pike fisherman
05 Jun 2018
Re: Puzzled S-SIPPPlease contact Melrose for me and tell them how good I am!!!Let’s put this to bed once and for all. The last part of my career, which ended a few years ago, was as a business development consultant to small companies - IT, engineering, etc. In that capacity I sifted through all the material they supplied - accounts, sales, etc, and interviewed their their customers. Necessarily, the work was detailed and my recommendations extrapolated from my research.Melrose, happily, supply a lot of information that is in the public domain - Annual reports, presentations, pre-acquisition analysis, etc. Plus over the years there have been masses of media articles on both Melrose and its predecessor Wassall Plc. And it’s directors. Anyone with an enquiringly mind can easily find the information, analyse it and come to the same, or similar conclusions as me. It really is quite simple. It just takes time. It is something I really enjoy.Re percentage of sales, work it out for yourself. I imagine the most recent GKN and Melrose Annual Results, published a few days apart would be a good starting point.
Speculative SIPP
05 Jun 2018
Re: Puzzled pike fisherman,Your directors must think very highly of you; I can certainly think of one company I used to work for many, many, years ago who would have fired you on the spot for continuing this conversation!My shareholding in Melrose came through my shareholding in GKN. During 2014 and 2015 I bought a reasonably decent shareholding in the company because I considered that it was a high class company that was intrinsically undervalued. However, even though I had averaged down a couple of times and I had been in profit at various times, in January I was holding at a loss. That changed with the Melrose bid and I took some profit as the shareholding had become one of the biggest in my SIPP. I also took maximum cash when Melrose won the bid. However, I now have a reasonable shareholding in Melrose and I was not sure whether to keep it or sell it. Having now read this thread and, in particular, your comments I have decided to keep it.I have one simple question; being very lazy and not wishing to read through lots of accounts could you tell me what percentage of Melrose's turnover will be accounted for by what was GKN?
pike fisherman
05 Jun 2018
Re: Puzzled NB, at last we agree completely.The Dana deal removed the last vestige of trust in the board for many investors. It was a huge mistake and proved very expensive.The good things about the Melrose directors are1 They are confident, strong and know what they want to do2 They will listen to the people running the GKN divisions and work with them, not against them.3 They are not encumbered by GKN being listed4 They are used to succeeding, both as Wassall Plc and Melrose.5 They will make the decisions, particularly on capital allocation, quickly and effectively.6. They will do everything necessary to build the divisions and not be held back.All of these aspects seem to be the opposite of the old board. My best guess is that Driveline and Metallurgy will grow quickly and be sold to trade buyers. Aero, I think, might be refloated and left for the next management to handle the political problems of an eventual trade sale.
numberbiter
05 Jun 2018
Re: Puzzled Pike, for once I agree with you. These corporate advisers are taking the pi... They charge millions of pounds and what do they achieve - diddlesquat!I would go further and suggest that if the ploy to sell a GKN division to Dana was on 'advice', then someone has been negligent. In my view the proposed sale to Dana was the tipping point that gave Melrose the advantage.But as you say, Melrose has inherited a mess; the Melrose management team have a job on their hands!
pike fisherman
01 Jun 2018
Re: Puzzled The relevant part is“Melrose counted the cost of its high-profile bid battle for GKN on Tuesday after discovering a shock £107 million bill chalked up by former GKN management to fend off the takeover.The turnaround firm, which clinched the deal last month, said ex-GKN bosses had spent £27 million in extra banker fees to sell its car axles business to US rival Dana in an effort to repel Melrose. “The splurge was on top of £80 million dished out to advisers UBS, Gleacher Shacklock, JPMorgan, Brunswick and FTI to defend GKN from Melrose. A further late supplier payment of £150 million, not included in GKN’s figures published in February, helped send GKN’s debt soaring by £235 million to £1.12 billion. “The £27million was fees paid by GKN to Dana’s advisors to take it over. Amazing!!!?
