MPG - Metro Performance Glass

[Shareguy]

Shareguy .....your 'issues' probably highlights why Metro is in state it is today.

Total lack of control and commitment from top to bottom. Suppose that's how a company goes from being privately owned worth $360m only 16 years ago to being worth $30m today

Chair Peter Griffiths performance at last years ASM was appalling. He and Mander denied things were bad and nothing was their fault.

Time to go back to basics with a new team

Agree Winner.

Also they have had plenty of time to sell the Australian business and no announcement. Maybe the offers are not there. Or more likely to low.

[Popeye]

Agree with all of that.  Metro would be better going private with laser focused owners running the cutter.  Boards add nothing at this scale, they get consumed by "governance" initiatives and listing obligations. 

Not sure the board is doing existing shareholders any favours by taking the "substantially undervalued" line either, but then if they admit that 18cps is as good as it gets they would be damning their own performance.  Maybe I am wrong and they will squeeze a couple more cents out of the offer through the ritual negotiation dance. 

It is one thing to cut off a gangrenous limb to save the body, but if the only way to satisfy the banks is to liquidate the most promising business unit it means the banks have given up on the business and dont care if they leave a listless husk so long as they get their money back...

I feel for the shareholders who have kept the faith with this business.

After suffering numerous quality issues that just seem to go on and on. I suggest that the company's board and senior management needs a total clean out. Doing the basics the best is what's needed in my opinion. Quality checks at each process with individual sign off for quality accountability.

Sending panel after panel and even installing them with clearly visible damage tells me that their internal quality control is broken.

Why was the damage not picked up in

the factory
when it was loaded on a van
installed in place
rubbers installed

Systemic failures in quality control and poor communication which I think will be widespread.

Selling the profitable Australian business that offers huge growth, to me is an admission that they are unable to trade out of the debt issue.

Maybe the 18 cps might in hindsight be a good deal. The low offer was made for a reason.

Good luck to holders

[Gerald]

Shareguy .....your 'issues' probably highlights why Metro is in state it is today.

Total lack of control and commitment from top to bottom. Suppose that's how a company goes from being privately owned worth $360m only 16 years ago to being worth $30m today

Chair Peter Griffiths performance at last years ASM was appalling. He and Mander denied things were bad and nothing was their fault.

Time to go back to basics with a new team

I went and had a look at last year's AGM on their website, good entertainment if anyone has the time. A Mr Bruce had a good go at them but seemed like water off a ducks back.

[winner (n)]

Updated chart below of Metro NZ sales v NZ Building Activity ex Stats NZ. Building Activity used a market proxy which Metro often uses in their presos so must mean something

Tells one sad story

Listed in 2014. Share registry included the regular instos - NZ Super, ACC. Jarden, Harbour, Salt, Milford etc

The 'influence' of these instos demanded they grow and then grow more. Put pressure on Board to do things to grow. Thus the Australia acquisition in 2016.

Sales through to FY17 were respectable (see chart).  At least sales were keeping up with overall building activity even though margins were coming under pressure

At end of 2017 CEO Nigel Rigby left. He'd been CEO for 5 years (pre IPO) and by looks of chart hadn't done a bad job. Coincidently Rigby left not long after Peter Griffith became Chair. Read into that what you want.

Since then it's been down hill ever since for Metro. Declining NZ sales and profitability and Australia taking a while to sort of come right.

The instos have one by one deserted the sinking ship ....that alone says something. Now Masfen, Wells and Bain are left holding a sick baby.

Lesson - a successful company like Metro that was under private control for any years is not suited to be owned and unduly 'influenced' by demanding shareholders (read instos). Wells has recognised this and probably one reason why he wants to take control and run it accordingly.

Sad really - one telling fact is NZ sales are about the same level as they were back in 2008. No wonder a business once worth $360m now only worth $30m

I wonder if Griffiths and Mander reflect on that.

