So... confirmation on the vote. Looks like if they've floated this past a few of the bigger players in the top25 holders (who now own 87.5%, t he top5 have 68.7%) this will be fairly easy to pass the SIA through. Disappointing really, but assuming the "independent" report comes back with a thumbs up and no other buyer eventuates, 8.6c looks to likely be the reality...
"If 75% of the shares voted and 50% of shareholders who vote, are in favour of the Scheme, a Court will then be asked to approve the Scheme and subject to that approval, the Scheme will be implemented and the Company’s shares suspended from trading. All shareholders will then be sent the cash consideration for their shares held regardless of their vote."
Turnover/ Holdings:
Looks like Donnison has sold out the bulk of his holdings in the past FY, possibly before the recent appreciation as there were some chunky parcels around 6.5c earlier in the year.
Top 25 increased from 85.5 to 87.5% (even with Donnison selling out)
Total MLA shareholders reduced from 591 to 567, which I'd imagine will have consolidated further given some of the smaller irregular sized parcels (<10k) going through since the recent SIA.
The number with a less than marketable share (6,025 shares) has decreased from 295 to 259
Working Cap/Cash:
Huge improvement (IMO) vs previous years. Bank deposits and working capital back at healthy levels. Business still generating solid cash, and even with the loss of $1.6m OEM business, MLA should still be cash-flow positive - this is assuming no improvements in other sales or further expense management.
Sales:
- 11.1% (approx $1.4m) of the companies revenue is attributable to one customer, vs 11.4% in 2016. This notional amount is largely unchanged, as the largest customer was $1.4m previous year. This indicates FY17 sales growth been largely through new, or smaller existing accounts. Still huge opportunity in the Ardo market which seems in its infancy in terms of potential (excuse the terrible pun).
- Sales growth projected to be -5% @ Tuta and +19% @ Clements, indicating that Tuta will largely be flat following the loss of the OEM contract, with Ardo projected to drive MLA's growth next year.
- Reduction in inventories impairment, (likely through stock obsolescence) decreased from -158k to -119k, indicating better inventory management and higher stock turnover. Receivables impairment has trended in the right direction too, falling from -84k (2016) to -13k (2017), - this was -130k in 2015.
Other:
- Staff training and recruitment increased this year from 56k to 91k, This was 0 in 2015, so assume if the sales team reaches maturity in terms of size, that this is potentially a one-off. This correlates to the staff numbers increasing from 24 to 28 this year.
- Previous year's provision for previous year's doubtful debts was credited in expenses indicating that half of previous years B&D debts were recovered (18k of 35k) which is reassuring, as would expect very few credit issues in this industry.
- Advertising spend has increased from 66k to 152k in the past year, indicating the business is attempting to grow aggressively, this aligns with an increase in Employees and also Travel & Accommodation cost spend by +60k to 481k.
