MPG - Metro Glass

[winner69]

“Why hasn’t CEO been fired”

Disgruntled shareholder

[Rawz]

Thanks W69 and BP for the commentary. Feel like i listened in

MPG a sick puppy

[winner69]

Shareholder survey taken at ASM

“On a scale of 1 to 10, how do you rate the performance of the Metroglass Board and Management?”

The tone of that meeting I’d say they would be lucky to get an average score of 2.5 …after all nobody scores these things 0

[BlackPeter]

Thanks W69 and BP for the commentary. Feel like i listened in

MPG a sick puppy

Well, yes ... it certainly is.

On the other hand - and to conclude this somewhat on a positive note ...

I think this was certainly one of the more interesting AGM's I used to attend so far (and there have been many), both shareholder questions as well as board responses have been (mainly) constructive and appropriate ...

Chair was brave to stand through the session and thanked afterwards for the "penetrating" questions. Good stuff.

So - I think they will need some staff changes at the top incl. board to address some skill shortages and they will need to find a way to support their balance sheet ... but I don't see the company yet as a lost cause.

I don't see them as a get rich quick schema either ...

If board manages to address the mentioned problems, it will take time. If they don't address them, than (in hindsight) now might have been the best time for shareholders to run for the hills. Take your pick.

[BlackPeter]

Interesting to watch the depth:

Only trade during the AGM (and up to now) are 84 shares at 25.5 cents. This is a 2% rise of the SP compared to opening!

Lowest seller now offering their shares for 28.5 cents ... holders seem to be optimistic!

[Leemsip]

Thanks BP. commentary cracks me up.
MPG confirming dog status

[Sideshow Bob]

From Business Desk daily email:

Glass price inflation will crack 31% next month – Metroglass (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=cabdba60f8&e=3b6f9185d3)Metro Performance Glass, New Zealand’s largest glass processor, says residential and commercial builders should expect to pay more for glass on the back of imported raw product price hikes and impending changes to thermal code requirements.
The NZX listed firm said it will add another 5% price increase on its products next month, bringing cumulative price escalations to 31% over the past 12 months.

[winner69]

Interesting to watch the depth:

Only trade during the AGM (and up to now) are 84 shares at 25.5 cents. This is a 2% rise of the SP compared to opening!

Lowest seller now offering their shares for 28.5 cents ... holders seem to be optimistic!

Those sellers didn't get their 28.5 cents eh BP. Share price still 25 cents although it was heading lower for a time on Friday

One thing that struck me from watching that ASM was it seems that both Griffith and Mander don't really understand the market they are.

Answered questions about market dynamics, size, share, competitors etc with little conviction .... vague answers sort of made me think heck they don't know much.

Good point was the mumble about glass use doesn't go upto the same extent as consents / activity. A stupid answer that sort of said less glass in a house these days - with a bit of in depth knowledge of the industry would have said (confidently) 'Yes, dwelling consents have risen from 30,000 to 50,000 in the last five years but number of consents for houses have only risen 2,800 (13%). Most of the 20,000 increase has been for townhouses,flats and unit and when you think about there is a lot of common walls in those sort of structures and for most glass is only in front and/or back - hence of course glass use per dwelling is down.

Lack of conviction and body language when they say market share is still up there says to me it isn't

[BlackPeter]

Those sellers didn't get their 28.5 cents eh BP. Share price still 25 cents although it was heading lower for a time on Friday

One thing that struck me from watching that ASM was it seems that both Griffith and Mander don't really understand the market they are.

Answered questions about market dynamics, size, share, competitors etc with little conviction .... vague answers sort of made me think heck they don't know much.

Good point was the mumble about glass use doesn't go upto the same extent as consents / activity. A stupid answer that sort of said less glass in a house these days - with a bit of in depth knowledge of the industry would have said (confidently) 'Yes, dwelling consents have risen from 30,000 to 50,000 in the last five years but number of consents for houses have only risen 2,800 (13%). Most of the 20,000 increase has been for townhouses,flats and unit and when you think about there is a lot of common walls in those sort of structures and for most glass is only in front and/or back - hence of course glass use per dwelling is down.

Lack of conviction and body language when they say market share is still up there says to me it isn't

You are right - both came across as both rather honest as well as rather clueless.

Obviously not optimal, but not the worst thing either (which would be clueless and dishonest :) );

I guess the questions are:

1) is the cluelessness of chair (board?) and CEO already priced in? I think there is a quite capable organisation (though highly leveraged) below which must be worth something ...

2) How to best realize the underlying value?

[winner69]

You are right - both came across as both rather honest as well as rather clueless.

Obviously not optimal, but not the worst thing either (which would be clueless and dishonest :) );

I guess the questions are:

1) is the cluelessness of chair (board?) and CEO already priced in? I think there is a quite capable organisation (though highly leveraged) below which must be worth something ...

2) How to best realize the underlying value?

Who knows BP - might be OK in a year or two

That new Director Jenn Bestwick might sort things out ..... she was pretty excited how Metro did a job for her at the turn of century .... professional, efficient etc etc ....but back then Metro was privately owned and operated by guys who had glass in their blood and a great company culture .... pity private equity destroyed all that

Hope Mr Sheppard's journey across broken glass is company to an end.

[Sideshow Bob]

Another rubbish result coming, another review.....

https://www.nzx.com/announcements/402601

Metro Performance Glass commences organisational review

Metro Performance Glass (Metroglass) have undertaken a review of future activity scenarios in light of mounting economic pressures that are likely to affect the construction sector.

As a consequence, the board and management have initiated a cost out programme to ensure that the business capacity and resources are appropriate to service demand as the cycle changes. This includes a comprehensive review of its organisational structure and manufacturing footprint.

Staff consultation has commenced and the company is committed to providing support to all affected employees.
The initiatives are expected to achieve annualised savings, in the New Zealand business, in the range of $8.0 million to $9.0 million with benefits accruing from the second half of FY23.

Metroglass expects group EBIT for the first half of FY23 to be circa $5.6 million. Net debt is expected to be approximately $59 million. Interim results will be released on 29 November 2022.

[Rawz]

What a shocker. Has been discussed a lot on this forum that this is a dogs breakfast. Run. Away.

[BlackPeter]

Another rubbish result coming, another review.....

https://www.nzx.com/announcements/402601

Metro Performance Glass commences organisational review

Metro Performance Glass (Metroglass) have undertaken a review of future activity scenarios in light of mounting economic pressures that are likely to affect the construction sector.

As a consequence, the board and management have initiated a cost out programme to ensure that the business capacity and resources are appropriate to service demand as the cycle changes. This includes a comprehensive review of its organisational structure and manufacturing footprint.

Staff consultation has commenced and the company is committed to providing support to all affected employees.
The initiatives are expected to achieve annualised savings, in the New Zealand business, in the range of $8.0 million to $9.0 million with benefits accruing from the second half of FY23.

Metroglass expects group EBIT for the first half of FY23 to be circa $5.6 million. Net debt is expected to be approximately $59 million. Interim results will be released on 29 November 2022.


What a shocker. Has been discussed a lot on this forum that this is a dogs breakfast. Run. Away.

Can't help, but the way this is worded it sounds like a redundancy round coming.

If that's the case - if they do it well, it will bring up performance. All good for share holders ... and given the state of the economy and the low unemployment rate it might be as well the best time for affected employees.

Industry is desperate to find workers ...

[winner69]

Can't help, but the way this is worded it sounds like a redundancy round coming.

If that's the case - if they do it well, it will bring up performance. All good for share holders ... and given the state of the economy and the low unemployment rate it might be as well the best time for affected employees.

Industry is desperate to find workers ...

No doubt lots of people to go

But in essence its code for that new competitor who we won't name or talk about too much has taken a lot more market share than we thought they would ..... which is also code for we weren't really as good as we made out to be and customers went somewhere else

the irony of all this is that around the time of the IPO their EBIT margin was around 15% of sales - industry leading - and made the glass business an attractive one to enter and a new player emerged .... wonder how they are going?

[Sideshow Bob]

Share price actually up this morning!! :scared:

[winner69]

Share price actually up this morning!! :scared:

Market always likes lots of redundancies - signals greater profits ahead

Obviously ot worried about the debt increasing from $53m in March to $59m now

[Leemsip]

Slowmo train wreck... Management asleep at the wheel. My view is that redundancies probably arent the answer unless they have managed to streamline their processes and create efficiencies.

Sales still arent too bad at the last report, lol. Much worse for this company coming down the pipe I reckon, once sales start to slide into next year.

Need to raise like $30m equity or just chuck in the towel and give it to the banks.

Stunned we are still at 20c and $40m enterprise value. Would you pay $10m for this with a $60m loan outstanding?

[winner69]

At the ASM Bruce Shepherd suggest the Chair and his team learn a bit from Ray Dalio

I'd say that they ignored that advice ...body language at the meeting sort of implied they had never heard of Ray

And Bruce would not be happy with the debt mountain climbing to about $60m .... esp when they sort of said its going down ..... and probably will need to borrow heaps more to pay the redundancies etc

[winner69]

They keep talking about this fundamental change in regs about window glazing and that it's going to be huge over the next few years

You'd think that if that's the case they wouldn't want to run down numbers too much .... not easy to get good production workers and glaziers

[winner69]

Any hope of dividend out the window with redundancies

Surely a capital raise on the way .... maybe part of actual results announcement coming up

Maybe 3 for 1 at 10 cents - that should fix it up

[nztx]

Suppose that's put the lid on any prospect of any glimmer of a dividend :)

Seem to recollect there was a bit more brighter light on this a while back ..

How does a Company coming out of a construction boom perform so badly and wind up in this
position ? ;)


We know about all the intangibles and blinded lenders hoisting up the pack of cards before it
got offered out and listed. But performance since has been seriously bad if operating it
is not delivering ..

[nztx]

Any hope of dividend out the window with redundancies

Surely a capital raise on the way .... maybe part of actual results announcement coming up

What 3 for 1 at 10 cents


But given what's been seen - who would entrust more hard earned in the general direction
on possibility of repeat performances, headed into a downturn ?

Perhaps it should be taken over by or offered to the competitor instead where the lights appear
to be on and Management are properly onto it ? ;)


Have they forgotten the second word "PERFORMANCE" in the Company Name ? :)

[t.rexjr]

They keep talking about this fundamental change in regs about window glazing and that it's going to be huge over the next few years

You'd think that if that's the case they wouldn't want to run down numbers too much .... not easy to get good production workers and glaziers

The trouble is the change in regs brings about a new norm. A once premium product just became their most competitively priced product.

That and residential building is about to hit a wall.

[Rawz]

The thing with that $60m debt mountain is that it’s actually worse as they did a sale and lease back of their fleet of vehicles which netted $6m by memory?

That’s been gobbled up and now have the extra expense on the PnL.

[Balance]

Company in its death throes - controlled by its bankers.

That’s how I see MPG - stripped naked by PE, wounded and now being picked clean by competition.

[Leemsip]

Can't blame the PE stuff years ago. Current management have had 3? Years at the helm.

Slash the marketing budget (mpg are the big boys anyway so everyone knows), get rid of 90% of the folks on >150k. Oz business is a problem, sell it at any price.

Might be too late now... price of debt going up big time.. building boom over....

I actually don't see how they survive...

[BlackPeter]

What's going on? HY results out and nobody notices?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/403206/384603.pdf

Beautiful picture of the thing in Rolleston the council does not want to call "Library".

Revenue up by 18% (better than forecast) and earnings grew by 50% (admittedly from 0.2 cents per share for 1HY 22 to 0.3 cents per share for 1HY 23), but anyway - the 2nd HY will be still better when they save all this cost ...

Bank liabilities did grow (to fill the stores to safeguard against supply issues), but overall ratio liabilities to assets is unchanged at 68.6%. Admittedly - a lot, but not anymore rising.

