MXI - MaxiPARTS Limited

[peter2]

MXI: Price has indeed continued to go higher since the last post. It's now at yearly highs and looking likely to continue higher. The weekly chart shows a reversal base pattern. It looks like a salad bowl, so I can call it a salad bowl pattern.

The daily volume is quite thin and I was hoping to get it at a slightly lower price but then remembered that I can be a "dick for a tick" so I paid up (crossed the spread to 0.29) to start a spec position. Right now, I'm pleased I paid up. It's only a spec possie as the MD is so thin. The initial target is the old range at 0.50.

 

[galumay]

I will have to go and have a deeper look, I held at one time but it was a slow disaster of a business, always managing to disappoint with a new factor that caused the business to be a loss making struggle! Maybe they finally fell on some good times?

 

[debtfree]

6 months later ..... finally broken above the 0.36 level 2 weeks ago with good volume, looks like it might make that 0.50 target sooner than later. Time will tell.

 

[peter2]

I've been looking at this one as well. The problem is the low daily traded volume. Any medium to large seller can knock the price down through many price levels. Business is suited to the current pandemic conditions.

 

[Dona Ferentes]

... Business is suited to the current pandemic conditions.

That appear to be the case. Nudging 50c and a high for the last 12 months. Getting back to where it was early 2019, when poor results knocked it down.

If bulk goods and centralised warehousing grows (and people keep eating), the infrastructure roll out keeps up, mining continues and the national highways extend, then demand for should be there for a while for trailers and parts.

 

[Dona Ferentes]

That appear to be the case. Nudging 50c and a high for the last 12 months. Getting back to where it was early 2019, when poor results knocked it down.

and a divesting of some assets has seen the SP up some 35% to 62c. Clean up balance sheet, refocus on high margin biz.

Sale of Trailer Solutions Business and Properties for $48m
Highlights
• MXI to divest Trailer Solutions business and Ballarat, Derrimut and Hallam properties for total sale price of $48.3m, subject to customary adjustments.
• MXI to focus on its commercial parts distribution business and change of name to MaxiPARTS Limited.
• Special dividend expected to be 12.5 cents per share to be paid from sale proceeds.
• Share consolidation of 1 share for every 5.
• Following sale and payment of expected special dividend, MXI will have positive net cash.
• Sale expected to close at the end of August 2021, following shareholder approval.

 

[aus_trader]

and a divesting of some assets has seen the SP up some 35% to 62c. Clean up balance sheet, refocus on high margin biz.

Sale of Trailer Solutions Business and Properties for $48m
Highlights
• MXI to divest Trailer Solutions business and Ballarat, Derrimut and Hallam properties for total sale price of $48.3m, subject to customary adjustments.
• MXI to focus on its commercial parts distribution business and change of name to MaxiPARTS Limited.
• Special dividend expected to be 12.5 cents per share to be paid from sale proceeds.
• Share consolidation of 1 share for every 5.
• Following sale and payment of expected special dividend, MXI will have positive net cash.
• Sale expected to close at the end of August 2021, following shareholder approval.

Nice price jump, almost looks like if a takeover bid came in on the chart. Obviously it's the 12.5c special Div that bolted the price off the gates this morning ?

 

[peter2]

Selling now and taking the profit before all the corporate shenanigans.

edit: I should mention that I trade price trends not invest in companies. I have no thoughts on the future outlook of the "new" Maxiparts.

 

[divs4ever]

and a divesting of some assets has seen the SP up some 35% to 62c. Clean up balance sheet, refocus on high margin biz.

Sale of Trailer Solutions Business and Properties for $48m
Highlights
• MXI to divest Trailer Solutions business and Ballarat, Derrimut and Hallam properties for total sale price of $48.3m, subject to customary adjustments.
• MXI to focus on its commercial parts distribution business and change of name to MaxiPARTS Limited.
• Special dividend expected to be 12.5 cents per share to be paid from sale proceeds.
• Share consolidation of 1 share for every 5.
• Following sale and payment of expected special dividend, MXI will have positive net cash.
• Sale expected to close at the end of August 2021, following shareholder approval.

hmmm ,

i hold LAU , KSC and SNL , and can't quite explain why i ignored MXI , but surely i am not clairvoyant , this would have had me extremely disappointed had i been a holder

change of names , ( partial change of business model ) and a consolidation , i think i would have been rushing for the exit ( unless the special div. was franked , if so i would have done the math over the weekend first )

good luck holders

 

[aus_trader]

Selling now and taking the profit before all the corporate shenanigans.

edit: I should mention that I trade price trends not invest in companies. I have no thoughts on the future outlook of the "new" Maxiparts.

This is when the market hands you a nice reward. I think shareholders should be very happy either way:

- To exit now and lock in the 30%+ premium offered to their shares
OR
- To hold on for a bit longer and receive the 12.5c dividend and then consider to be a shareholder of the new business or to sell out

I had a quick look and management Unanimously recommends shareholders to support the selling of the Trailer business.

