MTQ Corporation

[wsreader]

Shareholders who previously opted to take cash dividend rather than scrip share of $0.83 now have a chance to increase your share holding at a better price and without having to deal with odd lots. There is a sell offer today at $0.805.
(I am not vested in this sell offer)

[Musicwhiz]

Shareholders who previously opted to take cash dividend rather than scrip share of $0.83 now have a chance to increase your share holding at a better price and without having to deal with odd lots. There is a sell offer today at $0.805.
(I am not vested in this sell offer)

I think I will just wait for the final price of the scrip shares to be announced once CD is confirmed after the AGM. It will most likely be lower than 80.5 cents as I am hoping the Company gives a 10% discount to VWAP of shares done in the last 30 days......

[Musicwhiz]

NMS has announcefd that Blossomvale purchased another 25 million shares from June 22 to 27, 2011, and this increases their stake to 15.31% (268,455,000 shares) in NMS.

MTQ's average cost in NMS has been further reduced from A$0.0476 to A$0.0467.

[Musicwhiz]

Latest news and major transaction for MTQ. They have acquired Premier Land & Sea for US$19.3 million.

Details as follows:-

1) T&C and Structure of Deal
http://info.sgx.com/webcoranncatth.nsf/V...50016B7E2/$file/Major_Transaction-Acquisition_of_All_The_Issued_Share_Capital_of_The_Premier-Group.pdf?openelement

2) Press Release on the Acquisition
http://info.sgx.com/webcoranncatth.nsf/V...50016B7E2/$file/MTQ-Premier-Press_Release_6_Jul_2011.pdf?openelement

Will be posting more on this soon as I digest the information.

[edragon]

Part of the Chairman's message:

Our two business divisions managed
to grow both revenue and profits for
the year. Group revenue increased by
11.9% from S$81.97 million to S$91.71
million.
In spite of better performance in both
operating divisions, the Group’s profit
after tax decreased by 10.7% from
S$12.03 million in FY2010 to S$10.74
million in FY2011 mainly due to the
inclusion of an S$1.86 million one-off
gain on disposal of financial assets in
FY2010 and a S$1.23 million adverse
movement in the fair value of financial
instruments between FY2010 and
FY2011. Excluding this, the FY2011
Group’s profit after tax would have been
18.5% higher than that of FY2010.

Await your comments.

[Musicwhiz]

Part of the Chairman's message:

Our two business divisions managed
to grow both revenue and profits for
the year. Group revenue increased by
11.9% from S$81.97 million to S$91.71
million.
In spite of better performance in both
operating divisions, the Group’s profit
after tax decreased by 10.7% from
S$12.03 million in FY2010 to S$10.74
million in FY2011 mainly due to the
inclusion of an S$1.86 million one-off
gain on disposal of financial assets in
FY2010 and a S$1.23 million adverse
movement in the fair value of financial
instruments between FY2010 and
FY2011. Excluding this, the FY2011
Group’s profit after tax would have been
18.5% higher than that of FY2010.

Await your comments.

My comments were already made during my analysis of MTQ's FY 2011 financial results, which can be found on my blog.

Thanks!

[Nick]

Premier Sea and Land - http://www.premier-ips.com.sg/index.html

Pemac - http://www.pemac-ips.com/

Their official website looks well updated with a list of their facilities, clients, certificates and services. MTQ is turning to short term loans to fund a significant portion of the investment. Judging by the high ROA of 4.1/19.3 = 21.2%, it makes sense to turn to cheap loans to seize this opportunity. The accretion in EPS of 5.5 SG cents (based on pro forma statement) will be nice. On the other hand, the higher gearing and cash being locked up in NMS may not necessarily mean an increase in dividend payout in the near future ? I like that MTQ is turning to a blended mix of organic and inorganic expansion to chart future growth for shareholders. Let's see how this will impact the 1H 12 results due in November.

(Vested)

[Musicwhiz]

Thanks Nick for the information. Not really an issue for me if MTQ lets the dividend stay the same but instead offers scrip - it allows me to collect more shares of this company without brokerage charges!

As it is, with today's announcement it is getting harder to make a purchase as Mr. Market has re-rated MTQ.

[dydx]

MTQ's acquisition of complementary businesses held by Premier Sea & Land P/L and Pemac P/L seems opportunistic and well structured. Based on the available info, the acquisitions should be earnings accretive from completion. This again shows that the father-and-son Kuah team is more than just business managers; they also have a knack for buying and investing into new business.

The just released FY11 (ended 31Mar11) AR makes interesting reading....
http://info.sgx.com/listprosp.nsf/6c6be9...4003334d2/$FILE/MTQ_AR2011_Final.pdf

I now look forward to the coming $0.02/share Final dividend (with scrip option) for FY11, which will be payable on 16Sep11, with 'XD' date fixed for 28Jul11.

[Musicwhiz]

Business Times - 07 Jul 2011

MTQ acquires oilfield equipment group

Consideration for Premier Sea & Land is US$19.3m

By CARINE LEE

OIL equipment specialist MTQ Corporation has acquired Premier Sea & Land Limited, a company dealing in related products and services, for US$19.3 million.

Premier, a Hong Kong-incorporated investment holding company, has two Singapore-incorporated subsidiaries - Premier Sea & Land Pte Ltd (PSL) and Pemac Pte Ltd - and the group is in the business of providing oilfield equipment primarily used in drilling applications in South-east Asia.

The vendor is Canadian firm Integrated Production Services, whose parent company is New York-listed Complete Production Services Inc.

The consideration is subject to adjustments, depending on whether the audited consolidated net tangible assets of Premier as at June 30, 2011, turn out to be below or above US$14.4 million.

'It is a profitable business and it provides us an excellent opportunity to increase the scale and scope of our products and services,' said MTQ chief executive officer Kuah Boon Wee.

The cash purchase completed yesterday was funded by US$13.51 million in external bank borrowings and US$5.79 million in internal funds.

'MTQ's strategy has always been to find growth opportunities for the group and we feel that Premier Group is a highly complementary acquisition to its current oilfield services,' said Mr Kuah.

In addition to expanding the current rental equipment range offered by MTQ, this acquisition will also increase MTQ's production capacity. MTQ will also be able to capitalise on Premier's business relationships including exclusive agency and distribution agreements with leading original equipment manufacturers, MTQ said in a statement.

'Premier has good business relationships and we look to capitalise on that and achieve synergies in cross-selling the group's services to a wider customer base,' added Mr Kuah.

MTQ shares closed three cents higher at 85 cents yesterday.