They do have a plan to cut resources to match the reduced workload ...

... and even their Australian sub seems to get some traction (revenue up 32%) and now making money instead of loosing it.

All good? Who knows, this might be their inflection point and nobody noticing ?

[Rawz]

i saw it come in. I do like to flog a dead horse but after awhile its no fun

[kiora]

Is closing BOP & distributing from Auckland really for the better ???
Likely to go down like a lead balloon ?
BOP times
"Bay of Plenty's population growth second highest in country"

[Filthy]

What's going on? HY results out and nobody notices?

had a brief read yesterday; 0.6M - hardly great; economic headwinds and a slow down in construction activity, debt up 6.8M... - all still a bit 'meh'

[BlackPeter]

Is closing BOP & distributing from Auckland really for the better ???
Likely to go down like a lead balloon ?
BOP times
"Bay of Plenty's population growth second highest in country"

Might have to do with the age or condition of the manufacturing facilities. All building suppliers are currently reducing site numbers - I think STU went down from something like 20 sites to 6 or 7.

Good to see that MPG still have a factory next to the fastest growing district in NZ (Selwyn). Rolleston is the town of the future, while BoP is just a rest home for aging Aucklanders, isn't it?

[t.rexjr]

Might have to do with the age or condition of the manufacturing facilities.

I seem to remember doing a tour of the BOP factory. A few years ago now but it was their 'most state of the art' factory. Still looks fancy today

[BlackPeter]

I seem to remember doing a tour of the BOP factory. A few years ago now but it was their 'most state of the art' factory. Still looks fancy today

Have you seen the other factories so that you are able to compare?

I've been a couple of years ago in their Christchurch facility ... and it was amazing to watch all the glass panels automatically cut and processed - moving unattended along the walls :) ;

[t.rexjr]

Have you seen the other factories so that you are able to compare?

I've been a couple of years ago in their Christchurch facility ... and it was amazing to watch all the glass panels automatically cut and processed - moving unattended along the walls :) ;

No, not had the chance. It impressed me amd my wife tells me I'm very hard to impress...

Then I realised all they did was cut glass

[Rawz]

Winner69 mentioned on the Retailers thread yesterday the one news article about covid supply issues turning into a inventory crisis. see article here: https://www.1news.co.nz/2022/12/03/covid-pandemic-supply-chain-crisis-shifts-to-inventory-crisis/.

I straight away thought the dog MPG would probably have fallen for this and yep- check recent interim results. Inventory levels up 26% yoy to $32.6m from $25.8m.

MPG say its a good thing but in truth its a inventory crisis

[BlackPeter]

Winner69 mentioned on the Retailers thread yesterday the one news article about covid supply issues turning into a inventory crisis. see article here: https://www.1news.co.nz/2022/12/03/covid-pandemic-supply-chain-crisis-shifts-to-inventory-crisis/.

I straight away thought the dog MPG would probably have fallen for this and yep- check recent interim results. Inventory levels up 26% yoy to $32.6m from $25.8m.

MPG say its a good thing but in truth its a inventory crisis

Hmm - I guess time will tell. Suspect however that MPG's raw materials have a quite low risk of running out of fashion. Glass sheets don't change that much over the years.

Given that ... it might be an advantage to be able to deliver when the customer needs it without running the risk of running out of stock - and as long as inflation in the building industry is as rampant as it currently is, the full stores (with material purchased at pre inflation prices) might pay nice interest.

Anyway - time will tell, but at current I am cautiously optimistic.

[t.rexjr]

Inventory levels up 26% yoy to $32.6m from $25.8m.

Hard to guage how that equates to actual stock level. Is it 25% more stock, or 25% more stock value?

Also is it up because they've bought more... or sold less...

[winner69]

Hard to guage how that equates to actual stock level. Is it 25% more stock, or 25% more stock value?

Also is it up because they've bought more... or sold less...

probably a bit of everything --- bought more than they thought they needed ... sold less than expected .... and it cost more ... and maybe they broke less

[silverblizzard888]

"A company that helped produce some of Christchurch’s most glamorous rebuild projects has gone into liquidation.Alutech Windows and Doors Ltd worked on the facades of post-earthquake buildings including the Tūranga central library, the Deloitte office building, The Crossing shopping centre, and Rolleston’s Te Ara Ātea civic centre"

https://www.stuff.co.nz/the-press/canterbury-top-stories/130672141/company-that-worked-on-big-christchurch-rebuild-projects-folds

Does anyone actually make money selling glass?

[Scrunch]

probably a bit of everything --- bought more than they thought they needed ... sold less than expected .... and it cost more ... and maybe they broke less

As long as they aren't doing something dodgy like calling glass off-cuts inventory then I can't see big issues with having additional inventory. There's the additional holding cost of more dollars tied up in working capital but if its product that is used all the time in production processes, levels can easily be lowered when shipping becomes reliable. Reducing stock levels won't take discounting/writing off and that's the killer for the P&L.

The big problem area for high inventory values is when its packed full of finished product that you can't sell or of goods that don't age well.

[t.rexjr]

Does anyone actually make money selling glass?

Are they glass cutters or aluminum cutters? Metro would've done a fair chunk of the glass cuting on some of those projects. Alutech would've wrapped APL's aluminum profiles around it.

Lots of fingers in the pies

[silverblizzard888]

Are they glass cutters or aluminum cutters? Metro would've done a fair chunk of the glass cuting on some of those projects. Alutech would've wrapped APL's aluminum profiles around it.

Lots of fingers in the pies

Hard to say precisely, but they call themself a window supplier. You could be quite right that Metro may be the one that might have done the glass cutting.
On their website it says:

"Alutech Windows & Doors Limited is a privately owned Canterbury Company with over 30 years service to the New Zealand market. We are foremost a commercial window supplier but also cater to high end residential, architectural and multi unit developments. We have supplied windows to many areas in New Zealand as well as China, the Maldives and Fiji."

Either way the players in the industry don't seem to be doing well.

[BlackPeter]

Hard to say precisely, but they call themself a window supplier. You could be quite right that Metro may be the one that might have done the glass cutting.
On their website it says:

"Alutech Windows & Doors Limited is a privately owned Canterbury Company with over 30 years service to the New Zealand market. We are foremost a commercial window supplier but also cater to high end residential, architectural and multi unit developments. We have supplied windows to many areas in New Zealand as well as China, the Maldives and Fiji."

Either way the players in the industry don't seem to be doing well.

No doubt - the future is bleak: windowless buildings next :) ?

But there is an old saying in Palestine: "If apricots are cheap, plant apricot trees!"

[t.rexjr]

Hard to say precisely, but they call themself a window supplier. You could be quite right that Metro may be the one that might have done the glass cutting.
On their website it says:

"Alutech Windows & Doors Limited is a privately owned Canterbury Company with over 30 years service to the New Zealand market. We are foremost a commercial window supplier but also cater to high end residential, architectural and multi unit developments. We have supplied windows to many areas in New Zealand as well as China, the Maldives and Fiji."

Either way the players in the industry don't seem to be doing well.

I'm not familiar with Alutechs structure but I do know "Metro Glass worked with Alutech Windows & Doors Ltd on the structural glazed windows that sit behind an angular screen of anodised aluminium and sun louvres". On the Te Ara Ātea Library

Window and door companies are generally sellers of complete window joinery units. They buy extrusions off a supplier like APL and make up the window box. Glass companies like Metro will supply the glazing unit to be fitted to the frame. The complete units are then supplied to the construction firm. There are many fingers in between this too.

You can imagine the squeeze placed on margins when you are but one link in a wholesale chain...

[winner69]

Wonder if Metro are owed much by this Alutech

As an aside Trade Receivables have increased a lot over the last 12 months …up 50%

[Ferg]

"Does anyone actually make money selling glass?

November 22 was a record month for glass sales for a client. Nice YoY and MoM growth and margins. December is also looking strong. No complaints here. Hence the reason I'm surprised MPG performance is the opposite of what I am observing.

[winner69]

I see Metro listed as a creditor in Alutechs liquidators report

Trade Creditors about $6m and stuff all chane of anybody getting anything by sounds of it

Fixed price contracts and contractors deducting amounts for remedial work given as reasons for going broke

Hope Metro not in for too much and have 'provided' for what it may be already

[Leemsip]

Hits keep coming.

They seem to be doing the right things now:
- cost cutting drive
- increase in prices

With the recession coming, as per the RBNZ, will it be enough to offset the drop in revenue?

[nztx]

Hits keep coming.

They seem to be doing the right things now:
- cost cutting drive
- increase in prices

With the recession coming, as per the RBNZ, will it be enough to offset the drop in revenue?


Increasing prices in a slumping market wont do much to save the day

It may drive potential customers to the competitors circling

Trimming the expensive wood in middle upper levels responsible for the current state of affairs may be more effective, similar to trimming off the rotten and diseased wood from a tree ;)

there must be a fairly sizeable intangibles impairment hanging in the wind somewhere ;)

[Sideshow Bob]

I used to see the Metro truck EVERY day on the drive to work.

Saw it a couple of times last week, 1st time for a while.

Didn't see it today.

Dunno what that all means.....:sleep:

[BlackPeter]

I used to see the Metro truck EVERY day on the drive to work.

Saw it a couple of times last week, 1st time for a while.

Didn't see it today.

Dunno what that all means.....:sleep:

They might have changed their route :) ;

[ralph]

I used to see the Metro truck EVERY day on the drive to work.

Saw it a couple of times last week, 1st time for a while.

Didn't see it today.

Dunno what that all means.....:sleep:


Probably closed the factory :eek2:

[silverblizzard888]

I used to see the Metro truck EVERY day on the drive to work.

Saw it a couple of times last week, 1st time for a while.

Didn't see it today.

Dunno what that all means.....:sleep:


They started taking the bus to take advantage of the half price fare

[ralph]

They started taking the bus to take advantage of the half price fare

Thats a really positive move for mpg at long last ,should help with those huge debts:t_up:

[winner69]

So Wells (Takutai) still buying

Up to 10.94% now

That AFR article now on hold to after Christmas I think

[percy]

So Wells (Takutai) still buying

Up to 10.94% now

That AFR article now on hold to after Christmas I think

10.94%
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/404206/385768.pdf

[etrader]

Easy to see where this is heading

Peter wells who founded vulcan steel raised over $350 mil to list last year currently has $160 mill in value with Vulcan, nabbed $3.6 mill worth of mpg creating a blocking share, keep acquiring more cheap then vulcan makes a takeover at let’s say 30c and agrees to an arms Length transaction for 11% from pete

$280 mill turnover absorbs it inside vulcan rids of massive overheads and adds to verticles

Dyor

[Leemsip]

Interesting Theory...
$60m debt though....

[etrader]

Agree re $60 mill debt, this was a classic private equity load it up with debt and dump, mpg has never paid out a cent in 5 years via div but getting the right player onboard, shifting debt down will fit one of the big boys

Disc: I don’t and have never owned any just linking the dots

[winner69]

Wonder what Bain Capital doing with their 11% plus holding?

Cost them 40 cents and 55 cents 4 years ago (Devon Funds at least cut their losses at 40 cents)

Maybe AFR will enlighten us after Christmas

[Sideshow Bob]

First post of the year about Metro of the Dogs.....:sleep:

https://www.nzx.com/announcements/407328

Metroglass Australia update and guidance for FY23

Metro Performance Glass provides a trading update on Q3 performance and guidance for financial year 2023.

Trading to date has been softer than the prior year in New Zealand, while Australia has continued improve its performance from the first half.

For the financial year ending 31 March 2023 Metroglass expects to achieve a Group EBIT before abnormal items in the range of $11.0 million to $12.0 million vs $5.9 million in FY22. Net debt is expected to be circa $64.0 million, which is an increase year on year, driven primarily by working capital requirements.

