So - under A Bonner, the plan appeared to be to acquire apparently poorly performing tech / comms businesses, strip out the duplicated bits (HR, Finance etc) and integrate them into PINN, do some cross selling etc = make them profitable.
This seemed to work ok with some businesses, and they made some money for PINN.
For some businesses the "Bonner Plan" didn't actually make them profitable. (RMS would be an example I think).
With changes at the top, it wasn't surprising to see a change of strategy, and disposing of RMS and other services that were duplicated elsewhere in the business / were only in place for legacy reasons all seemed to make sense.
The recent, not yet integrated, acquisitions of AncarB and Westons could well follow the "Bonner Plan" - maybe successful, maybe not.
But with the disposal of everything else to Chess inc 27 staff means that with the exception of senior management, there's almost nothing left of what Bonner built.
PINN now appears to consist of 2 recently bought companies and senior management (directors excluded) who've been working in Telecoms / Connectivity sector - and not in the "IT as a Service" sector.
It's a bit like the "Triggers Broom" thing - it's the same broom - but it's had "17 new heads and 14 new handles".
What do I think this means? That the past performance of PINN will have no relation to future performance.
So the question we all have to ask is, do we think that merged AncarB & Westons are worth more or less than 6.5p?
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.
"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?.
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