Member Info for Adastra

Looking at the very positive trading update in February and the upcoming Incentive scheme I can see a lot of investor interest beginning in the new tax year next week. The potential gains in the coming year look very good indeed as virtually all legacy costs are now retired with substantial centralisation costs kicking in whist revenue continues to rise. HH will hopefully have achieved their desired holding by today to offset their VCT gains. The stage is set for a nice long sustained recovery to previous highs as we enter the new tax year. Next week should see buyers queuing to pick up shares at this suppressed level given outlook.

With their hands up in the corner..........April fool? ........................just jesting.

Fk1 - can't fault your logical reasoning, but I continue to believe that the securing of front-loaded non-disclosable cyber contracts alongside small government contracts will see cashflow to August. This will allow the extended time required for approval and validation of the bigger contracts alluded to in the interims. Visibility or closure of these contracts in the near term will either aid any funding required or obviate the need for it IMO. Time will tell, as your near-term view is obviously shared by the market. Any good positive will have marked effect on the current bombed-out price.

I agree with your observations GT and agree that the Siemens contract is another good one in the bag. You already know my opinion of current Nomad Sanlam - morphed to Appleby - who have done nothing to promote Porta so I wont reiterate. A lot is happening at Porta as it transitions from a cash-hungry 2014/15 to a cash-generative 2016. The 2015 results have been pretty much telegraphed as rising EBITDA with costs incurred in streamlining profit makers and culling Belgium and Frankfurt. All cost savings will be seen in current year so it is the last 3 months trading and outlook that is pivotal to progress this year and will guide share price rise. I am frequently criticised for my optimism in the face of a suppressed price but I have given valid reasons eg Sanlam and HH selling as Porta doesn't fit remit for their VCT fund any more. BUT........ The businesses that comprise Porta have been growing revenue strongly from start-up and acquisition. Poor performers have been sold and strong growers supported giving bottom-line savings in the current financial year. Directors have the unique insight to horizon scan and I am sure that's why Steffan jumped on board in October and Gavin joins in July. These are big players in the industry bringing much talent and experience but also with a lot of kudos to lose if they don't perform. They have specific remits to attract bigger players now the stage is set and to dissolve traditional internal barriers for integrated and comprehensive communications. I am assuming that directors have been precluded from buying due to specific inside knowledge of any possible acquisition. We have just entered the statutory closed period with pending annual results within 60 days. THAT is why I think that the recently announced share incentive scheme is the real indicator of traction. It is the only means by which those who are driving the business can get exposure to the significant prospects they see unfolding as they have been/and are unable to buy shares in the market. Look at it - for every 1p the shareprice goes above 13p [the hurdle] the directors will get Porta shares to the value of just £420k [at March 2016 agreed 6.38p]. That gives minimal dilution for us shareholders but means that our shares will have doubled in price from today before directors receive a penny. THE IMPORTANT POINT TO NOTE is that this incentive scheme is NOT linked to MCap but to shareprice. I agree with GT that probably Steffan, Gavin or indeed Capital Access have awakened new initial Institutional interest and I suspect canny MM's are seeing this and taking stock on their books at this level as well as first movers. HH will hopefully sell out before 4th and scheme will be voted in shortly afterwards - that's when I expect a lot of price action [gut-feeling]. If underlying business wasn't doing well, why would you introduce the scheme now?? You'd wait for any bad news and then introduce it . Looks like the outlook is still reflecting February

Next week and the start of the new tax year should be a turning point for Porta. I suspect the rash of sells is reflective of HH desire to go before the date. The share should then markedly jump to reflect 2016 actuals. Just a hypothesis that fits the current profile. The MMs must be grabbing as much as they can at the moment to sell on at a nice profit.

Of the relentless VCT sell off by HH. Once cleared it will allow stabilisation and then rerate. At the work face the business is growing and the disparity between MCap and Turnover provides a better investment case than ever at current levels. HH decision to exit on grounds that Porta does not now fit in with its VCT fund criteria is creating a false negative. This should quickly be adjusted when their task is complete. Painful, but the end of this process will see growth funds quickly filling the gap as the 2016 growth emerges.

