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Initial coverage brokers note showing business growth trajectory, increase in cash-flow and renegotiated loan debt all in one document. We wait in hope.
The only anchor holding back Porta from rapid progress is the legacy 12% loan debt so the real pressure is now on Gene Golembiewski the FD to resolve this once and for all. There is absolutely no excuse now to be carrying loan debt at this unacceptable rate. Porta is now generating free-cash and should be easily able to secure cash to refund the loan payment at LIBOR + 1%. That would IMMEDIATELY bounce the bottom line and, combined with reverted dividend income from the extra 15% of Redleaf would transform group earnings. This is a number one must do and has been a priority since September last year. Gene must sort this or his position will come under scrutiny. It's not rocket science now that we are generating cash; the banks have been directed by the BoE to support SME's. Let's get it sorted and start to head for that 13p hurdle.
Oh we were reduced 0.25p also due to 100k sell on ISX around 9am. Always check ISDX.
It's as I expected trade wise. The buyer put in nearly 750k of stock. The seller is now clearing down again. Why they are doing it in such a slow timid manner I don't know. Could be that the condition of sale required and orderly market sale? The general market is not really buying or selling any Porta stock here. When the current seller clears maybe the share will push forward. The directors will wait till the results now till they buy in here? Fingers crossed on that 12% loan.
Porta is clearly suffering from market maker apathy at present where the price is 'flipping' 0.25p on minimal [100k] trading and the 16% spread is certainly not helping. We are clearly in the doldrums despite all the positive noise coming from Redleaf, Newgate and PPS via Twitter, Gorkana etc. It will not take much to tip the balance if the new senior appointments and their effect on business starts to spread. The biggest transformational deal is in the hands of Gene [FD] who can single-handedly change the prospects with a stroke of the pen by renegotiating the onerous 12% loan debt. This would bounce the bottom line overnight and pile cash into the coffers. Come on Gene; cometh the hour......... Everyone else in the company is firing on all cylinders....go for it.
Can't fault any of your logic. Porta appear to be targeting the insurance market as a niche. The market is buoyant at present but IPO's are suppressed. I expect this to reverse in Q3 and accelerate in Q4. We have built the experience and expertise to really thrive as market sentiment returns post Brexit. Porta, Neewgate and Redleaf are all in a sweet spot for Q4 2016. You can quote me on this in early 2017 when the share price is 3x what it is now. Mark 23.25 08.08.2016.
Last year it was September 22nd. No doubt we will get an RNS early September to announce this. Could be around 20th-22nd is my guess. Last year it was on a Tuesday. So less than 6 weeks away maybe?
When are the results?
Late trade for 12.43. 182149 shares @ 5.49p. Explains the shift in prices today.
We had a period where essentially 550k of stock was sold. We have now had someone soak 546k of all this stock. Perhaps MM are just adjusting prices accordingly? As far as I can see there were no trades at the times of the price moves. I still think seller will kick back in tomorrow. The 539 trade sell last week was a tell tale sign. Maybe level 2 trades have more buyers in the wings? It would make sense to buy in before the results if news is positive. See what happens. Were by no means past the worst of this but I still believe a big buyer is in the wings building up a 5-6% stake. Clearly not even halfway to this as no RNS. See what happens.
director at Redleaf. http://www.gorkana.com/2016/08/60-seconds-with-simon-hayes-director-at-redleaf-communications/ Overall he seems rather upbeat and positve about Redleaf and their ability to take away Insurance PR from traditional PR firms. Also about what Redleaf is able to offer to the market. Were under 2 months away from 6M results. So far we know revenue is slightly ahead for first 4-6M. If they can avoid silly D and A write downs then this will be good news. They made a 1.9M loss last year at 6M. That included 1.33M D and A. Nearly 300k in other one off costs. 387k or so share based payments. We should also not see the loan costs. Hoping some of the 1M savings will also appear. Is breaking even a prospect or am I being too confident? Also hoping to see the marketing division not losing 102k again. DW at AGM said all division were making money. My gut is the results should show a company gradually turning things around. Were just all waiting on news of refinancing the company. Will this involve some major new investors coming on board?? We can't rely on Bob for too long as he will want out at some point. I think an acquisition of a firm generating 1-2M profit would help Porta most. Economies of scale. They would need help from a bank for this. The exchange rate should certainly help with the foreign operations in Australia, HK and other countries. Buying up more of redleaf too to reduce dividends. They clearly had 423k in bank to spare to help pay for this? (I assume they have not borrowed more.) See what happens I guess. Looks like MM have shifted price today slightly around 9am. Sells were coming in at 5p. The seller does not like to sell below 5p from what I have seen. One buy at 5.39p today. Looks to be same buyer as usual.
