Ann: Response to media speculation, page-40

"I reckon the board knew it too"

What's your basis for saying that?

What experience or qualifications do any of MND's directors have in the field of securities analysis or valuation theory?

I think that the role of share buybacks is totally misunderstood; buying back shares is, first and foremost, a means to return capital to shareholders.

Too often, people (including company executives) seem to think that the objective of share buyback is to "create value" by buying shares in companies at a level lower than their fundamental value.

Trouble is, when directors try to do that their roles extend to acting as investment managers, for which almost none of them have the required qualifications nor experience.

Heck, most eminently qualified fund managers fail to get it right, so what chance does Company Director John/Jane Smith have?

He/she might have intimate knowledge of the operational and industry aspects of the company he/she runs, but there's a world of difference in knowing about a business/industry, and knowing how to discern the true value of equity.

Company executives are best left to do what they are paid to do, namely to manage their businesses.

The share price will take care of itself.


"There's a real cost to shareholders of overleveraged companies but also those sitting around with large net cash positions."

What is the cost of sitting on cash in an industry where capital availability is a competitive advantage?

As for have too much cash "encourages them to do something stupid", I don't think "stupid" is an adjective that can be applied even remotely to the people who run MND.
Quite the opposite, more like it.

Besides, given the tough, sometimes brutal, industry such as the one in which MND operates, one should not countenance investing in any business in this sector whose managers might be stupid, in the first place.

Stupid managers don't last very long in the engineering construction industry, I have noticed over the years.


"I would suggest judging any potential acquisition on its merits with a healthy skepticism to challenge the boards opinions."

Yes, and healthy skepticism starts with the view that there is no need to acquire other businesses when those sorts of businesses can be replicated from first principles, without the need to pay any lucky would-be vendor a premium.

Judging from the way that MND has grown in new market segments in the past, suggests that the board views it that way, too.

They've never bought a thing in 20 years, because they say they back themselves.
Why would they change any of that philosophy now?


"Notwithstanding the fact that yeah this is a well managed company no need to roll the board yet."

The mere hint of a notion of rolling the MND board is a truly hilarious one.