Ann: Trading Update, page-43

another way of skinning said cat:

in good to boom years (high OP) - MRM (and the rest of the industry) sees ultisation rates > 85-90%, and as such - is able to inc day rates on vessels, and charge a premia for access to personal at call .......

in average times - utilisation rates circa 70-75%.......day rates fall back so that the quality operators are used, while the lessor operators (safety / plant breakdown while on a job etc) get pushed aside ....

during a crash - all operators are in the range 30-45% (and in this cycle - due to additional capacity brought online due to high prices - we are seeing a large number of vessels dry-stored / scrapped).......day rates fall 30-50%...

then one can ask what sort of ROA / ROE can be earnt during each period ..........this is typical of any cyclical business !!!!!!!!!!!!!!!!!!!!!!

concur GoldB - mr market is more than smart enough to work out forward capital requirements for a lot of companies .......and it ensures that if required .....that the "new" investor essentially sets the rate of return ...........burning the exsisting punters .....

imho - the reason the banks delayed - is simply a cashshort fall inside of MRM .........one can do the basic math......47 - 37.5 - GG&A +(announc asset sales) - cost to hold excess inventory + op cash generated..basically - they would have been "tipped in" had they been forced ......

so - short circa 70-100m (b/c they will have to have suffiecnt cash for the next payment .....) - this is why its trading at a discount !!!!!!!!!!!!!!!!!!!!!!!! (imho)..

also b/c of where its trading (mk cap << net asset value) - directors will be forced to do a c/flow analysis of each CGU in the next set of accounts .....

will be interesting to see where this goes.......I love the leverage (operationally to eventual rebound in prices, and then activity) ......I rekon its an opportunity for either recap, or private equity (which would require a complicit Board, or ownership of debt !)

rgds
V_H