I do hope that shareholders and potential holders have really weighed up the share incentive plan as it is excellent news for them. I apologise in advance for those who are well aware of the terms. Simplified, the directors with hands-on responsibility for growing the company are being given out-of-the-money A shares. These have a set life of 3 years till 16th March 2019 and a two year lock-in after conversion. They are worth NOTHING till the share price goes over 13p a share. For every 1p the shareprice goes above 13p [the hurdle] the directors will get Porta shares to the value of just £420k [at March 2016 agreed 6.38p]. That gives minimal dilution for us shareholders but means that our shares will have doubled in price from today before directors receive a penny. THE IMPORTANT POINT TO NOTE is that this incentive scheme is NOT linked to MCap but to shareprice. That is massively important to any holders at present or getting on board at todays level. WHY? Because it means that any acquisition has to be immediately earnings enhancing to keep the shareprice rising or the directors loose out big time. It's a great incentive scheme and I hope it's voted in as it will certainly encourage the big boys wanting high growth small-cap exposure. Its a huge vote of confidence in the capabilities they see ahead. You also have to ask why its being voted in now rather than later this year if there are any hiccoughs ahead - certainly would appear that there is a lot of good news to come in short order after this is voted through or they could have manipulated this to follow any bad news. The future looks bright imo as timing is everything.

Nice to have some more positive comments here. The biggest problem has been investor communication as I previously explained. IMO solely down to Sanlam being so involved in their own internal wrangling that they totally ignored their clients. The biggest mistake Porta made was retaining them and now with Allenby. Time to cut loose. As you point out MCap:Revenue is ridiculously low, that's why we need a first rate proactive Nomad/broker with vision. Porta is one of the few AIM companies where they could make serious money if they look ahead. The instos will come once we confirm continuous cash generation. Porta have incurred additional overheads in rationalising Frankfurt and Belgium but these should be more than recouped by savings this year. We are now well into 2016 and things should be shaping up nicely for first quarter figures.

The current imbalance between sells and buys means that someone - either MM accumulation or an off-market buyer - is picking up Hargreaves stock. Just a matter of time till it turns. Has needed shedloads of patience, but come it will.

What we really need is a complete change of Nomad! Sanlam did virtually nothing to raise the profile of Porta from their appointment in October 2014 for 18 months due to internal wrangling by their [overpaid] qualified execs who were essential to their existence. Capitulation followed and the and the QE's transfer to Allenby. Meanwhile, Porta has been growing, streamlining and winning new business - all of which has gone largely unnoticed as result. What Porta really need is a first-class proactive Nomad lining up hungry institutions and telling them just what is being achieved here. You can't blame the insto's for not buying in if no-one is giving them the info. We are too under-the-radar at sub £20m MCap to elicit big insto research. Hargreave Hale is selling presumably because Porta no longer fulfils it's strict VCT [Venture Capital] criteria, not because there is something fundamentally wrong here. A breath of fresh air would certainly help imo.

Eventually.............................................HH will go away............................eventually. Then the MCap can start to reflect the underlying business.

From your comments, I'll take it then that you haven't attended the AGM, talked to Redleaf PR, contacted anyone within the Porta group [employee or director] or done any real digging into why its posting continually rising revenue growth etc etc. You also haven't noticed the fact that I attribute a lot of the blame to having wonderful Sanlam as our Nomad last year. They spent a whole year since we engaged them in October 2014 doing........................................... which is why, despite a continual growth in revenue and a stream of positive news releases regarding progress, we went nowhere. With an MCap below £25m it is absolutely vital to get a proactive Nomad/broker to engage with new II's and promote the prospects. Sanlam were engaged in internal wrangling and Porta were consequently neglected. The Company is effectively 'under the radar' of bigger institutions who do not consider sub £25m AIM companies - period. Porta is held in HH VCT funds and we are now effectively out of its VCT remit, hence their selling as it does not comply with their investment criteria for the VCT funds. So we are in a void at present which is one of the few occasions where private investors can pre-empt the bigger players. IF, and I specify IF, as no-one should invest in anything without doing their own research, you see Porta rapidly progressing from cash-burn to cash-generation in 2016, then you will invest and be patient. There are numerous indicators that Porta is on the ascendancy if yo look. Old style PR is dying. Integrated international communications embracing all aspects of company interaction and engagement with its clients, public and suppliers is growing rapidly. Porta is firmly positioning itself in that sweet spot and is winning clients. Porta is NOT a one-trick pony - it consists of nine interactive companies all in the process of seamless integration. LSE boards are all about investor comment and engagement which is great, but at the end of the day it boils down to research, research, research. Ring the companies, ring their PR, ring their clients, attend the meetings, visit the HQ, question the BoD etc. Don't just give vacuous comment. If, as you say, you are a Porta investor sitting on a loss, then get proactive - the BoD are equally frustrated at the lack of performance in the shareprice versus progress at the workface. Eventually.......and its been a long time dawning.....the II's will start to see the progress being made here in this pivotal year of 2016 and they will start to buy-in.

