wknecht Posted February 3, 2014 Share Posted February 3, 2014 Moury is a construction company in Belgium. It participates in the markets for residential, non-residential, industrial, as well as in the renovation segments of the industry. It is 60% owned by the CEO George Moury. Some of the numbers: Market cap EUR 39.7m EUR 35.1m in cash and investments 2.3x EV/EBITDA TTM 5y average net income of EUR 3.5m 5y average CFO of EUR 3.6m Capex and amortization have roughly been the same on average Looks cheap to me. I continue to do research, so haven't started a position just yet. Would be interested in the boards thoughts. Link to comment Share on other sites More sharing options...
bizaro86 Posted February 3, 2014 Share Posted February 3, 2014 Sounds very cheap. Any source of English financials? Link to comment Share on other sites More sharing options...
wknecht Posted February 3, 2014 Author Share Posted February 3, 2014 Unfortunately no. I don't speak French, so I relied on Google translate. Link to comment Share on other sites More sharing options...
yadayada Posted February 3, 2014 Share Posted February 3, 2014 Doesn't the CEO treat this cash balance as his personal account since he owns so much shares? If he pays a dividend then he needs to pay loads of taxes. So how do you know we get to see the cash anytime soon? Link to comment Share on other sites More sharing options...
skanjete Posted February 3, 2014 Share Posted February 3, 2014 I've been following Moury for some years now, not as a shareholder, but as a side-line observer. The construction business in Belgium is not exactly booming. But the share indeed looks cheap. I'm afraid however that this is one of those eternally cheap looking companies. The trick is to get the value out, and I don't really see any catalysator to make that happen. The same applies for something like Camellia on the London exchange. Very, very cheap on an asset base, but how will the value ever get out? Both companies are controlled by a majority shareholder who hasn't got any interest in monitizing the value. The value is there, but when will it be available for minority shareholders as well? Link to comment Share on other sites More sharing options...
wknecht Posted February 4, 2014 Author Share Posted February 4, 2014 Doesn't the CEO treat this cash balance as his personal account since he owns so much shares? If he pays a dividend then he needs to pay loads of taxes. So how do you know we get to see the cash anytime soon? From what I have read, this does not appear to be the case. He pays himself a reasonable salary of around EUR 134k, there are no options, and there does not seem to be egregious retirement benefits (and all is defined contribution). Still trying to understand related party transactions in particular because the org structure looks complicated, but I haven't seen a lot self-dealing through this route yet. They currently pay a modest dividend annually (last 10 years have totaled EUR 37 before taxes). But you're right, you don't know if minority investors will get the cash, and what they do with the cash hoard is TBD. Link to comment Share on other sites More sharing options...
wknecht Posted February 4, 2014 Author Share Posted February 4, 2014 I've been following Moury for some years now, not as a shareholder, but as a side-line observer. The construction business in Belgium is not exactly booming. But the share indeed looks cheap. I'm afraid however that this is one of those eternally cheap looking companies. The trick is to get the value out, and I don't really see any catalysator to make that happen. The same applies for something like Camellia on the London exchange. Very, very cheap on an asset base, but how will the value ever get out? Both companies are controlled by a majority shareholder who hasn't got any interest in monitizing the value. The value is there, but when will it be available for minority shareholders as well? Have you observed management over reaching, or more generally, a hostile/extremely indifferent attitude towards minority shareholders? Link to comment Share on other sites More sharing options...
skanjete Posted February 4, 2014 Share Posted February 4, 2014 Extremely indifferent would be a good description. It's an attitude I think is quite widespread in small European companies. And it took me quite some time (and opportunity-cost) to fully grasp it. A lot of these companies seem to be perpetually cheap. I think the Anglo-Saxon sense of proprietorship is not as evident in Roman-European culture (France, Spain, Greece, Italy, south-Belgium,...) as it is in the USA or the UK. I would be very surprised to see an activist-shareholder stand up against Moury's management for example, as long as there is no blatant fraud. Besides, it's not only considered uncivilised to start a public fight over some money, but what could an activist do? The family owns 60% of the shares. So I consider this a publicly listed private company. I suppose management does too and is of the opinion that minority shareholders should be pleased by the dividend and keep quiet. PS. it's not a phenomenon that is confined to Roman-European culture, for that matter. I already talked about British Camellia, but there are lots of them on the London Stock Exchange where a majority shareholder is indifferent towards the minority shareholder. Think of BCB Holding of Lord Ashcroft or MSI International. All perpetually über-cheap... Link to comment Share on other sites More sharing options...
skanjete Posted February 4, 2014 Share Posted February 4, 2014 Doesn't the CEO treat this cash balance as his personal account since he owns so much shares? If he pays a dividend then he needs to pay loads of taxes. So how do you know we get to see the cash anytime soon? From what I have read, this does not appear to be the case. He pays himself a reasonable salary of around EUR 134k, there are no options, and there does not seem to be egregious retirement benefits (and all is defined contribution). Still trying to understand related party transactions in particular because the org structure looks complicated, but I haven't seen a lot self-dealing through this route yet. They currently pay a modest dividend annually (last 10 years have totaled EUR 37 before taxes). But you're right, you don't know if minority investors will get the cash, and what they do with the cash hoard is TBD. From what I remember, I think they need at least part of the cash to (pre-)fund projects they co-invest in. So the cash is not to be considered completely free. I think it's about the same situation as with Duro Felguera (also very cheap at the moment), a Spanish contractor with a lot of net-cash on the balance sheet. But here too, at least part of the cash is needed for the business model. Link to comment Share on other sites More sharing options...
skanjete Posted March 26, 2014 Share Posted March 26, 2014 Moury came with results yesterday. They had a good 2013, in spite of a harsh winter in 2013. Marketcap : 40m€ cash : 38,6m€ E.V. : 1,4m€ net profit : 1,8m€ Gross dividend : 1,6m€ E.V./EBITDA < 0,5 !!! Is this cheap or what? If someone ever could persuade mr. Moury to return a chunk of capital to the shareholders (what about, say, the marketcap??), this could be a very interesting situation... Link to comment Share on other sites More sharing options...
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