MYG - Mayfield Group Holdings

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.

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The full article is here:
HERE

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.

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.

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Breaching of banking convenants?? Better to keep clear of this one.
DYOR

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.

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?

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

Re: LRG.AX

Noobtrader101 said:

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?

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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

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

Relisted today..

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

System said:

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

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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.

Mayfield Group

www.mayfieldgroup.net

seem to have got house in order...
SP doubled last year

.
still only a $60million company

took it's own sweet freaking time

i held it when it was SGO ( Stream Group )

Chart - volume bars + decisive looking break above past highs.
Potted earnings history. Avg ROE last two years = 17%. Price/Book = 2.8. P/E = 18. Yield = 3% ff. Not cheap unless confident of growth.
Business description: usual mumbo-jumbo for a tech business - electrics and telecoms.

Not Held
Not Buying

WEEKLY

Hasn't been covered for a while...

Mayfield Group provides electrical and telecommunications products and services, mainly for utilities, infrastructure, data centres, and green energy projects.

• Market capitalisation – $94 million
• H1 FY2025 net profit (NPAT) – $5.1 million

In early Jan, announced sizeable contracts
- in the Central West Orana Renewable Energy Zone: ACEREZ, a consortium of Acciona, Cobra and Endeavour Energy has awarded Mayfield the contract for the supply and installation of 26 Prefabricated Protection Buildings for the CWO REZ. The contract value is approximately $20 million.
The CWO REZ will be a modern-day power source that supplies safe, reliable, and affordable grid-scale energy over the operations phase and beyond. The CWO REZ will connect new renewable generation and storage facilities to the National Electricity Market. Design will commence in January 2025, with construction commencing from Q4 2025 through to Q2 2027.
- Other sectors; A total of approximately $15 million in other new contracts has recently been added. These include the supply of switchboards to NextDC for the M2 Data Centre, the expansion to the port and mining operations for mining companies and a Telecommunication Relocation contract for the Lotus Creek Wind Farm for CS Energy.

Late March , more work brings work-in-hand to $108 million, extending into the 2027 financial year.
- contract for an amount of $20 million to deliver 18 modular power distribution centres in Victoria for a major Data Centre operator (operator). The 18 units will be delivered in the 2026 year. Revenue from the contract will be recognised over each of the years ended 30 June 2025 and 2026.There are no conditions precedent in the contract.
- Other sectors:
A total of approximately $3.2 million in new contracts with a number of customers has been recently added, consisting of $2.2 million for switchboards and switchrooms, plus $1 million for telecommunications projects in the mining, renewable energy, and government sectors. These projects will be delivered through the 2026 financial year.

A recent dividend of 1c ff came with a one-off special dividend of 5.3c f.f. due to a substantial cash surplus exceeding operational requirements. In their words, "the decision reflects Mayfield’s exceptional financial performance and its confidence in its ongoing growth."



Organic growth appears to be managed without demand for extra capital; growth in share count (last 3 FYs) has been limited to 2.3% p.a.

A commentator noted Mayfield Group holds significant deferred tax assets on its balance sheet. " As such, its tax is currently a non-cash expense and this could be a source of hidden value given the board’s track record of paying out dividends when possible."

With a P/E close to 18 and the group dependent on lumpy short to medium term contracts, the ability to win new profitable work will drive the share price. Certainly, the sectors they operate in are seen to continue to grow.

Mayfield is confident in its prospects and remains committed to its Australian manufacturing and technology-driven strategies.

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This is an interesting statement; given the long term nature of their customers' activities and need for reliable equipment, it would appear to be a moat of sorts.

$1.12, up 8c

Mayfield Group Holdings has executed a conditional Share Purchase Agreement to acquire 100% of BE Switchcraft Pty Ltd, a leading South Australian electrical switchboard manufacturer specialising in energy management systems, lighting control and room automation.

