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I've still got a little faith in the management (although severley dented) the placing was a killer but in all essence realistic considering. It's going to take some time getting back into double figures and as you say further acquisitions on the way.
Rocka999, thanks for the update, I hadn't seen it. I'm further encouraged by this RNS and it's clear that the new board are executing a focused strategy. Whoopee, another £2.8m in Pinn's bank, which reduces any prospect of a placing. Although I don't expect the cash pile to sit there for long. My guess us that further acquisitions are already underway. Time will tell. Good news, though. GLA
been saying this was overvalued for sometime. 1p seems more reasonable now. Who was that guy rmping this back end of last year? Was he working for someone? Sorry for people who got sucked in.
Short term pain for long term gain "The consideration for the Disposal is £2.8 million, payable wholly in cash. The proceeds of the Disposal will be used to further Pinnacle's stated strategy of consolidating a highly fragmented market of smaller IT services companies to become a provider of 'IT as a service' to the SME market in the UK" "Following the recent disposals of RMS Managed Security and its shareholding in Stripe 21 Limited, the Group now consists of the businesses of Ancar-B Technologies Limited and Weston Communications Limited acquired in February this year. Both are trading profitably in line with management expectations and generating cash" Gavin Lyons, Executive Chairman, commented: "The Disposal represents a significant step forwards in achieving our strategy of creating a strong 'IT as a Service' business with recurring revenues and higher margin services. When I was appointed in December 15, it was apparent that there were many legacy and operational issues that needed to be addressed within the Group. Through the disposals of Pinnacle CDT, RMS Managed Security and Stripe 21 we now have a stable financial and operational platform to build on. The focus is now entirely on the integration of Ancar-B and Weston Communications whilst utilising our cash and management resources to consolidate a highly fragmented market through acquisition so we maximise earnings and value for shareholders. I am pleased with the progress being made on both fronts".
is where this should be trading and even then that's being kind. I suggest this will fall another 3.5p from here to get to a level where it can then consolidate but then they will still need to place more funds for expansion as current funds are nowhere near enough to get a meaningful business developed here. At 3p there would then need to be a placing to execute the plan but who's buying in to this plan after directors fed themselves so much meat from the last one?.
3p coming because there is now way this can trade with a Mcap at £15.33m. There is nothing left to speak of here and it's basically a cash shell, albeit a very expensive one.
But what is the company worth right now? No where near it's current share price. They need cash and will certainly not be able to raise it anywhere near today's share price. That means there is a huge amount of dilution still to come and at a larger discount. Anyone investing now is nuts and throwing money in the gutter.
Crash2016, I hear you but I don't see it like you do. Facts are that they bought Ancar-B and Weston, which brings in an additional £3.7m revenue and an additional £0.8m EBITDA. And out goes RMS for £1, which was losing £149k EBITDA on £1.2m revenue but also had a carrying liability of £2.2m. That looks like a great short-term result to me. The net result, (after the acquisitions and the disposal), is that they are up on revenue around £2.5m and up on EBITDA around £1m and they have also disposed of a further £2.2m liability. What's not to like about that? I get what you're saying about the share price, it's painful for LTH, but if it was good at 30p, then it's a better deal at 7p, because if nothing else, the fundamentals are much stronger now, as is the board.
You were calling pinn a buy @ 30p so I hardly think you can claim to know what good news even looks like? They sold a huge part of the business for a £1. They stiffed share holders with a 4p placing They have basically nothing of a business left They need cash rapidly and in this market what can they raise? at what price? what is this company now worth? £5 mill Mcap would be generous,. It's going down.
Rocka999, I don't think you've quite got the gist of the RNS! "Pinnacle is today pleased to announce that it has entered into an agreement to sell the entire issued share capital of RMS to Intronovo Limited for £1." The key phrase here is "...to sell the entire issued share capital of RMS..." They've sold a loss-making asset for £1. That's really good news. If I'm understanding it right, they've got rid of a business that was losing £149k per year. The whole business, not just the assets. This means that Pinnacle is no longer subsidising that company to the tune of around £12.5k every single month. That's £12.5k every month that's no longer going down the toilet! On top of that, they have also off-loaded the £2.2m liability in that company to the buyer as well - genius! Hope I'm understanding the RNS correctly but that's the way I read it.
Crash2016, this is actually very good news. Any business that disposes of assets - toxic assets, is doing the right thing. A company is not only judged by a snapshot of its current earnings performance but also the actions of its board. From what I can see, all indicators a pointing North and a new trend is emerging. A very strong board of directors who are killing off loss-making assets, have successfully completed a substantial capital injection and have acquired additional profit-generating companies. New shareholders will do well in this share. It's a shame for long-term shareholders, but that's the way it goes sometimes!
Fully agree, this is only going one way
EBITDA loss of £149,000 on revenues of £1.2m and had net liabilities of £2.2 million. It had to go, going to be a while before we see any real benefit
For the huge sum of £1 No wonder they done a placing at 4p. This is going to collapse quite soon imo. There is no reason for such a premium share price in such a poorly run company. It's more like a vehicle for extracting cash from shareholders.
agree with crash
during the last couple of days. The 3 high value purchases that stand out are one costing £17,380, one costing £11,60o and one costing £20,000 at full asking price. Very encouraging.
yes, you should have. Give it time? They need more money? so more placings but at what price? yes in time it will turn round but how much dilution just to get things on track? before it does anything close to a good deal it needs to trim all the fat and raise funds. The next placing, that's where all eyes are looking and that will determine the direction for the rest of this year. My guess is 4p will once again be the magic number.
Don't be too short sighted look at the whole picture you may think the shareholders have been shafted but the reality is you have to break a few eggs to make something good. Give it time and this share will start to rise from where I sit management are getting it right. Keep the faith.
Polish a turd. Management still trying to provide peace-meal after shafting investors. That will only happen when the losses stop and the business starts to turn around. It's not worth a 4p right now imo and today's RNS tells me they are gearing up for the next placing to gain control of their customers. What price this time? 3p? 4p? again How much will shareholders lose now?
I am amazed these are still at this level but the year is still young will expect that sooner or later this year they will touch my target. Good luck all
If they raised funds at 4.2p when the shares price was 12p Then what price will they have to raise them at when the share price is at 7p. 2.5p? It's won't be as much as 4p this time. The dilution on the next placing will be sore and that's clearly what they are gearing up for if you read the following from the CEO. The Board will continue to review future acquisition opportunities in line with its strategy. Particular focus will be given to acquisitions opportunities with £2-5m revenue, 50-60% recurring revenues and local office and support centres that can be streamlined. Further dilution and placings are a stick on.
The market cap here should be no higher than £8 million which is equivalent of approx 4p per share. The acquisitions made were punitive and the loss making business they were bolted on to is not fit for purpose. They have no money left for further acquisitions and once again will have to dilute even further. This is one I would avoid like the plague because there is not a cats hell in chance they will raise funds without having to offer a huge discount meaning shareholders once again get licked.
Unfortunately the trend appears to be a downward one. 4p - 5p does appear to be where this is heading unless some transformational news is announced.
I did say this would fall back to 4 or 5p and it's on course to do just that. Be in no doubt that when a company as fragmented as pinn posts huge loss making results like that last set having raised funds at 4.2p then the funds were to plug a gap and that's all. The ship is still sinking and the money will keep them floating but don't expect growth. They will need to spend better on the next fund raiser. They will be back uot with the begging bowl soon enough.
Pinn's website says that Ian Winn is Pnn's Finance Director, not Darron Giddens. Is this why Darron's holdings do not show up in Directors Deals?