Hi GT - it's actually very good news that we are getting more of Redleaf as it brings more profits in-house and that goes directly to Porta's bottom line rather than in associate dividends being paid out. The share reorganisation is a housekeeping exercise which could actually be helpful in a year or twos time. The main priority, and the one which will have an immediate and profound effect on the shareprice, is renegotiation of the loan debt. There is absolutely no excuse now for the BoD not to be able to get a huge reduction to around 5.75% from the current [ridiculously high 12%]. The government is pressing banks to lend to SME's so this is a perfect time after yesterday's 0.25% rate reduction. Time for Gene to really run with this as FD.
Still figuring out how they are doing the share issue. Half cash but then new 1p shares? Clearly shares are well below 13p mark now. Not quite got head round this yet but owning more of Redleaf is a good thing.
Porta acquiring another 15% of Redleaf bringing ownership to 66% and bringing more dividends in house. The share reorganisation is merely a book-keeping exercise and has no effect on existing holders. Coincidentally, It actually paves the way for the introduction of a dividend payment in the future when the board deems appropriate. Redleaf has a good recurrent income stream and is growing client numbers nicely.
Been a few crazy days of trading, Today saw one (?) seller dump 407k worth of shares. Someone else has just chirped in with a 250k and 150k trade. Both buys. Previous week we had 2 traders swapping close to 400k share. Since May 24th excluding Bob's trades someone or various buyers have bought over 4.2M shares. If this is mainly one buyer then it won't take long for an RNS. This is same pattern as before the results.Pretty sure the current seller/sellers can't have that many shares. This looks very much arranged. I don't believe any of the major share holders above 3% are the seller. Especially given AGM comments. Actually having Nsinger back as a broker might help Porta identify the seller as Nsinger arranged a lot of the early share issues in Porta's early days. See what happens. It's reassuring someone is supporting the SP here.
Huntsworth results were quite strong this week. Strong growth on sales. Big loss from a write down but clearly moving ahead on profit from operations.
Still appears to be same buyers and sellers here. A fund or corporates are buying sold stock. One of the reasons the sp has not really fallen much with so many sells this week. I don't think the seller will go below 5p.
Adastra excellent overview as usual Seems stock is moving well this morning Great deals on offer. At the back of my mind and once again who in their right mind would want to sell at stupid prices so greedy ones like us can snap them up? I know the company has debt and made stupid acquisitions like 20/20 but it does have some excellent money making operations around the world.
Now we have separate and effective Broker and Nomad in Singer N1 and Grant-Thornton we should start to see increased investor exposure. Newgate and Redleaf are 'household' names within the City, Porta less so. It's now time to see just how effective our exposure team are at promoting Porta the company. We urgently need to get on the radar of more growth fund investors to widen our shareholder base. It's ironic that we seem to be gaining a lot of Insurance company clients but we have yet to get them on our share register. Momentum appears to be building nicely now that we have achieved the 'critical mass' that DW envisaged with his build and integrate policy. Staff incentivisation is key to capturing clients and the new integrated financial, corporate and trade offering is hitting receptive ears. The company reputation is growing in the City and it is attracting some of the best talent in the business. Key management figures are joining Porta and all are quoting the novel integrated services platform as a strong reason for their getting on board as the business scales-up. Cash generation is key and last year saw a near 40% increase in gross profit with 14% organic growth. It seems to be escaping big potential investors that organic growth has averaged over 100% since inception in 2011. More importantly, operating cashflow turned strongly positive last year to £1.3m from a previous year outflow of £3.4m. The market must soon wake up to the fact that the business is now a fast-growing operation coming from organic growth of maturing constituent companies co-operating under one umbrella. I have waved the Porta flag since inception and am exceedingly frustrated at the current low shareprice, but I have outlined the various reasons, most of which are now receding. The balance is tipping quickly this year and I expect sentiment to change equally rapidly as the next stage of growth kicks in. We have effectively been operating in 'stealth mode'..... now is the time to decloak and be noticed.