Australian Glass Group (AGG) has continued to make significant improvements in its operational and financial performance with EBIT performance expected to contribute significantly to the group result in FY23.

Metroglass CEO Simon Mander said “After repositioning of the Australian business followed by several years of growth and improved performance, AGG are well-positioned to continue to benefit from an improving outlook for double-glazing. We feel that it is now time to explore divestment options of the Australian business.”

The process is expected to take a number of months with the appointment of an advisor in the final stages.

[Rawz]

thats debt is a concern.

[winner69]

Metro had to say something before we read about in the AFR ;)

Possibly got somebody wanting to take them over but acquiror don't want to take Oz on so OZ must go before hand

So a business now well positioned for a good future and going cheap

That's Metro for you

[Rawz]

Peter Wells can buy it. Build it back up and sell it to Private equity for $150m.
Private equity can run it into the ground, and then list it for $300m.
Shareholders can then watch the value drop back to $30m.
Then we can repeat the cycle

Need a name change of course. Aotearoa Glass.

[winner69]

Metro borrowed $48m to acquire that OZ business in 2016

And then pumped in zillions of capex and restructuring costs

OZ sales aren't really much more than they were back then

Now it is well positioned for a bright future it's time to hock it off

[percy]

The way Aussie market is performing compared to NZ, the Aussie business would be the better one to own.?

[winner69]

The way Aussie market is performing compared to NZ, the Aussie business would be the better one to own.?

Right on percy

NZ business almost past point of redemption ..... being killed by opposition

Maybe a new owner see's a future

[whatsup]

Right on percy

NZ business almost past point of redemption ..... being killed by opposition

Maybe a new owner see's a future

Didnt the fish heads gutt this ontfit of $s and people ?

[Leemsip]

Hmm $12M before interest costs on $60m, so take $3m off. Wonder what Capex was.....

Net Debt not coming down so hard to imagine there is actually any real cash flow happening..

Interested to pick through the results. Be amazing for them to flick the Oz business

[Fortunecookie]

The CEO, management and boards income should be placed under scrutiny. They are happy to collect their regular bloated paychecks while the company digs themselves a bigger hole. I don't know how that can be justified.

[Leemsip]

Would like to re-up this for the lols.

Hit 16.5c this morning. Lowest since COVID depths at 15c

Sellers volume 340k, buyers volume 10k not screaming confidence.

NPAT I guess around $6m?
$64m debt + building down turn coming up. Any reduction in sales will crush them.

Bankrupt in late 24 I reckon.

[t.rexjr]

Would like to re-up this for the lols.

Hit 16.5c this morning. Lowest since COVID depths at 15c

Sellers volume 340k, buyers volume 10k not screaming confidence.

NPAT I guess around $6m?
$64m debt + building down turn coming up. Any reduction in sales will crush them.

Bankrupt in late 24 I reckon.

Might be sooner with the building sector screeching to a halt the way it has

[Louloubell]

It was a dog and is a dog and will be a dog. And, that is an insult to our four-legged friends.

I was a holder for a long time and learned a lot from my (painful) walk over Metro glass.

[BlackPeter]

Would like to re-up this for the lols.

Hit 16.5c this morning. Lowest since COVID depths at 15c

Sellers volume 340k, buyers volume 10k not screaming confidence.

NPAT I guess around $6m?
$64m debt + building down turn coming up. Any reduction in sales will crush them.

Bankrupt in late 24 I reckon.


It was a dog and is a dog and will be a dog. And, that is an insult to our four-legged friends.

I was a holder for a long time and learned a lot from my (painful) walk over Metro glass.

Hmm - so it sounds some posters here (not just the two above) are basically saying Peter Wells was an idiot when he increased his share two months ago to 11%?

https://www.nzx.com/announcements/404206

Sure - everybody can make mistakes, but Peter Wells put at least his name and his money to it ... not just bashing a company while its SP is down ...

I am wondering what opportunities he is seeing ...

[winner69]

Hmm - so it sounds some posters here (not just the two above) are basically saying Peter Wells was an idiot when he increased his share two months ago to 11%?

https://www.nzx.com/announcements/404206

Sure - everybody can make mistakes, but Peter Wells put at least his name and his money to it ... not just bashing a company while its SP is down ...

I am wondering what opportunities he is seeing ...

All will be revealed soon ……not too far away methinks

[Louloubell]

Black Pete: I'm not saying that Peter Wells is an idiot. It could well be there are developments afoot and people with money and knowledge of the industry can take advantage of.

I'm saying that Metro has been a poor performer and hurt many retail investors. I put it in the same basket as MFB.

The rich and institutions are milking the small people. I could add some other words to milking, but am feeling particularly mellow tonite.

[winner69]

MPG going down because MFB was catching up.

[BlackPeter]

MPG going down because MFB was catching up.

Probably because they are close in alphabetical order. If its a Mexican wave ... MPG will be next ;) ;

[winner69]

Probably because they are close in alphabetical order. If its a Mexican wave ... MPG will be next ;) ;

At these prices you must be buying?

[BlackPeter]

At these prices you must be buying?

My English teacher taught me more than 50 years ago to be careful with using the word "must" in the English language ...

[winner69]

My English teacher taught me more than 50 years ago to be careful with using the word "must" in the English language ...

Ok - at these prices you feel for the temptation and bought some (more)?

[Rawz]

Peter Wells can wait for the liquidation and buy the assets?

[BlackPeter]

Ok - at these prices you feel for the temptation and bought some (more)?

Actually - I do think at this stage that the chances for them to crash are lower than the chances for them to go up (probably ahead of some takeover). On the other hand - I am not quite sure, what's happening behind the scenes (and this "don't invest into what you don't fully understand " applies ...) and apart from that - there are just so many more beautiful investments around, why bother?

Discl: Still holding a small parcel ... and yes, SP development helped to make it insignificant ...

[BlackPeter]

Peter Wells can wait for the liquidation and buy the assets?

For that he would not have needed to buy 11% beforehand - if the company crashes (what I don't expect, but some seem to imply), than he will lose per share the same amount as anybody else ..

[nztx]

What's the MPG empire worth at Liquidator's pricing rates on a bad day ?

Nothing like cleaning all the intangible clouds of past value puff ups away in one sweep :)

Wipe away all the monkeys with their hands out for assisting in puffing things up too

Could be quite a different sort of operation privatised, no onerous reporting etc, no troublesome
shareholders, NZX looking over the shoulder, no large boardroom approvals and committees
for everything under the sun, No Auditor .. :)

I better stop .. it might start looking too worthwhile waiting for the chips to collapse and
having a few words with the undertaker looking after what's left over :)

[Leemsip]

Issue is the debt of course.

Also thought the big fish buying in must know something.
$64m debt seems like a lot to take on though. Not sure how that can be cleared through operating profits in any sort of timely way.

Intrigued what his plan might be...

[Fortunecookie]

Im thinking along the lines they need to do a 3for1 share equity raise to get rid of the debt in its entirety. I am not confident in management and the board because they cannot control costs.That is important in a industry with thin margins. So it would be contingent on them new management and boards being brought in. I am not familiar Peter Wells, but perhaps he wants to exercise abit more influence over the company in that respect and sees value if costs can be contained.

There is an opportunity to restructure. But how I see it the restructure won't make a difference unless there is a change of people within the company, to turn this company around and improve shareholder value.

[Leemsip]

Time for a cap raise was 12 months ago though...
would you raise @ 10c now?

[winner69]

Metro people didn’t like Bruce Sheppard at the last ASM, esp when he pointed out how they weren’t really up to it.

Extract NBR

He (Sheppard) said while he accepted the company only had limited control over issues such as recession, interest rates, and Covid’s disruption of supply chains, “every single business is suffering those same risks that you are. And they’re not all suffering to the same extent you are.

“In fact, some of them are doing damn well, because they have practices around human management, financial management and, dare I say it, balance sheet resilience.”

[Fortunecookie]

Time for a cap raise was 12 months ago though...
would you raise @ 10c now?

I agree a cap raise would be better when SP is higher.

Probably looking around at the 15cent mark.

[Fortunecookie]

Metro people didn’t like Bruce Sheppard at the last ASM, esp when he pointed out how they weren’t really up to it.

Extract NBR

He (Sheppard) said while he accepted the company only had limited control over issues such as recession, interest rates, and Covid’s disruption of supply chains, “every single business is suffering those same risks that you are. And they’re not all suffering to the same extent you are.

“In fact, some of them are doing damn well, because they have practices around human management, financial management and, dare I say it, balance sheet resilience.”

Somehow I am not surprised. To them it is a goose that lays the golden egg. Thanks for the extract. I totally agree with what B Sheppard said. I think it starts with the remuneration and incentive structure for the CEO. There is little incentive to do anything when he is collecting a $650k base salary. The chief board member is getting $160k, what to attend a couple of meetings. Why invoke change when he gets a tidy sum to meet up a couple of times. There is no incentive to force improvements.
I'm in view of a equity raise, however I would only support it if there is a clear out of board and management. However the chances of that are unlikely.

IMO the catalyst for a chance in turnaround has to occur in the following manner. A individual takes on a significant or majority shareholding in the company. This individual forces a change in board. The board forces a change in management (in particular the CEO position) and revises the incentive structure. Complete an equity raise probably at 15cents a share. The objective would be to achieve a npat of $8mill going forward/ that should return about 1cent per share which should be adequate for shares prices between 15 to 17cents.

I don't know too much about Peter Wells. But I might do abit of digging.

Full disclosure I don't own mpg.

[Leemsip]

Good thoughts on the management and rem.
No one is paying 15c for this though in the current environment. Its going to have to be low ball.

[winner69]

The guys who sold Metro to private equity for about $350m in 2006 did well eh. They knew how to run a glass business successfully.

Even Fletchers were outbid at the time …..that’s saying something

[Fortunecookie]

Good thoughts on the management and rem.
No one is paying 15c for this though in the current environment. Its going to have to be low ball.

You are right. There has to be a carrot, somehow offset to get the full funding.

[Fortunecookie]

The guys who sold Metro to private equity for about $350m did well eh. They knew how to run a glass business successfully.

Even Fletchers were outbid at the time …..that’s saying something

I don't know the full history, but thats interesting to know and yep it is saying something. I will be curious to know what their next move is.

[Sideshow Bob]

https://www.nzx.com/announcements/409112

Metro Performance Glass provides an update to the Australian Glass Group (AGG) divestment process.


Metroglass confirms that Jarden has been appointed as advisor. To enable the divestment process to progress and in line with our continuous disclosure obligations, Metroglass provides the following guidance for AGG.


After a successful turnaround, for the 12 months to 31 March 2023 Metroglass expects AGG to deliver revenue of AUD 70.0 million, EBITDA of AUD 11.0 million and EBIT of AUD 6.0 million1.


For the 12 months to 31 March 2024, management forecasts are for AGG to achieve revenue, EBITDA and EBIT of approximately AUD 79.0 million, AUD 11.5 million, AUD 7.5 million1 respectively.


Metroglass reaffirms its Group guidance for the current financial year of EBIT (before abnormal items) in the range of NZD 11.0 million to NZD 12.0 million vs NZD 5.9 million in FY22. Net debt is now expected to be less than NZD 63.0 million.

[winner69]

NBR speculating that an AGG sale is not universally popular among Metroglass's main shareholders.....Bain, Masfen and Wells hold about 36% between them

Could make things interesting

Sell AGG to reduce debt then what ...... I reckon takeover seems best out for shareholders

[Balance]

NBR speculating that an AGG sale is not universally popular among Metroglass's main shareholders.....Bain, Masfen and Wells hold about 36% between them

Could make things interesting

Sell AGG to reduce debt then what ...... I reckon takeover seems best out for shareholders

They are not in control unless they want to throw in more money into MPG - the banks are in control and they want their money back.

