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MYG - Mayfield Group Holdings (1 Viewer)

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The company changed its monicker and code from Allied Technology (ATZ) to Longreach (LRG) on 16/2/07. Allied merged with Longreach via the issue of shares to Longreach shareholders on 22/11/06. Longreach then became a wholly-owned subsidiary of Allied. Allied then took the Longreach name. LRG is "principally involved in the design, integration, installation and maintenance of communications networks principally for the delivery of secure voice, data, video and web based communications services and solutions to Federal and State Government departments (including defence, DFAT and Homeland Security, USAF) and to prominent corporate clients across Australia".

The group also owns 25% of Startronics, one of Australia's largest contract electronics maufacturing facilities and Servicepoint who provide video conferencing. Executive options were granted on 6/12/06 with strike prices of 23-29c. Presumably the directors think the sp will arrive at a higher level than the strike price one day (current sp. 14c). The group has stated that it wishes to grow by acquistion.

The following figures were taken from the Chairmans' AGM address on 18/1/07. Presumably these accounts are pro-forma for the combined Longreach/Allied group, as the numbers bear little relation to the most recent final report for Allied for the YE June 2006, which was filed before the implementation of the merger (merger finalised on 22/11/06). Post-merger, there are 110m shares on issue. Sorry about all the dots, but this is the only way I could find to make everything line up.

.................2005......2006 (AUD m)
Revenues.....34.1.......31.5
NPAT..........(5.7)........0.3

From the quarterly financial report filed on 31/1/07 I have taken the following numbers:
................Dec Qtr....YTD (6 months) (AUD m)
Receipts........7.1........14.1
Payments......4.7........10.6
Op.Cashflow...2.5.........3.6

The group continues to win new contracts, most of them small, although I'm always a bit uncomfortable with companies which get all their revenue from one large contract- easy to account for, but a big problem if you lose the contract. For example:
3/10/06 Customer service contract from Australian govt. agency worth $300k/yr. The agency concerned approached LRG directly due to the sensitive nature of the work, and LRG has personnel who have already undergone security clearance (Warren Buffet's famed "competitive advantage").
14/12/06 Wins a navy (RAN) contract valued at $1.4m
13/12/06 Buys the technology business of ASX listed Redflex. Similar business to LGR - secure switches, air traffic control, secure communications networks etc.

From Oct 17th 2005 Sydney Morning Herald:

ASIO will double in size over the next five years as part of a strategy to equip the organisation for home-grown terrorism threats, the Prime Minister, John Howard, said yesterday. ASIO will recruit 900 spies over the next five years. It will also invest in new information technology systems to cope with the vast volume of intelligence now being developed and exchanged internationally.

The full article is here:
HERE
 
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Re: LRG - Longreach Group

Oh dear! Buried at the bottom of the 6 month accounts is the admission that one subsidiary has breached its banking covenants. Management are exploring ways to remedy the situation. The fact that they didn't 'fess up in the bullet points at the top of the report is not a good sign in my opinion. Also I would imagine that this would be market-sensitive information and therefore should have been announced when it occurred, in early Feb.
 
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Re: LRG - Longreach Group

exgeo said:
Oh dear! Buried at the bottom of the 6 month accounts is the admission that one subsidiary has breached its banking covenants. Management are exploring ways to remedy the situation. The fact that they didn't 'fess up in the bullet points at the top of the report is not a good sign in my opinion. Also I would imagine that this would be market-sensitive information and therefore should have been announced when it occurred, in early Feb.
Breaching of banking convenants?? Better to keep clear of this one.
DYOR
 
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Re: LRG - Longreach Group

1) Nightingale Partners who tried to take over Longreach (before the group restructure, when still listed as ATZ), up their holiding on-market, paying around 3.5-3.6c per share.

2) An administrator has been appointed to the LRG subsidiary which breached its banking covenants. The debts of the subsidiary are not payable by the LRG group, but the LRG group will occur a writedown of the subsidiary's value as a result of the administration. This will be non-cash, but affect the reported financial results for the LRG group.
 

prawn_86

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Re: LRG - Longreach Group

just had a quick look at these guys, and its interesting to note that their market cap is only a little above their cash at bank.

market cap - $4.3mill

cash at bank - $3.6mill



having said that however they seem to be terribely managed and have a lot of unhappy previous holders. Although the directors and nightingales seem happy to buy at these levels. Perhaps something is happenng behind the scenes?

possibly a very spec buy IMO as they should be valued higher even just based on future EPS as they already have a cashflow.

any other people out there care to comment?
 
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LRG.AX

Hi, I admit that I am new to stocks but have been monitoring both Aus and US stock markets closely for the past 3 months recently I came across LRG.AX on 26th April said they were releasing 30c per stock fully franked with a stock price of $0.59. I decided after researching it seemed like a good investment buy, get dividend, sell, profit. I would however like someone a little more experienced than me to tell me whether this was a dumb move or whether it was a pot of gold?

Thanks :)
 

Country Lad

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Re: LRG.AX

I would however like someone a little more experienced than me to tell me whether this was a dumb move or whether it was a pot of gold?

Lesson1. Always understand what it is you are buying. Unless you know exactly what it is you are buying, you could come to grief. There are for example numerous shareholders who bought contributing shares not knowing that they would be subject to a futher call.

Lesson 2. There is nothing like a pot of gold in the share market.

Lesson 3. If it looks too good to be true then it is.

Let's look at what you are buying. LRG is now a cash box. It has no business, no income. It has sold its operating business. It is looking around for something to acquire so it could end up as anything or nothing.

I know very little about the company and had a quick look when I saw the share price jump a few days ago and decided to pass. From the quick glance it appeared to me that after the sale of the business it will have cash of about 56 cents per share. Reduce that by the 30 cent div and it is worth around 26 cents per share as a cash box.

I expect that the price will drop by the 30 cent dividend or more when it goes ex div, to 26 cents or less and continue to slowly fall as a cash box.

Cheers
Country Lad
 

System

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On February 3rd, 2014, Longreach Group Limited (LRG) changed its name and ASX code to Stream Group Limited (SGO).
 

System

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On November 23rd, 2020, Stream Group Limited (SGO) changed its name and ASX code to Mayfield Group Holdings Limited (MYG).
 

Dona Ferentes

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On November 23rd, 2020, Stream Group Limited (SGO) changed its name and ASX code to Mayfield Group Holdings Limited (MYG).
I wonder if a sensible company will emerge.

Stream Group Limited, is to be renamed Mayfield Group Holdings Limited. Mayfield is raising $1.2m in capital to relist on the ASX and support their organic, acquisition-based growth strategy.

Mayfield Group own and operate an extensive fleet of earthmoving and heavy mining equipment, offering innovative, comprehensive tailored solutions for our Australian mining and civil construction industry clients.

 

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