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'In June 2018, Porta ceased payment of the interest on the RGL instrument, and as such started to incur penalty interest on the capital and unpaid interest, resulting in a debt increase of £0.6m. Combined with the £0.3m of accrued interest on the DDB, accounted for an increase of £0.9m of the debt balance, which was marginally offset by decreases in finance lease obligations and the RCF, part of which was re-paid.'
So if they don't make certain debt target they incur rates of 12%. Looks like June 2018 they were running out of cash. I guess this merger will remove the debt? This business needs a 10-12m cash injection. Remove 1.3m of yearly interest and after all the add backs they might make some money. The write off of 0.5m will help 2019 accounts.
Overall the Asian businesses seem to be doing well. China businesses booming. Middle East operations have recovered well. It's just the core costs in the UK causing a financial burden. Same story as last year. They needed to make cut backs in the UK but it seems 0.8-1.4m to do this was too big a burden.
See what the merger brings. How much more cost savings can be made with SEC? 2-3 million if they remove debt completely? If people are going to make money out of this it wont be the Porta Shareholders.
I hate to say this but the board have been led by ego and greed
Look at the salaries!!
Business is simple income must exceed expenditure
Forward earnings come next to build shareholder confidence
Even before DW took over From WFCA/TTMV it was going wrong
The Morton’s have been living off reputations of old and that applies to the current CEO
Such a shame but not unusual on AIM stocks
Yes TTMV was a classic case of one big client which if they go the business fails.
Summit never really seemed to make money. Same for their European offices which just seemed to go.
Redleaf/Publicasity have done okay.
Newgate Uk has been like a lost sheep. It just seems like no one was watching what money was being spent.
The large volume of senior hires DW bought in just never seemed to cover their wages. Large bits of work can be very profitable but if they don't come in then you are just left with a large wage bill. These senior hires were on huge wages. Some of their existing staff it seems were not covering their wages either. (How can you run a business like that?)
The fact that they could find 3.6m of costs that could be removed says a lot here. That coupled with crippling loans and large rent costs made Newgate almost unprofitable. These new firms should of been integrated much sooner. Partly delayed by fact they never fully owned Redleaf. It might have been better to offer an all share buy out of Redleaf at start and strip out costs asap.
There is a lot of dividends from Asian firms still leaving Newgate. So 1.5M profit which a 1/3rd+quickly gets paid out to third parties. Even so with 1m or so buffer the UK office needed to make some money. I think the belief of the board was that they would quickly expand and find cost savings this way. It just never seemed to happen as they ran out of cash and the SP dropped. The way this merger with SEC is taking place shows how far Porta has fallen from it's 13-17p grace.
...so am I thank God. Worst share I've ever held.