Morse – Walking the walk

(By Anthony Miller). It’s one thing to talk the talk – quite another to walk the walk. Morse executive chairman Kevin Loosemore and recently promoted CEO, Mike Phillips have clearly put their money where their mouth is, buying tranches of Morse shares last Friday. Loosemore upped his 1.75m shareholding by another million shares, while Phillips bought 550K shares. Non-exec director Paul Shelton bought nearly 50K shares. The price on all transactions was close to 7.5p.

I had a long chat with Mike Phillips after Morse announced its interim results (see Morse – And then there were four) and I really feel they have got the strategy dead right. Each of the remaining businesses is getting a lot of management ‘TLC’ to knock them back into shape, and I got no sense at all of a ‘fire sale’ mentality to get rid of them at any price.

Back in September, Loosemore and Phillips (then just appointed as CFO) reiterated their ‘medium term’ 7.2% group margin target after recording a 4.4% margin pre-nasty bits. I must admit to being sceptical at the time (see Morse still aims for 7.2% margin). But even if 7.2% is, shall we say, an aspirational target, especially given that the company reported an operating loss at half-time, you have to wonder what the number could be if they could focus and run each business properly. Thankfully I no longer have to ‘run the DCF’ to come up with a share price target – but clearly the Morse top team firmly believe the answer is somewhat higher than 7.5p!!