Net debt was $48m in 2021 - projected to be $60m this year!

Guess the banks have lost all faith in MPG's management?

[Sideshow Bob]

https://www.nzx.com/announcements/410477

Resignation of Metroglass Group CFO
Metro Performance Glass today announces that Group Chief Financial Officer Brent Mealings has given notice of his resignation from the company.
CEO, Simon Mander said: “On behalf of the company and the board, I’d like to thank Brent for his significant contribution to Metroglass since joining us in February 2020 at the start of the Covid-19 pandemic. Brent has provided valuable leadership and skills through a period with significant supply chain disruption, cost inflation and industry change. Brent is returning to the Dairy industry where he worked for 17 years prior to joining us and we wish him every success for the future.”
Brent will continue in his role for up to six months and support the transition of a new CFO. The recruitment process for a replacement has commenced.

[Balance]

https://www.nzx.com/announcements/410477

Resignation of Metroglass Group CFO
Metro Performance Glass today announces that Group Chief Financial Officer Brent Mealings has given notice of his resignation from the company.
CEO, Simon Mander said: “On behalf of the company and the board, I’d like to thank Brent for his significant contribution to Metroglass since joining us in February 2020 at the start of the Covid-19 pandemic. Brent has provided valuable leadership and skills through a period with significant supply chain disruption, cost inflation and industry change. Brent is returning to the Dairy industry where he worked for 17 years prior to joining us and we wish him every success for the future.”
Brent will continue in his role for up to six months and support the transition of a new CFO. The recruitment process for a replacement has commenced.

Bad bad sign.

Seen it all before - the financial guy has enough of the mess and spending his life going backwards, rather than forward.

Ominous for MPG. :scared:

[Leemsip]

tough gig to be CFO at a skint company... fair enough to bail.

Interesting couple of years coming up for MPG.. can they sell the AGG for any decent coin, can the recent price rises offset any reduction in volume as less houses get built.....

[winner69]

Bad bad sign.

Seen it all before - the financial guy has enough of the mess and spending his life going backwards, rather than forward.

Ominous for MPG. :scared:

Going back to dairy …..Funny if it was Synlait

[nztx]

Nice steady 12 months slope .. wasn't the 30c mark when there was glimmer of something
better and possible sniff of a divie around a few corners ? ;)

[winner69]

Share price still sinking to new lows ……14.5 cents now

[winner69]

Close at 14.1 cents

Surely receivers/administrators not going in tomorrow. That’s how it seems to be priced at the moment

[winner69]

All the speculation of ‘corporate activity’ of a few months ago seems to have dissipated

Wonder how sale of Oz business going?

[Balance]

All the speculation of ‘corporate activity’ of a few months ago seems to have dissipated

Wonder how sale of Oz business going?

The Masfens still in there?

[winner69]

The Masfens still in there?

Were last time I checked

Doubt whether Masfens and Wells are that happy about how things going

Some might say it’s a punt now …never know a 30 cent takeover

[BlackPeter]

Were last time I checked

Doubt whether Masfens and Wells are that happy about how things going

Some might say it’s a punt now …never know a 30 cent takeover

Well, they still seem to pay the fee for their webpage: https://metroglass.co.nz/ - and looking flash.

and they have heaps of open jobs: https://metroglass.co.nz/careers/ - so I suspect its not lack of work pulling them down?

Just looking at the latest (HY report) - ok. already stone old, but new numbers come only end of this month:

Total assets: $286m (of them $56m intangible)
total liabilities: $196m (luckily only $71m interest bearing)

Net assets: $90m (all numbers rounded)

and yes, current market cap: $26m;

Hmm.

Yes, will be interesting to hear how the Australian divestment is going ... if not a CR might be in the cards, depending on how long the banks are happy with this market cap?

2 for 1 at 10 cents?

Maybe they should have done the job a year ago - at that stage SP was still twice of what it is today.

I guess May 29th we all will be a bit wiser ...

[nztx]

and all this on an NTA of $0.182 .. if we presume NZX have it right ? ;)

[winner69]

The Group delivered a result at the upper end of guidance ….that’s good news

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/412158/395385.pdf

[Leemsip]

better than I expected. Debt not a runaway train.... revenue up.

Sort of breakeven ish though with a building down turn coming and still $60m debt on the books... Not sure how anyone can buy this in the current state.

[winner69]

Sell $260m of stuff and a negative operating cash flow (including leases) of $1.1m (and then $6m of capex so cash burn $7.1m for year)

Something not right with how this business operates

Maybe the ex yachtie who runs it needs to look for more favourable winds

[Rawz]

first semi good result in a long long time.
some signs of light in there.

Aussie going to save the day?

be interesting see that FCF with the planned inventory sell down. build up $4m last 12 months.

[Balance]

Sell $260m of stuff and a negative operating cash flow (including leases) of $1.1m (and then $6m of capex so cash burn $7.1m for year)

Something not right with how this business operates

Maybe the ex yachtie who runs it needs to look for more favourable winds

The debt - it just keep a growing.

Says the banks are in control.

[Rawz]

first semi good result in a long long time.
some signs of light in there.

Aussie going to save the day?

be interesting see that FCF with the planned inventory sell down. build up $4m last 12 months.

this is still a very risky investment due to the huge debt

[Fortunecookie]

"Bank borrowings are secured by a first-ranking composite general security deed. The Group’s bank borrowing facilities negotiated on14 October 2020 comprise a syndicated revolving loan facility of $75 million for a three-year term expiring in October 2023, as well asoverdraft and bank guarantees totalling $8.15 million."

The debt is looking toxic.

[Rawz]

"Bank borrowings are secured by a first-ranking composite general security deed. The Group’s bank borrowing facilities negotiated on14 October 2020 comprise a syndicated revolving loan facility of $75 million for a three-year term expiring in October 2023, as well asoverdraft and bank guarantees totalling $8.15 million."

The debt is looking toxic.

that has since been extending out to 2024.

Company is forecasting EBIT growth and inventory sell down with debt reducing $5m by half year.

see what happens i guess

[Fortunecookie]

that has since been extending out to 2024.

Company is forecasting EBIT growth and inventory sell down with debt reducing $5m by half year.

see what happens i guess

Thanks for the clarification. Where did it say that regarding extension of debt facility?

I don't know why they keep referring to EBIT because the I part is the big part of their problem.

[Rawz]

Thanks for the clarification. Where did it say that regarding extension of debt facility?

I don't know why they keep referring to EBIT because the I part is the big part of their problem.

Capital Management

Metroglass has begun to reduce working capital commitments in line with the improving reliability of the international supply chain and this is expected to materially reduce its investment in working capital through the first half of FY24. Metroglass’ net debt to EBITDA ratio decreased to 3.3x at 31 March 2023 from 3.8x in the prior period, primarily as a result of the increase in EBITDA. The net debt to EBITDA ratio is expected to continue to improve through the first half of FY24 through the improving performance of the New Zealand business and the unwinding of working capital invested in inventory. During the year, Metroglass concluded an extension of its current syndicated banking facilities out to the end of October 2024 (previously October 2023).

[Fortunecookie]

Capital Management

Metroglass has begun to reduce working capital commitments in line with the improving reliability of the international supply chain and this is expected to materially reduce its investment in working capital through the first half of FY24. Metroglass’ net debt to EBITDA ratio decreased to 3.3x at 31 March 2023 from 3.8x in the prior period, primarily as a result of the increase in EBITDA. The net debt to EBITDA ratio is expected to continue to improve through the first half of FY24 through the improving performance of the New Zealand business and the unwinding of working capital invested in inventory. During the year, Metroglass concluded an extension of its current syndicated banking facilities out to the end of October 2024 (previously October 2023).

I see, thanks Rawz.

Yep let's wait and see. I am surprised that the banks agreed to it or they have given an ultimatum they need to sort it out within the next 12 odd months.

[Rawz]

I see, thanks Rawz.

Yep let's wait and see. I am surprised that the banks agreed to it or they have given an ultimatum they need to sort it out within the next 12 odd months.

Yeah they say sell Aus and pay us back...

A shame because Aus looks like it is finally after many moons making good money.

Looks like a sale will reduce debt by 2/3s ish

[Fortunecookie]

Yeah they say sell Aus and pay us back...

A shame because Aus looks like it is finally after many moons making good money.

Looks like a sale will reduce debt by 2/3s ish

Unfortunately it is a best case scenario. I don't think they are in a good position to negotiate on price.
That working capital is a real worry when they don't really have a debt facility to fall back on.

[winner69]

Share price hanging in there in the 14s but heading to new all time lows in the 13s

I keep checking the AFR for news of Aussie sale but nothing …but then shareholder Shepherd might do what he jokingly said he might do and acquire the whole company.

Maybe Forbar will come out and say what they said about PEB in that the longer it’s taking for a good outcome the higher the probability there will be one.

[Rawz]

Worth a punt you reckon W69?

What’s book value these days?

[winner69]

Worth a punt you reckon W69?

What’s book value these days?

Book Value about 46 cents ……say if they took a bit more goodwill impairment about 35 cenyts

Hmmm

[Leemsip]

I think the oz business is worth a lot less than Raws $40m odd (2/3 of debt).



I calculated a year or so ago that their GP is much less in the Oz business.




NZ
OZ


Sales
177.99
58.077







Gross profit
77.1
16.488


Gross profit
43%
28%



Pretty skinny margins. I sort of think about 40% as being a minimum GP... Once you chuck in distribution and glazing costs (roughly half of GP?) and marketing and admin overheads and capex spend, it starts to look unprofitable.

I suspect (possibly with no base in reality) that they are now using some interesting accounting to skew all the profit towards Oz before they make the sale. A purchasor will see through this.

I think they will get about $20mish, so leaving the remaining business with $40m debt.

Anyway, super interesting to see what happens.

[Balance]

When a company sells its best asset to pay down debt, it usually means :

1. The banks are in control and they have lost patience and confidence so they just want their money back

and

2. The company is in survival mode. In this case, MPG will need to recapitalise its NZ operations unless it can get $60m+ for its Australian operations.

Un-investable.

[BlackPeter]

When a company sells its best asset to pay down debt, it usually means :

1. The banks are in control and they have lost patience and confidence so they just want their money back

and

2. The company is in survival mode. In this case, MPG will need to recapitalise its NZ operations unless it can get $60m+ for its Australian operations.

Un-investable.

Maybe they are just acknowledging that it was a mistake to make the jump to Australia in the first place. Many NZ companies made the step and came back with a bloody nose. Their home base is New Zealand, and they certainly knew how to make money here.

I think it is a mistake to look just at the risks and dismiss the opportunities without looking at them.

Yes, there clearly are risks, and on top of your points - they have a quite average CEO and a lame board.

On the plus side - I think they still command more than 50% of the NZ Glass market, they do have quite well equipped and automated factories (state of the art) and they have the largest and best nit logistical network in NZ as well all the connections with the building industry.

Hard to say, how much this is worth, but certainly more than nothing. While I am not sure the people who got them into the mud have as well the potential to pull them out of it - I am sure their tangible and nontangible assets (and connections) will be worth something for somebody.

So, yes - it is risky, but it certainly is not un-investible.

Just wondering what Peter Wells plans to do with his 10.9%?

Are you saying he is an idiot and put money into an in-investable enterprise? I guess we will see who will come laughing out of this episode.

[winner69]

And Masfen doesn’t like losing money either

[Balance]

And Masfen doesn’t like losing money either

Same Masfen who lost an arm and half a leg in Surfers Paradise with Cavill Tower?

[Sideshow Bob]

Annual report, in all its gory, I mean glory.....