[Shareguy]

Updated chart below of Metro NZ sales v NZ Building Activity ex Stats NZ. Building Activity used a market proxy which Metro often uses in their presos so must mean something

Tells one sad story

Listed in 2014. Share registry included the regular instos - NZ Super, ACC. Jarden, Harbour, Salt, Milford etc

The 'influence' of these instos demanded they grow and then grow more. Put pressure on Board to do things to grow. Thus the Australia acquisition in 2016.

Sales through to FY17 were respectable (see chart).  At least sales were keeping up with overall building activity even though margins were coming under pressure

At end of 2017 CEO Nigel Rigby left. He'd been CEO for 5 years (pre IPO) and by looks of chart hadn't done a bad job. Coincidently Rigby left not long after Peter Griffith became Chair. Read into that what you want.

Since then it's been down hill ever since for Metro. Declining NZ sales and profitability and Australia taking a while to sort of come right.

The instos have one by one deserted the sinking ship ....that alone says something. Now Masfen, Wells and Bain are left holding a sick baby.

Lesson - a successful company like Metro that was under private control for any years is not suited to be owned and unduly 'influenced' by demanding shareholders (read instos). Wells has recognised this and probably one reason why he wants to take control and run it accordingly.

Sad really - one telling fact is NZ sales are about the same level as they were back in 2008. No wonder a business once worth $360m now only worth $30m

I wonder if Griffiths and Mander reflect on that.

Wow that graph certainly is telling. Thanks for posting.  I wonder if Wells and co are better off waiting to see what happens. They might get it even cheaper.

[Popeye]

Wow that graph certainly is telling. Thanks for posting.  I wonder if Wells and co are better off waiting to see what happens. They might get it even cheaper.

Yes very suggestive graph and astute follow up comment. 

The Board are acting as if Wells et al are trying to steal the company.  I think they should be alert to the prospect that they are in fact needed to save the company.  Exhibit one is their Plan B - sell the most promising half of the company and hope the banks dont wind you up.

If I were Wells I would not offer any more money, and just let them stew.  Taking over this business in a softening economy you dont want to overpay... 

[Ferg]

Nice graph and commentary winner.  Thanks for sharing.

[winner (n)]

The Vulcan man resigned as Director of Metro

He had to eh

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/415115/398954.pdf

[Waltzing]

https://www.nzherald.co.nz/business/buyout-boom-whos-coming-after-kiwi-companies/PTQBTWUQ5FFYVC37NPD4AR5V4I/

[Arbroath]

Debt down from $60m to $55m in 3 months and AGG still pumping...always interesting to watch a company when there are predators about.  There is a miraculous improvement in shareholder communication and timely information. 

If AGG can make a consistent A$6-8m ebit what will the best offer be?  A$35-40m? That would make a serious inroad into the Group debt - bring it down below NZ$20m and reduce their finance cost by several million a year.

[Left Field]

Independent Director Graham Stuart voted off the MPG Board at today's ASM as angry investors questioned the sale of MPG's Australian business.

(RNZ News)

[winner (n)]

Independent Director Graham Stuart voted off the MPG Board at today's ASM as angry investors questioned the sale of MPG's Australian business.

(RNZ News)

...and not wanted at ERoad

Graham has a bit of spare time coming up

[Ferg]

Meanwhile we are observing the 'wholesale destruction of wealth'....although now MPG is trading at 13.5c it is more like a corner dairy worth of wealth destruction.  That 18c offer might look good in hindsight.

https://nz.finance.yahoo.com/quote/MPG.NZ/chart?p=MPG.NZ

"Are we there yet?"

[Basil]

Amazing how a company can have half of all the glass market, could say dominated the market for many years and yet the shares have gone from over $2 in 2016 to penny dreadful status today.  What on earth happened to all the capex on plant modernization and streamlining of systems e.t.c. shareholders were promised would deliver results.  How on earth did it go so wrong ?

[Shareguy]

Another director resigns with immediate affect.  Is Bad news coming.....

https://www.nzx.com/announcements/421388