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Adastra, Do you have any contact or e mail addresses for the board. It would be worth sending them an e mail expressing our concerns. Or alternatively perhaps all us small share holders could ask for a meeting with a couple of reps on our behalf attending.
Debt/Speed/Clarity. Porta needs to address three things urgently to change sentiment. 1) Get the onerous debt interest down from 12%. Depspite negotiation over the last three years not a single percentage reduction has been achieved by the incumbent FD. 2) Speed - why does it take Porta six months to get its final results out when eg WPP and Huntsworth can do it in less than three. 3) Why are the accounts so complicated that you need a degree to interpret them? Once these are resolved then all the giant leaps being taken by the fresh entrepreneurial management will become evident and the shares will rerate accordingly.
We are all saying the same thing but no one seems able to answer a simple question. Why cant or perhaps why wont PTCM get a better loan rate.
The company is stagnating with an MCap of £12m because it has £8m of loans and convertible loan notes stuck at 12% interest pa. This is masking all the excellent work being done by management who have increased turnover to £34m and rising with successful underlying organic growth. Momentum and benefits of scale are kicking in as is cross-selling over the Newgate platform. Get the debt interest down and Porta will move strongly ahead IMO as its the only thing putting off instos and PI's.
The company would be profitable if it could either reduce or divest the debt interest. Ideally it needs a combined approach by management and 'new' supportive instos to buy Hawk/BM debt but therein lies the problem; at what price? Result, the current stalemate. I am expecting Porta to have 'bucked the trend' and shown strong growth but until that success is not merely being used to service debt at 12% I can't see progress against that constant headwind. Steffan is certainly a very savvy guy, and as CEO I do expect that this priority is high on his to-do list.
So what does 12% loan interest rate do to profit. Lets just say Bob borrowed PTCM 3m at 12% that's 360k at 4% that's 120k that's 240k profit gone straight away. Hmm. Perhaps this is some of the reason we are not in profit.
The whole purpose of PTCM is to make acquisitions. If they are not a public company they won't be able to do this because companies will not take on equity that they cannot sell when they wish to. The problem isn't the debt interest, though it would clearly be better if it was less. The problem is that the company is not profitable at present. The revenue for the last three halves has been stationary and given that Australia has been advancing that means the rest has gone backwards. Is it too much to expect a PBT of 10% of revenue?
Totally agree with you. Pretty much echos my earlier e mail.
A mandatory offer must be made once a person either: Acquires 30% or more of the target's voting rights. Is interested in shares carrying 30% to 50% of the target's voting rights, and that person or a concert party acquires an interest in any other voting shares in the target. And therein lies the sole problem why Instos have been reducing their holdings rather than increasing IMO. Porta drastically needs a rebalance in its shareholder profile which is virtually impossible with Bob [and Hawk] holding so many shares AND dictating the company direct levels. Its a bizarre and odd conflict of interest since this balance is only benificial to BM. One could speculate that director pay is disproportionately high for such a small company in order to suppress a BoD rebellion. Effectively, Bob [and his holding array] control the future. As a seasoned small company investor and entrepreneur, he would normally expect a three-fold return on his investment. That looks further away than ever at this level BUT, by accumulating shares at 3.5-4p he has dropped his average price considerably unlike DW who is still at average around 9p. BM is now in his twilight years and I think his previous benevolence and support is now shifting to different Morton shoulders and that is why we have the stalemate. Two options IMO. It looks to me like the proceeds from the onerous 12% debt, which is in itself is suppressing the shareprice, are being used to buy more shares. Once that reaches 30% then a bid could automatically be triggered - at what level is anyone's guess as BM has the 12% anchor as leverage. Option 2 - just take the company private, again, same rules apply. That is why the shareprice is languishing IMO despite all the hard work being done by management and the sole reason that I'm not jumping back on board. It really will take a management rebellion IMO to shake off Bob. I'm sure that there is a mutually agreeable way forward but it won't happen till the long-standing issue of onerous debt is taken head-on.