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/412981/396418.pdf

[t.rexjr]

Annual report, in all its gory, I mean glory.....

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/412981/396418.pdf

Doesn't seem like there's much money in being a wholesale glass reseller

[Rawz]

Debt is far too high

[BlackPeter]

Doesn't seem like there's much money in being a wholesale glass reseller

Well, on first look one could summarize the report as "2023 was a challenging year, but 2024 is likely to be worse."

That's encouraging, isn't it?

On the second look however they talk about high market uncertainty (which could be as well a good thing if you expect bad) and hide a number of promising indicators under all that gloom and uncertainty.

Not quite sure yet, whether the report is supposed to bring across that they understand why they are that deep in the mud. If it does, than they hide it quite well.

Probably just a good company with not quite matching leadership? Wondering what Warren says about these?

[Leemsip]

My quick and dirty analysis of the report is that they barely squeaked in cashflow positive once you add back all the increases in working capital (as presumably this will reverse in the coming year.




MPG


Operating cashflow
5


Leases
(6.9)


tax at 30% EBIT (less whats paid)
0.0


working capital movements
10.0


capex
(6.7)


other oneoffs



Cashflow
1.4



So despite all the Oz improvements and having a pretty good year all round they are just at breakeven cash wise. Any drop in revenue will be a disaster for MPG. 40% gross margins, so a lot of the decrease in the revenue will flow to the bottom line. 2024 is going to be tough and 2025 probably worse.

As per someones prev post - I think this is uninvestable.


Once again the GP is significantly lower in Oz (see below). Most of the overheads must get charged to NZ segment. Which either means the accounting is a bit funny (and boosting the Oz segment profit) or Oz is just much more efficiently run. Hmmm literally has to be one of these. I wonder if directors are eyes wide open about this when thinking about the divestment.




NZ
OZ


Sales
186.7
76.7



71%
29%


Gross profit
78.8
26.28


Gross profit
42%
34%

[Sideshow Bob]

New CFO....

https://www.nzx.com/announcements/413420

[Rawz]

New CFO....

https://www.nzx.com/announcements/413420

Wonder how the salary package negotiations went.

MPG: "We can offer cash and shares as part of your employment."
CFO: "Umm just cash please"

Lol sorry couldnt help myself. Wish all the best to new CFO and MPG

[Balance]

Wonder how the salary package negotiations went.

MPG: "We can offer cash and shares as part of your employment."
CFO: "Umm just cash please"

Lol sorry couldnt help myself. Wish all the best to new CFO and MPG

Maybe he should take an all stock remuneration - sp might double with that vote of confidence?

[winner69]

Goodness gracious me, Metro share price fallen to 13 cents something ……never been this low before

Best income would be somebody to use their petty cash and take them over …….the misery would be then be over

Even AFR seems to have silent Re corporate action

[Leemsip]

Goodness gracious me, Metro share price fallen to 13 cents something ……never been this low before

Best income would be somebody to use their petty cash and take them over …….the misery would be then be over

Even AFR seems to have silent Re corporate action

Cant raise capital with the SP @ 13.5c. Cant pay down the debt as there simply isnt any cashflow. Oz business not selling in a hurry.
Its a race against the improving margins and cost cutting vs the building down turn.... on the one hand - bankrupt, on the other bare survival.

Directors must be squirming. Not one of them owns a share (from memory). Lol, total lack of faith in the company.

[winner69]

Cant raise capital with the SP @ 13.5c. Cant pay down the debt as there simply isnt any cashflow. Oz business not selling in a hurry.
Its a race against the improving margins and cost cutting vs the building down turn.... on the one hand - bankrupt, on the other bare survival.

Directors must be squirming. Not one of them owns a share (from memory). Lol, total lack of faith in the company.

5 Directors have shares …..Chairman has 321k

[winner69]

Pretty happy looking leadership team

[Leemsip]

Ah apologies. Should know better than to post without backup (directors don’t own shares)

[winner69]

ASM coming up in early August

Share price was 25 cents last years meeting and there were some pissed off shareholders voicing their displeasure etc etc

This years meeting should make for good viewing ….hoping share price holds above 13 cents

Hope Bruce Sheppard turns up again …that be fun.

[winner69]

Seems Masfen and Wells think they may as well own Metro

Wonder how generous they will be?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/414827/398621.pdf

[Muse]

Wow.
Should probably be marked price sensitive eh - signalling a potential takeover and all

[winner69]

Wonder what Rhys Jones from Vulcan is thinking ..or has he other things on his mind these days.

[winner69]

I’d hazard a guess that Masfen andcWells have had a conversation with Bain already.

[Balance]

Trading halt?

NZX asleep at the wheel but got woken up at the last minute?

[Rawz]

Hope for the sake of the guy selling 200,000 shares at $0.16 he isnt asleep at the wheel.. should remove it and put it at 26 cents

[Baa_Baa]

Trading halt?

NZX asleep at the wheel but got woken up at the last minute?

Even then, they got the date wrong, 'until an announcement or market open Wed 20th' ... so is it market open tomorrow, Wed 19th, or Thu 20th?

doh.

[winner69]

Trading halt?

NZX asleep at the wheel but got woken up at the last minute?

We might hear how far ‘conversations’ have gone or just ‘we are aware of that Agreement but know nuthin more but will keep market informed if things happen’

But a bit of excitment anyway and share price might even go higher than My Food Bag’s

What you reckon will happen Balance?

[Fortunecookie]

"Looks like a scheme of arrangement takeover has been launched: Masfen Securities (the Masfen family office) and Takutai bumped both of their stakes to 25% each yesterday."

Madison Reidy on Twitter 1 HR ago.

DJ Khaled: we taking over.

[bulltrap]

Hope for the sake of the guy selling 200,000 shares at $0.16 he isnt asleep at the wheel.. should remove it and put it at 26 cents

I had an existing sell order in, but it got declined at the time of the trading hold announcement. I think this may've been done by Jarden (I'm using Jarden Direct) at their discretion, as I'm still seeing other orders in depth while mine is gone.

If that's the case, I'm grateful, but it would've been nice if they'd also declined the ERD sell order I was scalped on recently in very similar circumstances (literally slept through trading halt).

[bulltrap]

Announcement (https://announcements.nzx.com/detail/414874) in at $0.18c per share :(

Even the would-be acquirers don't seem to like this company much.

[Rawz]

Announcement (https://announcements.nzx.com/detail/414874) in at $0.18c per share :(

Even the would-be acquirers don't seem to like this company much.

LOL what a piss take

[Rawz]

"After carefully considering the NBIO (including receiving advice from Jarden and Bell Gully), the Board of Directors of Metroglass has concluded that the Proposal significantly undervalues Metroglass and that it is not in the best interests of the company and its shareholders to progress the Proposal."

Didnt need to pay Jarden or Bell Gully heaps of fees to know the proposal is not good enough

[winner69]

"After carefully considering the NBIO (including receiving advice from Jarden and Bell Gully), the Board of Directors of Metroglass has concluded that the Proposal significantly undervalues Metroglass and that it is not in the best interests of the company and its shareholders to progress the Proposal."

Didnt need to pay Jarden or Bell Gully heaps of fees to know the proposal is not good enough


Taking on $60m of debt as well ‘values’ Metro over $100m

Suppose Jarden couldn’t really say ‘take it or call the administrators in’ ..in other words tell shareholders take the 18 cents or risk zilch

[Balance]

Looks to me like just a ploy by Mafen & Co to flush out any potential bidder(s).

Only way they are going to get their money back?

[Rawz]

Taking on $60m of debt as well ‘values’ Metro over $100m

Suppose Jarden couldn’t really say ‘take it or call the administrators in’ ..in other words tell shareholders take the 18 cents or risk zilch

Yes true what a poor situation

So market cap is $33m and net debt $60m (fy23). EV is $93m.
Ebitda is $16.7m.

EV to EBITDA multiple of 5.7 probably not bad for this dog

[Fortunecookie]

The big question is what is happening to that debt. Ultimately it needs to be restructured. No indication aus bus will be sold.

Say they don't proceed with the said offer. When the debt comes due. What happens. Cap raise prior to or the liquidators are called in. The two parties can negotiate then.

The parties are hedging their bets. Suggesting they prepared to offer no more than $75m or there abouts on EV value.

Standard valuation methods don't apply because they are approaching a distressed situation.

Edit: apologies my bad. Ev value max at $100m. But could go down to $75m if liquidated.

[Lego_Man]

We might hear how far ‘conversations’ have gone or just ‘we are aware of that Agreement but know nuthin more but will keep market informed if things happen’

But a bit of excitment anyway and share price might even go higher than My Food Bag’s

What you reckon will happen Balance?

My Food Bag is next cab off the rank for predatory M&A...another story of dog IPO gets crushed down to deep value, gets snapped up.

[winner69]

The big question is what is happening to that debt. Ultimately it needs to be restructured. No indication aus bus will be sold.

Say they don't proceed with the said offer. When the debt comes due. What happens. Cap raise prior to or the liquidators are called in. The two parties can negotiate then.

The parties are hedging their bets. Suggesting they prepared to offer no more than $75m or there abouts on EV value.

Standard valuation methods don't apply because they are approaching a distressed situation.

Edit: apologies my bad. Ev value max at $100m. But could go down to $75m if liquidated.

A 3 for 1 at 10 cents rights would raise about $50m ……ha ha 3 for 1 highlights the problem and says they need some hero punter to step in and pump in at least $30m before a rights issue …or something like that

It seems current shareholders are screwed

[whatsup]

A 3 for 1 at 10 cents rights would raise about $50m ……ha ha 3 for 1 highlights the problem and says they need some hero punter to step in and pump in at least $30m before a rights issue …or something like that

It seems current shareholders are screwed

IMHO they always were from the previous strip out then repackage for the poor sods .

[Fortunecookie]

A 3 for 1 at 10 cents rights would raise about $50m ……ha ha 3 for 1 highlights the problem and says they need some hero punter to step in and pump in at least $30m before a rights issue …or something like that###

It seems current shareholders are screwed

I think a few months ago was looking at a cap raise at 15cents. The primary objective would be to get rid of the debt in its entirety. The moment is probably past and gone. If they did a raise at 10cents and stumped up the difference, it would work in their favour. Yep either way it's a screwed up situation for the existing shareholders.

Still a couple of moving parts and I can't say that I am that familiar with insolvencies in terms of whether they have first claim at negotiations. But I think they are in a strong position to force a decision.

[Rawz]

just sell aussie and repay the debt (or some of it). then can continue on for another few years before we are back to square one again lol

[Fortunecookie]

just sell aussie and repay the debt (or some of it). then can continue on for another few years before we are back to square one again lol

Yep good question, does it solve things.

[nztx]

Someone actually likes the look of a large pile of intangibles now ? ;)

[nztx]

Wonder what Rhys Jones from Vulcan is thinking ..or has he other things on his mind these days.


Pretty skilled at building something from little .. the Vulcan team :)

[Fortunecookie]

Someone actually likes the look of a large pile of intangibles now ? ;)

I agree the intangibles are worth something perhaps linked to the existing network in place.

They may place a slightly improved offer, but I wouldn't be surprised they do nothing for now.

They would have asked their banker what are the chances that the debt get refinanced based on available information. Perhaps they have some idea if there is anyone interested in the aus bus.

I think it is a unique takeover situation because of the moving parts of whether the aus bus gets sold or the debt can be refinanced.

Anyway I previously thought they had 50% between the two parties. But appears that it's a combined 25% shareholding.

I don't hold or intend to. The potential distressed aspect may influence the valuation figure so happy to watch. More of a case study for me.

