Thursday 29 January 2015

The Fall Of Management Resource Solutions



Management Resource Solutions pitched up on aim only a matter of weeks ago, with all the gear and no idea the companies shares started to drift from the outset. Sadly I bought the (30p) IPO promote as the company gave a good account of itself, with a few whispers from decent city guys and the scene was set.

Whilst I accepted the short period of time on the aim exchange for the fledglings wasn't being kind to them i also took the statement made to me by the CEO as credible on 5th Jan 2015:

''We will be discussing an announcement for later this month.


This coupled to the announcements via official and unofficial lines (media reports) where the company (MRS) informed '' We look forward to updating the market in January '' based on these statements and my own findings I took the company on face value so to learn on the 29th of January that the company intended on making no official release other than interim's, coming before the end of March 2015... - 

The smarmy pup at the PR company (FTi) really tried to run the rule over me with his clever comments ''  what would you like them to do '' by way of sarcastic suggestion of no material changes, no update '' - and there had been no material changes in his eyes...

My response to this in no uncertain terms was unrepeatable but followed the line of '' Listen you cheeky little prick, is it too much for shareholders to expect, the company do what it says and that performance has been disappointing to boot ''

The CEO miraculously corroborated with a statement in which a reply came via email 10 minutes after i put the phone down to (FTi's) PR twit . The CEO claimed i was now asking in an aggressive manner, which is funny as nearly all execs that I have pulled up on such shenanigans unanimously question the way in which i ask a question.

After the shocking broker valuation of 38p i felt compelled to investigate further! - It is rumored that MRS were a little shy on completing a number of financial transactions. Did this result in both the companies turnover being affected as well as having a material effect within the broker analysts valuation? Was this related to payment received from Papua New Guinea?

(Note: Rumors are not facts until we can prove them)

MRS CEO was proud to talk about the company's year on year performance (doubling turnover year on year for seven years) which i have to say was part of the appeal to me here from an established company, however I now ask has today's '' Rushed out RNS flagged yet another red flag ''

All along the company intended on doubling turnover accept today the company said:

 it is anticipated that the financial results for the year ended June 2015 will be materially ahead of full year 2014.

Which is not the magic double claim now is it? The RNS smacked of desperation as this release was only constructed to counter a drop which was created by the failure to meet the expectation of the markets which they have created.

After reviewing the Admission document it also shows a key (significant) shareholder's ends in March, this would then potentially open the floodgates once again.

Daniela Athan, who will be directly or indirectly interested in approximately 16.6 per cent. of the Enlarged Share Capital on Admission, has undertaken to the Company and (for so long as it is the Company’s Nominated Adviser) Northland that (i) for three months from Admission she will not dispose of any interest in the Ordinary Shares in which she is interested on Admission

This presents yet more uncertainty and whilst I accept that the company if able to meet all of the expectations and milestones originally set out would have done well, the clear change of sentiment and momentum will now fuel a lacking of confidence.

The markets expect profits to be ahead - so must now exceed that
The markets expects turnover to double - the markets must exceed this
The shareholders expectations and company performance are fragmented

It does not take a rocket scientist to work out where this is going! On that basis I hope I have done the honorable thing in sharing my own bitterly disappointing analysis.

IPO 30p
Today 15p

Todays audio on what's changed with Management Resource Solutions here

The next few weeks could see further loss, buyer beware...


Bests


Doc

* Note: 12th January the chairman's other aim company went into liquidation - Again why no Rns when it happened?








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