At MedLab Asia 22nd to 24th March - another good sales platform for the 'clean' PoC business to demonstrate its technology. http://www.ekfsupportcentre.com/medlabasia-2016/

Looks like all of the Porta companies are revamping their client online interfaces. Looking a lot more slick and engaging as Porta focuses on its integrated and international approach. Example below: http://publicasity.co.uk/

Agree GT. It really does appear that HH are determined to divest Porta from their VCT fund. Surely they must be getting concerned that Porta are now getting everything together this year with fresh blood in the driving seat and a lot of experience at senior level being amassed. The positive vibes coming from companies within Porta bodes well this year so hopefully we'll start to get our own communications in order and get new II's on board. 500k shares traded on both exchanges isn't huge but it would be nice to see some chunky buys filtering in to prevent the MM's pulling back the price. I'm not a believer in the theory that MM's are able to hold back the price to allow Directors to buy in as Ray M was happy to buy in at 9.5p. I think we just need confirmation that the business is continuing to grow apace as indicated in the last t/u. All ayes will be on cashflow which should have turned nicely positive and give a good basis for growth this year. Nice to see 13 is getting a few mentions too. Lots of activity on Twitter regarding Porta companies nowadays.

I really love your own reasoned argument df - - - you really have got 'Victor Meldrew Syndrome'.

Fair, balanced comment. Come on Dibs, if I was such a slavish sycophant I wouldn't have posted all the balanced negatives towards the end of last year. That was a time when the outlook was far more questionable. I have given valid reasoning why I think the prospects are now improving and cash-burn is reducing towards breakeven H2. As I also said, your own timing on buying and selling into the previous rise was well timed. It all boils down to the type of investment into which we place each stock. You're happy to trade it, and it pays off; others are happy to buy and hold or buy and average down. Ideally, we'd all love to do both and profit from all oscillations but you and I know that it's easy to come unstuck being clever. Whatever ones investment criteria, it's important to constantly reassess why you're invested. Has anything changed to alter your decision to hold. The fact that we are now starting to see visible earnings streams coming into play is a strong development. Three year plus contracts give service visibility and commitment. If this is being repeated in non-disclosable business, then it is a strong investment case. I have given my projections for cash flow to August and breakeven H2. Yes, there are many pitfalls possible, and I certainly don't discount a possible need for more cash as you have long predicted, but that could be achieved as a bridging-convertible loan if needed from the new chairman as well as dilution. (Very important as I mentioned JB own position with regard to shares, no options and no dilution). There is a huge gap between blinkered devotion to a share and reasoned investment. I would hope that my view comes across as balanced argument in the face of a raft of nihilistic posts. If mine is the positive angle reflecting those negative views then surely that's the purpose of these boards. Anyone who invests on the merits of any post here without doing a shed load of research is destined to fail. AIM is a risky arena, but there are plenty of excellent stocks in it. Poor liquidity and the small number of shares in circulation cause wild swings here on small volume hence the price flounders on lack of news. As the upswing starts to take effect, liquidity will improve. Patience is the key. The tipping point of profitability is either imminent or early 2017 so funding is very tight whatever the situation. The validity of the cyber model and its continued progress is not in doubt and the ability of Intelligence and Resilince to surprise is not even being mentioned, despite the backdrop of increased national border insecurity.

So glad I manage to make you smile! My bullish mood has nothing to do with the one contract this morning, although it was one of many expected. I still maintain we have enough cash to August and then a bounce from neutral to positive. If I am incorrect I will also hold my hands up. Whatever the outcome , Falanx credibility has both credibility and earnings visibility. For every contract signed, 'significant' or not, a succession of earnings flow gives increasing validation and reinforces Falanx as a game-changing player. Mock as you may, whatever the short-term prospects: Falanx is growing apace. I am miffed that you aim derision at JB. He has a lot of skin in the game AND has never sold any shares since IPO NOR has he accepted any 'nice little discounted options'! He's in it with all the other investors AND sharing the pain of a woefully undervalued prospect. Yes I admire a manager with b*lls and he is driving diversity into cyber. If ever there was an Ultimate Force in the driving seat I'm happy it's here. I agree with nanadipstick01 in that he can't do right for doing wrong..... But he will do for me and has my vote of confidence, fundraise or not, he will lead this company forward and well upward.

Massively undervalued - its the same clean and specialist PoC business that attracted several bids of £80m last year but was then encumbered by the cash-hungry Molecular division. Free of that, this bird can really fly. Even that conservative £80m is double the current shareprice, and EKF PoC is now effectively a clean debt-free £38m NAV fast-growing business. This is just the beginning. When RZ announces at the presentation along with the results on April 5th, that the business is cash generative from April................ why do a presentation if its not the case???

The approaching wave of contracts........or you can get on board now. Simple choice as Falanx are now inking them in AND showing visibility of earnings. This is not the kind of growth and recurring income stream that investors can sit and watch for too long. The tide is turning and the tsunami is fast approaching IMO. Just a matter of time and a £4m MCap is almost laughable.