[winner69]

Wells a bit peeved ….possibly more than a bit peeved

This could all get a bit ugly ……ASM will be a must watch. Last years was hilarious ….this years will be even better I reckon

NBR article (prob paywalled) but headline says it all

Metroglass board response 'surprising, disappointing', Wells says

https://www.nbr.co.nz/investment/metroglass-board-response-surprising-disappointing-wells-says/

[moimoi]

Perhaps goes some way to explaining the somewhat inexplicable reason not to cap raise in days gone by ...

Perhaps 25.12% of the shareholder base were resistant, preferring instead to pick up the whole company for peanuts, once it's market cap had collapsed sufficiently to become an un-supportable proposition by 3rd parties...(ie: Banks)

GLTA.

[Balance]

Perhaps goes some way to explaining the somewhat inexplicable reason not to cap raise in days gone by ...

Perhaps 25.12% of the shareholder base were resistant, preferring instead to pick up the whole company for peanuts, once it's market cap had collapsed sufficiently to become an un-supportable proposition by 3rd parties...(ie: Banks)

GLTA.

A CR would suit Masfen & Wells - they can underwrite and pick up lots more 'cheap' shares.

[Gerald]

Would some generous soul be able to send me a copy of the NBR article? Very interested, thanks.

[curious zebra]

Just in case you still haven't seen the NBR article:
NBR Lister Peter Wells (https://www.nbr.co.nz/peter-wells/) said he is surprised by the tone, brevity and dismissive nature of the response from the board of Metro Performance Glass to his and the Masfen family’s (https://www.nbr.co.nz/masfen-family-3/) 18 cents a share bid to buy the business.

And he told NBR why the pair want to buy the listed glass producer, having given it significant review over several months.
Yesterday morning, (https://www.nbr.co.nz/investment/nbr-listers-peter-wells-peter-masfen-team-up-for-metro-takeover/) shareholder notices released to the NZX showed that Wells’ Takutai Ltd and Masfen’s Masfen Securities had struck an agreement to try and acquire the assets of the glass producer.
They collectively owned just over 25% of the company and their agreement, advised by Dentons Kensington Swan, stated they would “work together in connection with the potential acquisition by them (and/or one or more special purpose vehicles established by the parties) of all or a substantial part of the ordinary shares in MPG or MPG’s assets and business” by way of a scheme of arrangement.
The company went into a trading halt, having closed at 15.7c a share yesterday, while it prepared a response.
That response, released yesterday afternoon, said a consortium led by Takutai had made an unsolicited, non-binding, indicative proposal to purchase Metroglass in cash via a scheme of arrangement at 18c a share.
The deal also specified a number of other conditions, including due diligence on an exclusive basis, negotiation and execution of a scheme implementation agreement, and endorsement and support for the proposal from Metroglass’s board of directors.
Metroglass also indicated it was the second such approach, coming after Masfen and related parties had enquired confidentially in May and June about acquiring the company.
Both the earlier enquiries and today’s offer were substantially the same, Metroglass said, and financial adviser Jarden and legal adviser Bell Gully, along with the company’s board of directors, had decided “they significantly undervalued Metroglass … and that it is not in the best interests of the company and its shareholders to progress the proposal”.
Metroglass added it was continuing to progress the Australian Glass Group (AGG) divestment process and would provide an update on that process in due course. Jarden is also advising Metroglass on the AGG divestment process.
The company’s share price closed at 19c a share yesterday.
In a statement, Wells told NBR they were surprised by the tone the board had taken to its approach.

“Whilst both pieces are clearly heavily influenced with legal advice, the brevity and dismissive nature is somewhat disappointing,” he said.
“The board has taken the approach to disclosing certain details of our offer. We appreciate that the board is responsible for its own market disclosures, but also believe that they could have done more to provide a fuller picture for shareholders.”
The 18c a share scheme valued the company at just over $33 million, but including the company’s $60.1m debt – as disclosed in May – the enterprise value of the offer was $93m.
Wells said they were encouraged the board’s statement yesterday said it remained “committed to value maximisation and acting in the best interest of Metroglass and our shareholders” given he and Masfen were 25% holders, but said how to achieve those goals was a question of commercial judgment.
“On this level we disagree with the board”.
A main area of disagreement was whether the company should sell its Australian business or not.
NBR has previously reported the opposition of Masfen, Wells and Bain Capital to selling the well-functioning Australian business to shore up the New Zealand operation, while another investor, Bruce Sheppard, described the move (https://www.nbr.co.nz/) as akin to losing the arm to save the body.
The Wells and Masfen plan – they have had discussions with Bain while working on their proposal – was to keep that business and maintain Metroglass “as a significant player in the trans-Tasman glass business”.
“AGG was bought only six years ago for A$43m. It is performing well and has future potential.”
Wells said their plan would include paying down $40m of debt to make the balance sheet ready for expansion.
Peter Masfen.

Best way forward
Wells’ statement also set out the company’s recent history.
He said the company had enjoyed 19 years of very successful private ownership followed by eight years with two private equity firms and then nine years on the stock exchange. The company floated in 2014, raising $244.2m of which $230.5m went to the PE firms.
“Through that history of 36 years MPG has become an integral and significant part of the construction sector here, and latterly in Australia,” Wells said.
But he said the last three years were breakeven from a profit and loss perspective and in their view, nobody was going to invest with the current results. That had been shown by the share performance, he said (down 30% in the last year).
“MPG is a sub scale size for public ownership – the inherent costs are not able to be passed on to the industry they operate in,” he said. “MPG are in a corner over their debt position – the board signalled their lack of confidence in any ability to trade out of the problem, by deciding to sell AGG.”
He added that even if they did sell AGG and retired debt back to comfortable less, it would be of even less scale.
“Economically, timing for a sale is not optimum, whilst none of us can predict the outcome,” he said. “If no sale evolves, we are back to status quo in a New Zealand economy that is going to be extremely challenging.”
Other benefits of going private would include: providing liquidity to the current shareholders, and keep jobs secure for Metroglass staff; taking debt levels to a very conservative level with cashflow benefits; removing public company costs and providing a hedge to the trading conditions envisaged; and a closer relationship between senior management and experienced owners.
“We have given this initiative significant review over several months. As New Zealanders we are firmly of the opinion that, on balance, the benefits of our MPG plan are the best way forward. To keep a large, long term NZ company intact and with capabilities to perform to its optimum is our goal.”
Wells said he has had no further contact with the board since it issued its response yesterday.

In November last year (https://www.nbr.co.nz/investment/redundancies-expected-at-metroglass/), Metroglass announced more cost-out and job losses, warning its imported raw glass was suffering price hikes like all global commodities and would have to institute price hikes, against the backdrop of a softening New Zealand market.
At that stage, Wells owned just less than 10% of Metroglass, and told NBR that despite the gloomy outlook he was “not a seller” of the stock. He did view the global factors affecting it and other such businesses relying on imported commodity inputs with some concern, however.
“And if you take interest rates, for example, they have not hammered home yet – we’ll see that next year – and it’ll be interesting to see what that means.”
Rhys Jones is the managing director of Vulcan Steel, founded by Wells, and is also a member of the Metroglass board.


Hamish McNicol (https://www.nbr.co.nz/author/28) Wed, 19 Jul 2023


(https://twitter.com/h_mcnicol17)

[Fortunecookie]

Thanks for the article CZ.
It will be interesting to see if they can achieve a reasonable sale price for the aus bus given the environment. No point selling it at a give away price if doesn't clear the majority of the debt.

[winner69]

From Vulcan -

Speculation on Vulcan Steel’s interest in Metro Performance Glass Vulcan (ASX: VSL, NZX: VSL) is aware of recent media reports speculating that the company is in some way associated with Peter Wells, Vulcan’s founder and former director who remains a substantial shareholder (through his interest in Takutai Limited), and who together with an associate has initiated a proposal to acquire Metro Performance Glass Limited (NZX: MPG). Vulcan wishes to clarify that this is not the case and that it has no financial or commercial interests, directly or indirectly, in that proposal.

But you never know what May happen

[Balance]

Thanks for the article CZ.
It will be interesting to see if they can achieve a reasonable sale price for the aus bus given the environment. No point selling it at a give away price if doesn't clear the majority of the debt.

Would not be holding one's breath on a good price for the Oz business, if a sale occurred at all. Been 5 moths since they put the business up for sale and if it was going to happen, would have happened by now.

Meanwhile, VSL has come out to state it has no interest, despite rumors, to buy MPG.

https://www.nzx.com/announcements/415022

Banks are in control imo so if Masfen & Wells are genuinely interested, there's a deal to be done.

[Sideshow Bob]

Would not be holding one's breath on a good price for the Oz business, if a sale occurred at all. Been 5 moths since they put the business up for sale and if it was going to happen, would have happened by now.

Meanwhile, VSL has come out to state it has no interest, despite rumors, to buy MPG.

https://www.nzx.com/announcements/415022

Banks are in control imo so if Masfen & Wells are genuinely interested, there's a deal to be done.

They own quarter of the company between them, so they no doubt think they are better to double down rather than taking their chances with the board continuing on their current path.

[Balance]

They own quarter of the company between them, so they no doubt think they are better to double down rather than taking their chances with the board continuing on their current path.

Theirs was a very highly conditional offer, subject to a multitude of conditions - hardly doubling down but more like wanting the company to 'open-kimono' so they get to know what the hell is really going on, especially with the sale of the Oz business.

If they are serious, they just need to talk to the group's bankers - that's how distressed company deals can get done.

[Fortunecookie]

Would not be holding one's breath on a good price for the Oz business, if a sale occurred at all. Been 5 moths since they put the business up for sale and if it was going to happen, would have happened by now.

Meanwhile, VSL has come out to state it has no interest, despite rumors, to buy MPG.

https://www.nzx.com/announcements/415022

Banks are in control imo so if Masfen & Wells are genuinely interested, there's a deal to be done.

I agree with you Balance. Feels like it is tilting towards a distressed situation. Banks are only concerned about getting paid back in full.

[Balance]

Also, MPG’s sp had been tracking higher anyway in the last month or so.

The announcement disclosed that the company had already been approached by Masfens in May/June so have there been ‘leaks’ and ‘speculations’?

Otherwise, the 18c offer represents a rather hefty premium to the low price that MPG fell to last month.

[winner69]

Reading between the lines of that NBR piece it seems Wells doesn’t rate current management that highly and adds being listed is a bit of hindrance to Metro in this sector ……seems Wells wants to be become more involved as an owner in running the place. No doubt he would be successful.

Wonder if he’ll show up at the ASM?

[Popeye]

I would back Wells over the current board who have presided over this apparent slow death. Sure some bad luck with covid and a slowing economy and all, but when a business is forced by banks to sell (large) bits of itself to repay them it is not exactly a vote of confidence in their future. I suppose for the board to support such an offer would be a bitter pill for them to swallow, as it would effectively be an admission of defeat on their part. They may claim that the business is "substantially undervalued", however neither the banks nor investors agree. As commented above, banks are the ones in control, this Wells comment sums it up most succinctly:

“MPG are in a corner over their debt position – the board signalled their lack of confidence in any ability to trade out of the problem, by deciding to sell AGG.”

All in all the Board probably need to just negotiate the best deal for shareholders and get out of the way. They have done enough damage...

[X-men]

Poorly managed company...

STU was once like MPG...It took Mark 3 years to turn the company around. Now STU has no debts n $6.5m cash...

[winner69]

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. Cynically you could say they let a new committed competitor make big inroads into their sales as well.

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.

[winner69]

The Vulcan guy resigns as Metro Director

He had no choice eh

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

[winner69]

The 18 cents offered doesn’t sound much but jeez it’s 40% higher than 13 cents the share was less than a month ago (June 30th)

And was trending down at the time …might have been 12 cents or less now

But something triggered a bit of buying early July ….hmmm

[Balance]

The 18 cents offered doesn’t sound much but jeez it’s 40% higher than 13 cents the share was less than a month ago (June 30th)

And was trending down at the time …might have been 12 cents or less now

But something triggered a bit of buying early July ….hmmm

Surely no leakage.

