what a complete joke

What a complete joke

I have finally had a chance to go through the Independent "expert" report and I have to say it?s a complete joke.

I see what you mean TD when you said that you can see many holes in it.

They have decided that the "Future Maintainable Earnings" methodology is the most appropriate, so what do they do.... they take the 2010 performance make a couple of adjustments, and classify this as FME!

They themselves say that "FME reflects a level of earnings expected to be achieved by Mesbon in the future on an ongoing basis" (page 32)

Mmm... an ONGOING BASIS.

Well they are part way through constructing the 4th and final phase of their explansion plans with the Phase 4 plant that will be operational in part from next year, which they themselves will produce finer quality and higher margin nylon yarn.

So these so called experts, when they think about the ongoing earnings, are completely ignoring ANY, NOT ONE SINGLE gram, of output from the Phase 4 plant.

What a complete JOKE

And as for the earnings multiple, they are basing their EBITDA multiple on "the observed trading multiples" Ie - the multiple that has been applied to the company which has made it so cheap to want to privatise!
Why wouldn't they use an average industrial company multiple, or the average multiple of the small ordinaries? I know the answer to that question.....

So..... here we are with the FME being the primary methodology, using revenue that is infact not ongoing because it fails to take into account the 40%+ increase in production as a result of the new plant (which you would think would on the surface would increase profitability by more than 40% due to many factors including importantly the fact that the output of the new plant being higher quality and higher margin nylon), and not to mention a multiple that does not reflect the reality of the market.

It is a complete joke and I will be voting NO and TD I hope you get your letter out and McNeil and whoever else votes NO.

This is a great business which is currently massively undervalued and not including the uplift from the Phase 4 plant which will be operational in 4 months time.