cash shell

Bit of background worth reading...

The AIM & OFEX Newsletter September 2005

Net assets £26,624m
Net Assets per share 8p
Intangible assets £32,676m
Net current assets -£1,810m
Debtors £4,513m

Mavinwood
Sector: Support Services
Symbol: MVW Share price: 9.12p (31 August 2005)

MAVINWOOD ghosted onto the market in April, a little shell indistinguishable from the other colts, claiming to be seeking to act as a magnet for what it
called ‘support companies’. But in the same month the issue of 36m shares at 11p told of a serious endeavour by serious people in the making. That £4m was the cornerstone of the resources needed to acquire ReStore, a document
storage company.

ReStore was ten years old. For those unfamiliar with the nature of modern operations of such companies, what you get now is not only archive box storage with rapid retrieval, but computer media and film storage, secure door-to-door deliveries (same day if you like) on-line access, off-site storage for computer tapes and magnetic media as part of back-up/disaster recovery procedures, and record retention programmes to conform with legal or regulatory compliance requirements.

ReStore cost £6m in cash, with what could be up to £5m more to come, the latter dependent on its financial performance in the year to March 2006. It might look to have the upgraded functionality of a cloakroom attendant, but the regulatory environment, coupled with high rents is forcing a torrent of documents downstream to suitably remote locations. It is an expanding sector, growing indeed by more than 10% per annum.

So that was that. Then, on the first day of June, £20m more was raised, at just 8p this time to acquire Ansa, a business which validates drainage-related insurance claims – and either carries out or organises repairs, as appropriate.

The background is a familiar one – that of the insurance companies under constant pressure to reduce the cost of claims, and, equally important, to deal with them in a manner which will increase their standing in the market, not
only with customers (God bless ‘em) but with the brokers who place the business with them, and actually have to deal with the irate insured if, as is all too often the case, big-company lethargy (at best) compounds the ill effects
of the original incident.

Share Price (Last 12 months)
High: 12p
Low: 8.25p
Number of Shares in Issue: 333m

Normal Market Size: 10,000
ISIN No. GB00 B03JF317
Market Makers: 3
Stockbrokers: Seymour Pierce
Next Results: December 2005

Major Shareholders
Lord Ashcroft 61%
Cazenove 7.7%
Canada Life 6.8%
Steven Watkins 3.8%
RC Brown 2.4%
JO Hambro 2.3%