MPG only installs double glazed windows!

[winner69]

Surely no leakage.

MPG only installs double glazed windows!

And glass doesn’t leak Balance ….it’s always the steel frame that’s at fault (or aluminium)

[Sideshow Bob]

Address & AGM preso for Metro (lack of) Performance Glass

https://www.nzx.com/announcements/415555

[Gerald]

Winner was right - shareholder just called the company a pig :t_up:

[winner69]

Graham Stuart unceremoniously dumped as Director at ASM

Losing his job at ERoad soon as well

Grandkids will love him now

[Leemsip]

Debt up $8m since last year to $60 large...
gosh

[Balance]

Graham Stuart unceremoniously dumped as Director at ASM

Losing his job at ERoad soon as well

Grandkids will love him now

Probably relieved to be voted out?

He already has numerous flea bites from the MPG dog!

[winner69]

Seems punters giving up hope of a takeover as share price drifts down to 17 cents

No news on aussie sale yet ….and results announcement not due until late November

If nothing said soon share price probably back to 14cents soon.

[winner69]

Been quite in the world of Metro Glass and share price is getting close to 13 cent something again ……where it was before they told those dudes to bugger off with their 18 cent takeover offer.

And no doubt Australia sale progressing well.

Suppose no news from Metro is good news …….we’d probably been told if the banks had called the receivers in

[winner69]

New Director

Maybe Metro going back to being owned by Private Equity?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/420367/405611.pdf

[BlackPeter]

New Director

Maybe Metro going back to being owned by Private Equity?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/420367/405611.pdf

Interesting idea. I think private equity listed them 10 years ago for something like $1.75. If they now buy back for less than 10% of that ... to slice it and sell the bits ?

I am sure there are some good pieces they could cut out (like the Australian bit), some of the factories might be interesting for the competition and both the logistical network as well as the customer database might be of value to them as well?

Private Equity adding value :scared: ?;

[winner69]

See that new guy spent many years at Wellington Drive ……but shouldn’t hold that against him

[Leemsip]

Interesting... new guy is the one to bring in if you want to sell up.

Trouble is the $60m debt.

[nztx]

Reporting time looms again

Have the Big Boys stopped showing interest as the SP sags .. or just waiting for a few more
nails to be driven into the coffin ? ;)

[Sideshow Bob]

https://www.nzx.com/announcements/422573

Metroglass provides 1H24 results (unaudited)

• The Group delivered earnings result in line with August guidance supported by solid profitability in Australia. Residential construction sector softness impacted the New Zealand business.

• New Zealand revenue declined 13% year on year partially offset by the increase in higher value LowE sales. Easing supply chain costs helped drive margin recovery.

• AGG delivered further profitability growth with an EBIT before significant items up 79%, to $4.6 million.

• Group EBIT before significant items improved 33% to $7.5 million supported by increased LowE sales, easing supply chain costs, and the cost-out programme in New Zealand, and solid AGG earnings.

• Net debt at the end of the period was $52.8m, in line with August guidance.

• A $9.1 million impairment to intangible assets due to the outlook for the New Zealand construction sector resulted in a statutory net loss after tax of $9.2 million, down from $0.6 million profit in 1H23.

Metro Performance Glass (Metroglass) today reports its financial results for the 6 months to 30 September 2023 (1H24), achieving profitability growth in Australia as softer market activity impacted the New Zealand business.

Group Revenue for the six months to 30 September 2023 of $130.2 million was 6% lower than the prior year, with New Zealand down 13% and Australia up 13%. Group EBIT before significant2 items rose 33% to $7.5 million in line with August guidance.

NPAT before significant items3 increased on the prior year to $2.1 million profit. A $9.1 million impairment of intangible assets resulted in a statutory net loss after tax of $9.2 million.

Net debt decreased $6.3 million to $52.8 million at 30 September 2023 also in line with August 2023 guidance. The reduction was driven by a reduced working capital in the form of inventory as supply chain reliability improved. Debtor and creditor profiles reduced also as a direct result of the softer trading conditions. Metroglass’ net debt to EBITDA ratio improved to 2.69x at 30 September 2023 from 3.8x in the prior period.

New Zealand
Revenue declined 13% to $87.0 million with softer market activity partially offset by a higher mix of LowE glass sales. Gross profit margin recovered as supply chain pressures eased.

In the highly competitive residential channel, revenue of $54.8 million was 16% below the prior year primarily as lower activity was partially offset by increased LowE glass sales. The commercial glazing channel was steady with revenue flat on the prior year at $19.0 million, however the time between tender and project acceptance has extended. The business has a small number of legacy contracts at pre-price increase rates which impacted profit margins. Retrofit revenue declined 16% to $13.2 million as cost-of-living and interest rate pressures deferred consumer spending with many customers opting for partial house retrofit rather than full house.

Mr Mander said “It has been a challenging year for the New Zealand business, while supply chain volatility has eased, economic pressures have softened the construction sector. These challenges are expected to continue, and our focus remains firmly on operational efficiency and positioning the company to meet the needs of a changing market.”

Australian Glass Group (AGG)

AGG delivered stable and resilient performance with the high performing double-glazing market appearing to be holding. AGG achieved further profitability growth in the first half. The business remains focused on optimising volume and pricing as a result of the slowing residential market.

In February 2023 Metroglass announced a sale process for AGG which continues to advance, the board is targeting an announcement in the near future. If a suitable deal can be concluded the board will bring the offer to shareholders at an extraordinary meeting in the new year.

Market conditions and outlook

In New Zealand the 12-month rolling residential consents have declined and while they are still above long-term trends, glass demand has fallen significantly.
Demand for construction materials decreased across the sector and forecasts remain uncertain for FY24. It is the company’s view that these conditions are likely to continue until inflation pressures and interest rates ease.

While ensuring we deliver quality products, safely and with excellent customer service, the company is resizing itself to ensure it is efficient for the changing market demand.

With current market volatility it is difficult to forecast New Zealand earnings for the balance of the year, however it is anticipated that the New Zealand business will continue to be operating cash positive.

In Australia the number of detached dwelling commencements declined in all states. However, the increasing use of double glazing in residential buildings is expected to partially offset the declines in residential construction activity.

As previously announced in the sale process, for the 12 months to 31 March 2024, management forecasts are for AGG to achieve revenue, EBITDA and EBIT of approximately AUD 79.0 million, AUD 11.5 million, AUD 7.5 million respectively.

Note: all non-Generally Accepted Accounting Principles (GAAP) financial measures are defined to a GAAP measure on slide 13 of the 1H24 results presentation, available here: https://www.metroglass.co.nz/investor-centre/investor-presentations/.

1 All prior period comparisons are to the half year ended 30 September 2022 (1H23) unless otherwise stated.
2 Earnings before interest, tax, and significant items (1H24: Impairment of New Zealand intangible assets, restructure of New Zealand operations, AGG divestment (See note 2.2 of the 1H24 financial statements), 1H23: none).
3 NPAT before significant items (1H24: Impairment of New Zealand intangible assets, restructure of New Zealand operations, AGG divestment (See note 2.2 of the 1H24 financial statements), 1H23: none)
Ends/

[winner69]

MPG share price slip sliding away and heading back into the 12’s

Like their service levels progress on sale of Aust outfit and debt reaction is very slow.

Wonder what Masfen and Wells are scheming now …..

18 cents last July sounds good now

[bulltrap]

https://www.nzx.com/announcements/422573

In February 2023 Metroglass announced a sale process for AGG which continues to advance, the board is targeting an announcement in the near future. If a suitable deal can be concluded the board will bring the offer to shareholders at an extraordinary meeting in the new year.



The lunar new year is upon us, and still not a peep.

It'd be a hard sell to get a good price for the Aus operations, if that's more than the perceived value of the entire company. That is, unless the sales pitch convincingly values the NZ arm as less than worthless.

Me: Holding, but happy to sell up for 18c if the offer's still on the table. That's per share, mind you.

[winner69]

MPG share price up 9% on Friday

Must have sold Australian outfit?

Nothing in AFR though

[Sideshow Bob]

MPG share price up 9% on Friday

Must have sold Australian outfit?

Nothing in AFR though

When the SP is just over 10c, then any movement is a big movement......:mellow:

[winner69]

Oh dear …seems to be bad news

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/427530/414369.pdf

[nztx]

Oh dear …seems to be bad news

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MPG/427530/414369.pdf


B&g-r - down 12% just like that .. but hey - we all knew this was the likely scenario :)

There wasn't much noise coming out of the glass box to reflect much excitement ..

A fast fix might be to sell the Kiwi Job & move to an Aussie ASX listing

Someone is bound to come along sooner or later wanting to take over what's left .. the Aussie Job & Company
for a fairly good bundle .. maybe the same suckers who took a shine to the Kiwi side but who knows ? :)

Happy days all round for those who lasted the ups, downs & long wait ;)

[bulltrap]

B&g-r - down 12% just like that .. but hey - we all knew this was the likely scenario :)

There wasn't much noise coming out of the glass box to reflect much excitement ..

A fast fix might be to sell the Kiwi Job & move to an Aussie ASX listing

Someone is bound to come along sooner or later wanting to take over what's left .. the Aussie Job & Company
for a fairly good bundle .. maybe the same suckers who took a shine to the Kiwi side but who knows ? :)

Happy days all round for those who lasted the ups, downs & long wait ;)

They do already have the ASX listing, MPP.ASX. There's no liquidity there, so it's easy to ignore most days.

So yeah, domiciling in Aus could be a straightforward step, maybe in the right direction.

Let's hope the leaner, refreshed board is more open to alternative possibilities to selling the AGG arm. It's clear by now that it's not good timing to sell, and the approach hasn't washed well with the market or major shareholders.

The more you carve up a company, the weaker and more vulnerable the parts become. Rolling it all up into a larger vertical (that is, a full acquisition) would make more sense, and should've happened years ago.

[winner69]

Goodness gracious ……. MPG share price went below 10 cents today

No wonder Chair resigned the other day …..embarrassing ….and wouldn’t want to front up at another ASM


That’s a pity …..ASM we’re a great watch lol

Edit. Deleted reference to Waterman …my bad

[stoploss]

Goodness gracious ……. MPG share price went below 10 cents today

No wonder Chair resigned the other day …..embarrassing ….and wouldn’t want to front up at another ASM …seeing Waterman put him pre IPO to add ‘respectability’ to the Board

That’s a pity …..ASM we’re a great watch lol
Winner what’s the Waterman reference about ?

[winner69]

Winner what’s the Waterman reference about ?

Sorry my bad …getting confused with MFB lol

Griffith was appointed shortly after the IPO to further ‘beef up’ the board

[whatsup]

.10 wow, I guess this was always going to happen and a very long way from its 2016 $2.00, Q is will they survive and if so HOW ?

[Leemsip]

Huge issues which seem hard to resolve:
- debt is still @ $55m.
- revenue will decline for the next 2 years following building consents

They can cut costs on the margins and raise prices, but only so far. I think the $55m anchor will drag them down.

Wow the new director Jen Bestwick didnt last very long, had no idea what she was getting into obv.... next time she might do some due diligence

[whatsup]

Huge issues which seem hard to resolve:
- debt is still @ $55m.
- revenue will decline for the next 2 years following building consents

They can cut costs on the margins and raise prices, but only so far. I think the $55m anchor will drag them down.

Wow the new director Jen Bestwick didnt last very long, had no idea what she was getting into obv.... next time she might do some due diligence

So another SML ?

[Leemsip]

SML has assets. Not sure MPG have anything to sell that will be good for the company... If they sell Oz part of the business they are left with an under performing NZ outfit with high fixed costs and overheads....