Well done

 

[divs4ever]

but when i consider buying into a share ( nearly always ) what will this company be like when i am old(er ) and frail and someone else has to place the orders for me .

now time will tell whether management took the correct surgical proceedure , experience in other companies has taught me that i should alarmed and alert and very busy crunching numbers , with such changes ( see my thoughts on share consolidations elsewhere on the site )

now i am aware the other members have different strategies and styles and i am fine with that , but if many businesses start with the shenigans , soon the only investors will be predatory lenders , and novice investors ( in the majority of the ASX ) not a pleasant scenario for a solid business starting out

 

[galumay]

Looks like a very good outcome for shareholders, I used to be one, but the perpetual under performance of the business wore me down in the end, there were always plausible excuses, but in the end I realised its just wasn't a very good business. (got better at financial analysis!).

At least those current shareholders have the choice to either get out at a healthy return, or hang in there, and see whether cutting out the dead wood leaves a viable business behind.

 

[divs4ever]

Looks like a very good outcome for shareholders, I used to be one, but the perpetual under performance of the business wore me down in the end, there were always plausible excuses, but in the end I realised its just wasn't a very good business. (got better at financial analysis!).

At least those current shareholders have the choice to either get out at a healthy return, or hang in there, and see whether cutting out the dead wood leaves a viable business behind.

i had noticed many years back Australia is terribly short of quality middle-management ( not particularly awash with quality upper management either )

i would love to embarrass MXI ( and PAN and WSA and .. ) but the problem is much bigger than that

it is VERY hard to find a company with a great management team that can keep the team together ( revolving boardroom doors is another red flag to me )

dumbass shareholders that demand board refreshes and divesity included ( that would be you , fund managers )

 

[aus_trader]

I haven't followed the company over the years but looking at it now, it doesn't look too bad.

It's making a profit each year, the valuation is modest.

Only small concern would be a little debt on the books but interest rates are so low in the current environment there is no problem servicing it.

Perhaps the sum of the parts of the business had more value to it than what the market was valuing the whole thing at. Maybe management sold the trailer business to realise some of that hidden value and reward the shareholders as well.

 

[divs4ever]

remember debt isn't a bad thing ( although personally i avoid it where possible ) provided you have a way to reliably pay it down , and that 'reliably ' is the gotchya in a disrupted economy , for instance power costs or taxes could rocket in the near term , shrinking margins

 

[System]

On September 17th, 2021, MaxiTRANS Industries Limited changed its name to MaxiPARTS Limited.

 

[Dona Ferentes]

Perhaps the sum of the parts of the business had more value to it than what the market was valuing the whole thing at. Maybe management sold the trailer business to realise some of that hidden value and reward the shareholders as well.

becoming a more specialised or focused business. Better margins?

New CEO Peter Loimaranta, new Head office.

MaxiPARTS Limited (ASX:MXI) is one of the largest suppliers of truck and trailer parts to the road transport industry in Australia.

 

[peter2]

Can happen to anyone at any time. Personally I don't think the banks do a good enough job of protecting their clients when changes of bank accounts and phone numbers are requested.

 

[KevinBB]

Living in the Roman Empire? Suffering from double vision?

Before you see the local optometrist, consider contacting asking stockbroker to buy and hold MXI for all of MMXXII.

KH

 

[Dona Ferentes]

a bit of a look under the hood from a shareholder >20 per cent

In Q4 MXI announced that they had acquired 80% of Förch Australia for the consideration of $9.7 million on a cash free/debt free basis. While the estimated EBITDA of $2.5 million from the Förch acquisition may not be a transformative deal on its own, it is worth noting that over 80% of the current EBITDA is generated in a single state, Western Australia. As such, we believe there is the potential for significant EBITDA growth as the business expands into other states like New South Wales and Victoria.

We believe there is only a single meaningful competitor to Förch, a German-based business named Wurth. Like Förch, Wurth is a family-owned business that manufactures consumable items mainly for the automotive industry, but also for the construction industry and other adjacent markets. The revenue of the business in FY22 was ~$175 million with an average gross margin of ~68% before distribution expenses. Wurth is not an identical comparable to Förch but in our view this does highlight the revenue potential that MXI has in front of it with this acquisition, along with the potential opportunity to expand their offering to higher gross margin products compared to the current core offering of truck parts.

Looking forward to FY24 we believe that MXI is well-positioned for significant earnings growth for the following reasons:
• Resilient Market: The market MXI operates in remains resilient as evidenced by the recent profit upgrade and positive outlook statement from Supply Network Ltd (ASX: SNL). SNL expects “growth will remain above the long-term trend for at least the next year”, indicating favourable conditions for MXI.
• Synergies from Truckzone acquisition: The majority of the synergies from the Truckzone acquisition are expected to be realised in FY24, and this does not include any potential uplift from increased market penetration due the expanded range of higher gross margin Japanese aftermarket parts.
• Full-year contribution from Förch: MXI will benefit from a full-year contribution from the Förch business. While not material in its own right, we believe there are several easy wins that can be capitalised on in the short term to increase profitability; one such opportunity being the roll out of Forch products across the majority of MXI’s 27 sites.

... market cap $125 million.
.
And seems to be on the upkick over the last six-twelve months