Tuesday, 21 May 2013

Mountfield Group

Today I have had my attention drawn to Mountfield Group (MOGP) which at 1.18p is capitalised at £2.2 million. My basic appraisal is that the shares are cheap although the spread is pretty unfriendly.
The building services group is showing all the signs of a company that has turned itself around after losing wads of cash in 2011 the company announced in September its first half 2012 numbers. These showed that:
  • Group revenues increased by 63% to £8.6m
  • Mountfield revenues up 115% to £7.0m, margins maintained at 13.5%.
  • Connaught revenues fell by 18% to £1.6m, however margins improved from 18.0% to 20.6%
  • Pre-tax profits increased to £371,000 from £38,000
  • Cash generated by operations improved to £103,000 against a shortfall of £800,000 in the corresponding period of 2011
  • Maiden construction contract for renewable energy project secured
  • Strong start to second half with £3.9m contract wins since period end

In April and May of this year there was further news on contract wins, notably a £3 million contract to supply and fit the flooring for the first stage of a major European data centre with the CEO stating:
We are encouraged by the flow of new work we are experiencing, and new contract tenders have increased markedly during the last three months. I am particularly encouraged by Mountfield’s performance in winning follow-on work on multi-stage projects as well as new projects.”
The caveat here is that the company has some chunky borrowings but it appears to be trading its way towards improving that situation.

A speculative buy I’d say.

- See more at: http://www.shareprophets.com/analysis/420/buy-mountfield-group-at-118p#sthash.ApjGaeeg.dpuf

Regards Doc



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(These are but opinions derived from my own experiences and thoughts and do not adopted as statement of fact)

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