Transaction Highlights:
• $7 million initial consideration: $5 million cash and $2 million in Mayfield shares
• Expands manufacturing capability and commercial market reach
• Enhances product offering with lighting control and room automation
• Funded through existing cash reserves
• Completion expected by 30 August 2025, subject to conditions precedent

This acquisition strengthens all four pillars of Mayfield's strategic framework. It expands our Australian-made manufacturing capabilities with additional expertise and capacity, while enhancing our product offering with complementary lighting control and room automation solutions. The transaction increases our service capability in the commercial sector with specialised technical expertise. It adds innovative energy management systems to our solutions portfolio, positioning us to better serve customers across multiple sectors.

The combined entity will be uniquely positioned to address the growing demand for integrated electrical infrastructure in data centres and AI applications, where BE Switchcraft's energy management systems and Mayfield's critical power solutions provide a comprehensive offering unmatched by competitors in the Australian market.

About BE Switchcraft
Founded in 1966, BE Switchcraft has built a reputation for high-quality electrical switchboards deployed in significant infrastructure projects across Australia. The company operates from purpose-built premises in Royal Park, South Australia, with 70 full-time employees.

Beyond their core switchboard business, BE Switchcraft specialises in:
• Power Factor Correction
• Lighting Control and Room Automation
• Energy Management Systems
• Profile Cutting Services

BE Switchcraft is forecast to generate revenue of $20 million and EBIT of $1.8 million in FY25. The key employee and controlling shareholder will remain with the business on a long-term contract post-acquisition.

Benefits for Our Stakeholders
This acquisition delivers immediate earnings accretion for shareholders with positive EBIT contribution in FY26 and enhanced growth opportunities in the commercial sector. For customers, the combined expertise of both companies provides access to a broader range of Australian-made electrical infrastructure solutions and specialised capabilities in energy efficiency and building automation. Team members from both organisations will benefit from expanded career development opportunities across diverse sectors. At the same time, suppliers will see increased collaboration potential as Mayfield's expanded operations require additional materials and components.

Market Position Enhancement
The acquisition strengthens Mayfield's competitive position in Australia's electrical infrastructure market, creating the nation's most comprehensive provider of locally manufactured power solutions. While multinational competitors focus on standardised imported products, our enhanced Australian manufacturing capabilities enable us to offer customised solutions with faster turnaround times and local technical support.

Highlights
• Revenue: $118.1 million (↑37.9% from FY24: $85.7m)
• EBITDA: $11.5 million (↑73% from FY24: $6.65m)
• Profit Before Tax: $9.9 million (↑more than doubled from FY24)
• Net Profit After Tax: $6.8 million (↑32% from FY24: $5.1m)
• Strong Cash Position: $16.9 million, providing strategic flexibility
• Enhanced Shareholder Returns: Total dividends of 8.3 cents per share, including 5.3 cents special dividend
• Manufacturing Revenue Growth: 54% increase, driving overall performance
• Order Book: $104 million with $850 million near-term prospects
• Margin Enhancement: Achieved as project risk profiles matured and operational efficiencies delivered cost reductions
• Data Centre Expansion: AI infrastructure projects emerged as major revenue contributors
• LEAN Implementation: Enhanced production capabilities for larger, more complex projects
• Strategic Acquisition: BE Switchcraft ($7m), completing end August 2025
• Capacity Expansion: 20,000 sqm Perth development site secured for Western Australia growth
• Share Price Appreciation: From $0.67 to $1.05 over the reporting period



Outlook
Managing Director Andrew Rowe stated: "With our proven execution capabilities, a strong order book extending through 2026 and a clear strategic direction toward communications growth, Mayfield is exceptionally well-positioned to continue its growth trajectory. Our strategic evolution from manufacturing success to communications growth represents a compelling opportunity to create sustained value for all stakeholders while supporting Australia's critical infrastructure needs.
" The Company is well-positioned for continued growth with a strong order book extending through 2026, $850 million pipeline of near-term prospects, and a clear strategic direction toward communications growth opportunities."