If Bob gets to that main number for takeover what does the do to our share price
Excellent post Adastra. I think we have to wait and see here. Fact is with the debt and his 23-30% stake in company Bob is pulling the strings for now. Hopefully no RNS tonight. Budget day is the day to sneak out bad news. I can see why you have been so frustrated by this share. You have tried to fight the good fight here. I guess only the directors will truly know what is happening here. I doubt they could tell disclose much info over an email without breaking certain rules. Maybe with Steffan in charge more will happen on this matter now? At present Bob is stacking up more and more shares. What percentage does he need to reach before he has to officially declare a takeover here?? Hmmmm.
Off course as my earlier e mail the mortons are able to pick up shares as they have been recently dirt cheap then drop the high interest rate and make even more money. Or am I being to cynical
Hi Guys; Having spent substantial time in the past relaying my thoughts and suggestions to the BoD [old and new] it is obvious that the issue of the 12% debt interest is the biggest contentious issue. On the one hand you have reassurances from the FD that he is ‘all over it like a rash’ and on the other hand a BoD not to pressure the issue [for fear of some kind of repercussion?? Never did get a straight answer]. Drop the debt to LIBOR + 1% and this company with its proactive hands-on management would soar. I did ask for Bobs e-mail so I could make it personally, but the then CEO suggested it was not the best way forward. I am led to believe from over 3 years interactions that all senior internal e-mail was/is cc’d to Bob anyway. Bob has been sanctioned four times by the Takeover panel to date; he’s a pleasant enough chap and without his financial support, Porta would have buckled financially several years ago, pre-Steffan. I am convinced that Steffan, Gavin and new Board members would resolve the debt by ‘buying’ it off BM if the option were there but I got the impression that it was far more complicated than it first appeared. It is bizarre that the one holding the reins on the debt is the one putting the brakes on the business! Take off the brakes and the value of the Morton/Hawk conglomerate holdings soar in value and so does the value of the holdings of long-suffering shareholders. Bob is certainly in the twilight of his entrepreneurial stewardship. Time to capitulate and let Porta fly.
Hope you are right.
Closer to 8p here now. Not too worried as I think this is very under valued. Any good news could lead to a surge in share price here.
Agreed. Just frustrated as five years on still trapped in losing 10s of thousands. I have managed to average down though to just over 10p from the heady days of 30p
They are doing well in terms of interest but at same time this is crippling Porta and share price. They are probably losing money on most of their 66m shares. I can't see how this is good for Morton? No point posting about this daily. Only the bod will truly know what they plan to do here. If anything?
So if the mortons are really interested in really seeing PTCM thrive. Why don't they reduce the debt to say 6% this is still twice what banks borrow at. Nobody on this board knows what the mortons agenda is. As I said they are doing well at both ends high interest charges and low share price so they can mop up all IMHO
Your asking a similar question to what Adastra asked at the AGM last June. My comment on debt from AGM was 'Looks like they are looking to long term refinance Porta.' So far we have had no real update Were all frustrated by these costly loans. Just found this. Newgate are acting on behalf of Impact Healthcare. http://www.investegate.co.uk/impact-healthcare--ihr-/rns/first-day-of-dealings/201703070801036690Y/
So answer this why the extortionate interest rate. What is the real agenda here. If he wanted the company to thrive he wouldn't be saddling it with this much debt repayment.
The Bank of Morton is a good deal more accomodating. He has more of a vested interest in PTCM succeeding.
I am sure they would of done that months back if it was possible. Banks probably won't lend to porta. They are not yet making money.
I am sure that if PTCM went for a business loan they would get it at much more favourable rates than bank of morton
Isn't the fact that they haven't been profitable enough to refinance the loans with a proper bank. Costs have kept pace with any increase in revenue meaning that they haven't produced a genuine profit. The lack of profits depresses the SP which then prevents them making any sensible acquisitions. The Morton loans are a symptom of the problem rather than being the problem.
IMHO the reasons the mortons wont reduce the loan rate is because they have the best of both worlds. Low share price so they can pick up shares cheaply all paid for by the extortionate interest rate, where else are the mortons going to get 12% interest rate. I have been a holder fir many years and i am sitting on a big loss, the mortobscare only interested in lining their own pockets, no doubt their will ve sweetners for their mates in PTCM. All IMHO