Need an equity raise (like 2 years ago), to get rid of the debt. Been following this company for ages. I sold out at 45c or so I think.... waiting for them to turn the corner or raise some equity.

[t.rexjr]

- revenue will decline for the next 2 years following building consents

I suspect we've reached the low end of consenting and are starting to turn the corner. The construction industry is in a lot of pain but the cogs (slow though they may be) are in motion.

[nztx]

They do already have the ASX listing, MPP.ASX. There's no liquidity there, so it's easy to ignore most days.

So yeah, domiciling in Aus could be a straightforward step, maybe in the right direction.

Let's hope the leaner, refreshed board is more open to alternative possibilities to selling the AGG arm. It's clear by now that it's not good timing to sell, and the approach hasn't washed well with the market or major shareholders.

The more you carve up a company, the weaker and more vulnerable the parts become. Rolling it all up into a larger vertical (that is, a full acquisition) would make more sense, and should've happened years ago.


might be in need of a necessary deed of chucking the side of the ditch's operations with least favourable prospects to improve on the block for some other poor sucker to take away to play games with for whatever gets thrown in the begging bowl - to avoid the whole lot falling off the chocks if no improvement likely within a couple of years.. otherwise how will it survive ?

Or perhaps even a nasty Reverse dividend / aka Cap Raise @ say 5 cps- no tax credits or withholding tax needed into MPG's begging bowl likely to go down well with all the long suffering boys & girls - on Doctor's orders to keep the outfit out of the ditch for a while ? ;)

[whatsup]

might be in need of a necessary deed of chucking the side of the ditch's operations with least favourable prospects to improve on the block for some other poor sucker to take away to play games with for whatever gets thrown in the begging bowl - to avoid the whole lot falling off the chocks if no improvement likely within a couple of years.. otherwise how will it survive ?

Or perhaps even a nasty Reverse dividend / aka Cap Raise @ say 5 cps- no tax credits or withholding tax needed into MPG's begging bowl likely to go down well with all the long suffering boys & girls - on Doctor's orders to keep the outfit out of the ditch for a while ? ;)

I think that they should delete the P out of MPG !!

[Sideshow Bob]

I think that they should delete the P out of MPG !!

Plenty of performance.....

Doesn't say whether it is good or high performance!! :scared:

[JeremyALD]

SML has assets. Not sure MPG have anything to sell that will be good for the company... If they sell Oz part of the business they are left with an under performing NZ outfit with high fixed costs and overheads....

Need an equity raise (like 2 years ago), to get rid of the debt. Been following this company for ages. I sold out at 45c or so I think.... waiting for them to turn the corner or raise some equity.

Not sure how they would raise equity when the whole company is worth $18m and they owe $55m. It would completely destroy equity of existing holders who couldn't participate.

[whatsup]

Not sure how they would raise equity when the whole company is worth $18m and they owe $55m. It would completely destroy equity of existing holders who couldn't participate.

IMHO I think any and all investors should go back and read and reread the prospectus of its relaunch, the writing was on the wall then, Im surprised that it has taken this long for this to become evident !!

[bigbruce]

IMHO I think any and all investors should go back and read and reread the prospectus of its relaunch, the writing was on the wall then, Im surprised that it has taken this long for this to become evident !!

Seen this before-- Feltex private equity sale to ma and pa's

[nztx]

Plenty of performance.....

Doesn't say whether it is good or high performance!! :scared:



the best performance might have been jacking up the job on intangibles, a heap of debt to match and floating
the outfit off at outset for those who thought it looked better off their hands ;)

[Leemsip]

MPG down through 10c today.

Residential market for glass in decline, as new building comes off the highs... this will just smash profitability, as sales lower on a fixed cost base.

Need a quick $50-60m or so to pay off the debt, but total market cap only $20m at this point....

If they dont want to hand the keys back to the bank, they need to do a highly discounted cap raise IMO (what other way out is there). My rough calc is they need to issue 1 billion new shares at 5c per, to get the $50m needed. 200mill shares on issue now, so may as well just use them as tissues to wipe the tears of shareholders up and then bin them. Luckily the board and exec havent bought any shares, so should be sweet.

Looking forward to their May update!

[t.rexjr]

MPG down through 10c today.

Residential market for glass in decline, as new building comes off the highs... this will just smash profitability, as sales lower on a fixed cost base.

Need a quick $50-60m or so to pay off the debt, but total market cap only $20m at this point....

If they dont want to hand the keys back to the bank, they need to do a highly discounted cap raise IMO (what other way out is there). My rough calc is they need to issue 1 billion new shares at 5c per, to get the $50m needed. 200mill shares on issue now, so may as well just use them as tissues to wipe the tears of shareholders up and then bin them. Luckily the board and exec havent bought any shares, so should be sweet.

Looking forward to their May update!

I suspect residential building consent #'s have bottomed. That'll mean May is still gloomy reading but the following update should start to see small upticks in residential throughput. Whether they are able to maintain margin is another thing though

[Lego_Man]

Mander gone, Aussie sale fallen through, cap raise incoming.

[Leemsip]

$15m cap raise. This still leaves $35m debt, with reducing revenue impacting ebitda. Who is going to buy this cap raise.

[winner69]

$15m cap raise. This still leaves $35m debt, with reducing revenue impacting ebitda. Who is going to buy this cap raise.

Yep, thought the same $15m not much

[Balance]

$15m cap raise. This still leaves $35m debt, with reducing revenue impacting ebitda. Who is going to buy this cap raise.

$15m? Why bother!

If they are going to recapitalise, do more than enough in one go - do $30m.

Otherwise, it’s will be throwing good money after bad.

[Greekwatchdog]

They paid the price for ignorance and Arrogance. Now they can't win it back. Losing biggest customer hasn't helped as they haven't replaced it with anything substantial.

Just liquidate the business.

Good luck to you shareholders.

[winner69]

So the Olympic yachtsman is leaving Metro after 5 years ..amazed he’s lasted that long.

[winner69]

Going to do a lot with that $15m …..’ progress a capital raise to further reduce its debt level, create the conditions for AGG to grow and improve the New Zealand business.’

[winner69]

So ‘company are in the process of updating their outlook for FY25 and will provide an update when this process is complete.’ Bought back memories from 2018/19 when I ‘assisted’ them in updating their forecasts.

They told me I was too pessimistic about market size etc and couldn’t see the big picture ha ha ……and went ahead with their forecasts. In retrospect I was too optimistic but haven’t been surprised with the number of downgrades and sad stories since.

[bulltrap]

The ASX listing awoke from a months-long slumber today, and is now down almost 50% - and still hovering above the NZX closing price :scared:

I hope the board takes that as a vote of no confidence for the recapitalization plans, and a big 'For Sale' sign aimed at anyone interested in buying a $250M-a-year glass processor at a bargain price.

Doesn't have to be cash, will consider equity swap for the likes of VSL, STU or even (yikes) FBU. It'll need some investment, but the rate of return should be pretty good as it's offsetting bank debt.

From the perspective of a shareholder with shallow pockets, anything will be better than this cap raise, which is likely to be nothing short of homeopathic in its dilutory effect.

[JeremyALD]

The ASX listing awoke from a months-long slumber today, and is now down almost 50% - and still hovering above the NZX closing price :scared:

I hope the board takes that as a vote of no confidence for the recapitalization plans, and a big 'For Sale' sign aimed at anyone interested in buying a $250M-a-year glass processor at a bargain price.

Doesn't have to be cash, will consider equity swap for the likes of VSL, STU or even (yikes) FBU. It'll need some investment, but the rate of return should be pretty good as it's offsetting bank debt.

From the perspective of a shareholder with shallow pockets, anything will be better than this cap raise, which is likely to be nothing short of homeopathic in its dilutory effect.

I wonder if they regret rejecting the takeover of 18c per share last year which they said 'significantly undervalued' the company. Well it's now 7 cents a share and likely to raise capital well below that.

[bulltrap]

I wonder if they regret rejecting the takeover of 18c per share last year which they said 'significantly undervalued' the company. Well it's now 7 cents a share and likely to raise capital well below that.

I suspect that at the time, it would've passed a shareholder vote to proceed to negotiation, had a special meeting been called. But I'm also skeptical that it could've eventuated in a sale - maybe it was just a pretext to peek at the books.

This scenario plays out time and time again, with seemingly generous takeover offers being shunned by boards, who are supposed to be acting in shareholder interests. And often those board members hold negligible shares themselves, instead having a rational self-interest in continuing to bank director's fees as long as they can. STU, MPG, SKT, ERD, RAK, ... and no doubt more that we know of, and more that we don't.

Not sure if my MP is listening, but I'd suggest some reform for public company governance:



Directors must have at least an X% or $Y shareholding interest, and their fees are not to exceed Z% of the value of that interest.
Takeover offers at a premium of at least W% to market cap must be announced, and put to a shareholder vote.


I suppose each company's corporate charter could enshrine provisions like these, but having it legislated across the board (heh) would be for the good of the public.

[Leemsip]

I agree bulltrap. Low quality board members lacking focus and a stake in the company.
7.5c holy smoke. Hard to raise capital at this price.

Basically any cap raise is doing a favour to the banks who are on the hook for >$50m.

[whatsup]

I agree bulltrap. Low quality board members lacking focus and a stake in the company.
7.5c holy smoke. Hard to raise capital at this price.

Basically any cap raise is doing a favour to the banks who are on the hook for >$50m.

IMHO "if" one goes back and reads the prospectus/ floating docus it does not surprise me that me that this outfit is where they find themselves at present, I think that the current or former fish heads stripped all of the readies from the blance sheets and replaced that with borrowing and then to add insult I dont think that they were major investors in the rebatched company.
Talk about Feltex sometime.

[Leemsip]

Be sweet if the old owners came through and re-capitalised, took private, replaced the board, loaded up with debt and refloat in 2026...

[winner69]

IMHO "if" one goes back and reads the prospectus/ floating docus it does not surprise me that me that this outfit is where they find themselves at present, I think that the current or former fish heads stripped all of the readies from the blance sheets and replaced that with borrowing and then to add insult I dont think that they were major investors in the rebatched company.
Talk about Feltex sometime.

Not quite true about the borrowings

Post IPO wasn’t excessive but it blew out with large capital spend on modernising plant and borrowing to acquire that Aussie outfit

Theybthen have struggled to generate much in the way of cash from operations ….hence their dcurrent dilemma

Sad really

[kiora]

Be sweet if the old owners came through and re-capitalised, took private, replaced the board, loaded up with debt and refloat in 2026...

MFB more likely to have old owners come through ?

[Greekwatchdog]

This thing should just be liquidated. If there were serious about saving this they would see there property they sit on and lease it back.

They will need to raise 300m shares @ $0.05ea. to get that $15m assuming share price doesn't go below, then a month later maybe do a share consolidation and then do another CR to raise more money to stay afloat.

Fancy turning down $0.18 takeover and putting shareholders thru this.

Private Equity is only hope as they own 1 of their major competitors in NZ and they perform.

[Balance]

MFB more likely to have old owners come through ?

Been there, done that.

Why would they bother? Especially when nobody is going to trust them again to buy off them again!

[kiora]

MPG is even less likely for previous owners to come back in?

[percy]

MPG is even less likely for previous owners to come back in?

Current market cap is under $14mil,which will make a $15mil cap raising difficult.

[kiora]

I'm sure they've well and truly moved on

[whatsup]

Not quite true about the borrowings

Post IPO wasn’t excessive but it blew out with large capital spend on modernising plant and borrowing to acquire that Aussie outfit

Theybthen have struggled to generate much in the way of cash from operations ….hence their dcurrent dilemma

Sad really

IMHO, my point being "if " the funds wernt stripped out then no borrowings would have been needed and the company could have weathered the storm.