Bridge Ventures retain Redleaf. Always nice to see Redleaf keeping a contract. http://www.gorkana.com/2016/07/bridges-ventures-chooses-redleaf-communications/
The bull points are that DW has NEVER issued shares below par value 10p for any acquisition. I estimate his own b/e price to be around 9.3p which is close to par. The recent share incentivisation scheme has a 'hurdle' price of 13p below which there is no payment to the three execs in question. The business hit positive cash generation this year which was pivotal in both strategy and the ability to negotiate debt restructuring with banks who will now be willing to listen. Combine these with progress to the next phase of growth and we should see 10p broken sometime by end 2016 with rapid consolidation before a new growth phase begins in earnest in 2017. I am expecting major 'events' in 2018 as the revenue breaches £50m and upwards. All IMO.
Hi Adastra Thanks for your response. I have been in this share since the heady days of 0.30p now 30p following share reduction so my average is quite high compared to most. When in your opinion are we likely to hit 10p and is there any science to your thoughts on this date.
Steffan Williams MD appointed Chairman of PRCA https://twitter.com/PRCA_UK?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor Just how much progress do investors need to see with Porta before they realise the whopping networking base that is being built here???? Congratulations Steffan.
I should have added, that exactly the same pattern happened with Citigate in the 90's headed by David Wright before he grew Incepta, both with huge success. The shareprice languished unrecognised and below the radar till it finally drew attention. The sentiment changed literally overnight and the buyers appeared in droves wanting to be part of a unique, successful and strongly growing business outstripping its peers. The shareprice and MCap responded accordingly, rewarding handsomely those who had the vision to invest during the build process as organic growth kicked in strongly. The very long period of frustration should now be coming to an end. This quarter may show a Brexit hiccup but Q4 should signal a resumption of strong growth with 2017 being a real cash generator IMO.
Hi mazzgd - welcome to the conversation. We are all as frustrated as yourself that the shareprice is totally disengaged from performance at a company level. GoTrader and I attended the AGM where I presented ten specific questions, all of which were answered positively. Trading in the Jan-May period was on target and on budget, exceeding last years levels but the effect of Brexit was wisely answered with caution since its effects were not accurately assessable. The IPO market is currently down but should bounce back as pent-up demand is strong for companies to expand and float. That would affect mainly Redleaf, but their string of new contract wins from established companies appears to have increased considerably. Newgate has a lot of repeat business and its U.K. arm may flatline for the next quarter, but it too appears to be performing well. Newgate Australia is accelerating and will also benefit strongly from the exchange rate balance this quarter. It was a �1m start-up that must now be approaching a value as much as the whole company as a stand alone. I asked Porta for a look around the head office post-AGM which, as I was informed, would be difficult due to the volume of price-sensitive material which may be on desk and display. Instead, I was presented with the induction process given to new clients and the range of integrated services on offer by Steffan. It was an excellent and comprehensive portrayal of client capture using the 'unique' integrated services platform and I was impressed. It was clear to me why I would choose Newgate as a one-stop operation covering financial, communications, reputation management, client engagement etc. It was also obvious why quality managers were joining Porta as it was carving a distinct niche for itself, gaining traction. Revenue has increased strongly every year since 2011 so why the heck are we not hitting double digits in the shareprice??? Three reasons: one: Sanlam/Allenby have given virtually no investment advice/broker notes on Porta. We are still a small sub �25m MCap and really need a keyed up advisor to engage, whet and monitor investor appetite. That hasn't happened for 20 months now. The appointment of Grant Thornton as Nomad and Singer N1 as broker has given us that essential split-role combination to rectify this. Two- onerous loan debt currently at 12% from the chairman and family trust. This is far too high and should be halved to LIBOR +1%. I brought this up at the AGM. It IS a priority that could only be realistically tackled when the banks saw current strong organic growth and cash generation. I, personally, expect that to be the subject of an RNS in the not too distant future and it should have a significant effect on shareprice and sentiment. And Three: probably as a direct result of one and two, we have a persistent seller who has constantly dripped blocks of 25k shares every time the price rose for over 18 months keeping the price suppressed. This will end and so will