What did you miss..??No comment on Honey Insurance investmentNo...

What did you miss..??

• No comment on Honey Insurance investment
• No comment on Oxygen Home Loans
• The sale of Company Owned stores to incumbent agents at a value which on face value seems to exclude a sales book multiple. Could well be true as the Agents see themselves generating the sales goodwill therefore why would they pay for that..? Good for them but not so good for the existing shareholder. The flaw in the model being that the leverage going forward is with the Franchisee as they have the Franchisor over a barrel ( I pay less franchise fees or I walk around the corner to Ray White or some other competitor) if they are successful. Ultimately McGrath will be forced to buy back partially or in whole, otherwise they face losing significant market share and this has been proven by their forced partial acquisition of the Central Coast franchise operation. Seems like a sell low buy high scenario.
• The end game of the above I suspect will be a progression towards cash balance accretion with a view to payment of a special dividend at some point in time to compensate shareholders. If that floats your boat then hang around. May take a long time.
• The fact that the CEO talks his own book (not unexpected), whilst proven market commentators would suggest otherwise.
• The fact that over 70% of the Executive have left voluntarily and this is represented as a deliberate cost reduction program..? Points to stability.
• The CEO strikes me as a man of the Agents on the outside but less so of those corporate employees on the inside. Both are important if MEA remains a listed entity.
• My understanding is that he may well write his own emails..referring to his recent Australian article... but also those of others. Hardly inspiring.
• The reasons why the last three CEOs left..? Amazes me that no-one asks.
• I wouldn't on face value take Agent growth as a positive. Quality is as important as quantity and the former do not come across cheaply.
• The run rate of store growth over the last year does not extrapolate to predicated market presence. In fact it never has over the last few years..so what has changed that we should believe the predictions...? Answer: absolutely nothing.
• In my humble opinion MEA should not be a listed entity as from afar it seems that operationally it is governed like a private.
• Buy Back does nothing to increase the liquidity of stock issue which is one of the pre-requisites to Insto interest along with Market cap ($100mln min).

The plus is that the current share price is representative of the market value of the property management book and that I suspect is the only credible reference point as to value.