plateau and cash will stop being absorbed to such a degree into the Working Capital Cycle.
‘Investments’ during this period has risen by £21.2m from £18.2m to £39.4m reflecting the increased investment and growth strategy and a good pipeline for the future. I expect this rate of growth to increase in the coming years as larger cases and more opportunities are emerging.
Within this £39.4m is £13.5m of ‘Non-Current’ assets relating to the ‘Cartel Cases’, as it was ‘Non-Current’ I presume the earliest in which they see this to be settled is H1 2025. This cash will help alleviate the current reliance on the HSBC revolving credit line / improve the net cash/debt position.
Annual realised revenue from FYE19 £7.148m to FYE23 £26.79m is an annual compound growth rate of realised revenue of 39.14% during this 4 year period.
Areas to monitor;
1. Bad Debts. £0.4m for the latest period and £1.5m FYE 03/23.
2. Increasing interest/ financing costs, at full utilisation this would equate to £2.5m per annum (this alone if paid as a Dividend would equate to a 3.8% return versus current market value). They need that Cartel money in to reduce the debt requirement in the short/medium term. If the Cartel money doesn’t arrive in the next 2 years I think they’re could have an issue with cash flow required to fuel the growth trajectory.
3. Fluctuations in ‘Case Fair Values’; For the latest 6 months they have devalued by net £2.3m equating to roughly a 8% devalue in one half year, this follows a similar net amount of £2.4m FYE 03/23 and £2.7m FYE 02/22. I hope they’re being prudent for the short term and this doesn’t become a regular trend - however a net devalue of Case Fair Values (excluding Cartel Cases) of £7.4m over the last 2 1/2 years isn’t ideal and worth monitoring and continuing to question.
4. Increasing staff and admin costs / Margins.
I’m satisfied that demand will continue to increase and they’ll be presented with bigger sized opportunities in the next few years. I’m confident of the
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Another case success for Manolete Partners, our legal team and Engin Faik from Cornerstone Business Recovery!
MANOLETE PARTNERS Plc brought a claim against Mr Mukitur Rahman, alleging that he misused company funds belonging to Wellmet Limited following an assignment of claims which took place on 21 October 2019.
The trial took place from 14 to 16 March 2023. The court declared that the Defendant had misapplied company funds and ordered him to pay MANOLETE PARTNERS Plc the sums of £509,450 and £127,000, with interest compounded at a rate of 2.5% per annum. The Defendant was also ordered to pay our costs and an interim payment of £121,454, and his application for permission to appeal was refused.
Congratulations to Raj Arumugam of 5 Stone Buildings and Frank Brumby from Isadore Goldman who acted for MANOLETE PARTNERS Plc. Another success story for Ronan Butler!
Credit to the team for working together to deliver a fantastic result.
This case demonstrates the fantastic success which can be achieved when an Insolvency Practitioner, Solicitor, and Counsel work together with Manolete.
Another encouraging article. In the article it states the Market Cap as £93m at the time it was written therefore being written when share price was at approx £2.04 so a ‘Five Bagger’ (as they refer to a possible 500% increase) would mean they have a target price of £12.24 to achieve 500% increase, unless I’m missing something? It would of been much easier if the author has led with what price the shares were at time of writing.
I would imagine I will bail out before then and take my profit though!