Yertiz
01 Jun 2018
Re: Puzzled That's 'old' news from April, but still begs the question of how badly the BoD ran GKN to run up such a massive bill? They really should be held to account and pay back part of the fees incurred, after all it was only 'protection money' from the company - trying to protect their own backs, jobs, reputations. All of which are now shot to pieces.
72_fastback
01 Jun 2018
Re: Puzzled Yes, the GKN board did quite a number trying to keep their jobs![link] MRO can whip GKN into shape in fairly short order.
nick2name
31 May 2018
paddy power debts are low cos paddy power did not take over betfair
pike fisherman
30 May 2018
Re: Puzzled NB, how perceptive of you. You’ve found me out. Yes, I am a Business Analyst with Melrose. And I have had my wrist smacked for releasing such information.Or are you living in La La Land. Obviously the latter.If you had done detailed analysis of Melrose, Nortek, and GKN FROM ALL OF THE AVAILABLE SOURCES you too could have written my post.As for the “next accounts .......” that is extrapolated from the GKN Trading Update and the revelation that GKN paid Dana’s fees for the ill-fated takeover, something that wasn’t announced to the market or GKN shareholders.Hence those figures will come up in the next accounts.Easy really if you just apply common sense.
numberbiter
30 May 2018
Re: Puzzled "next accounts will include expenses hidden from Melrose and in fact all investors."Pike, I had always assumed that you work for Melrose, but now it is obvious you must have a very senior position there. Only someone at the top could have provided the detailed information set down in your last post. That would explain why you so persistently support the company. I hope it all works out for you. All I am doing is pointing out to novice investors that although you might be right, Melrose is a high risk investment (because of huge debts). There are much safer bets (excuse the pun!) such as Paddy Power Plc recommended at £68.50 and now £91.
pike fisherman
30 May 2018
Re: Puzzled Yes, trend is up. Lots of good news coming out of Melrose companies. Easy to find fault under the previous GKN management who were a shambles.
Hardboy
30 May 2018
Re: Puzzled NB, you may be good with numbers, but not so sure about your reading trends: "Melrose is still going down."I would say over the last 6 months it has been going up.
pike fisherman
29 May 2018
Re: Puzzled NB Please excuse me if I am positive on Melrose. Number of reasons.First, GKN performance was under the old board. Expect an increase on operating profit margin. that is what Melrose do.Second, next accounts will include expenses hidden from Melrose and in fact all investors. This may cause a one off blip. This is already known.Third, Nortek not taken into account which is increasingly profitable.Fourth, all new debt agreed before acquisition at good rates. Also the ability to raise extra funds through rights issues which have always been oversubscribed.Fifth, support of institutions and banks.Sixth, expected sale of Ergotron which is in the early stages, and probable sale of the rest of Nortek in the next couple of years.Seventh, sales of small parts of GKN as stated in prospectus.Eighth, increasing relevance of GKN Metallurgy both in intellectual property, turnover and potential sale.Ninth, increasing projected growth in Aero and Driveline, particularly in China, and electric vehicle.Tenth, strong and increasing intellectual property portfolio.Eleventh, unknown new products/markets as suggested recently.My personal opinion is, unless there is a recession, GKN as a company and Melrose as a whole have a good future. Regarding aggressive accounting, my experience of Melrose is that it is a pretty conservative acquirer and knows exactly what it is doing, unlike the likes of Carillion and Conviviality.A relative, who works for a competitor of Carillion says that all companies in that sector could fail because they expanded too quickly by debt fuelled acquisitions and competition is really cut-throat.
pike fisherman
29 May 2018
Re: Puzzled Carillion and Conviviality are totally different types of businesses. I think you will find that in the first instance The Carillion board were totally incompetent and basically lied to the end market. They were. In a very competitive market, we’re not market leaders, and not in growing markets for their products and technology.Conviviality was/are in a very competitive market and over-reached themselves. Their type of company is regularly in trouble.
pike fisherman
29 May 2018
Re: Puzzled What sort of unforeseen events are you talking about?
