Member Info for lehibou

Part 2

First apology, tables changed between LSE posting box and uplift to the site. Hope it still makes some sense

But these are my musings. I would be interested in other thoughts.
As ever DYOR please, and not take the above as an investment recommendation. I am using my own money and my own research for better or for worse. Again I repeat DYOR.
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I was looking through the AIM 100 in the IC and I noticed MARLOWE (MRL).This is a company that has rapidly expanded in the fields of health and safety,fire safety, water treatment,law, occupational health and air quality through numerous takeovers of smaller companies .Quite a conglomerate and reminds me of the Slater/Hanson era although Marlowe are mainly using cash plus earn outs. I wish them well, but the point of this rambling is the prices paid and the relevance to PHSC.
All millions
Company Revenue PBT Net Assets Price Paid

Solve Not disclosed
(HR and
employment law)

Managed Occupational 4 0.6 0.6 1.8 up to 3
Health

Eurosafe 3.4 up to 2.5

Law At Work 5.4 1.0 2.2 6.3 up to 10.3
(subscription based
employment law
and Health and safety)

Fire and Safety 4.3 0.6 1.2 2.4 up to 2.7
Systems Ltd

Quantum Compliance 4.5 0.5 1.0 4.0 up to 7.2
(health and safety)

Current MarketValue
PHSC 4.43 0.28 5.3(?) 1.5 (inc 0.7 cash)

So what is my point. Marlowe seem to have a penchant for buying small companies that help others with the necessary but “irritating” aspects of corporate life. If PHSC can ever turn around the security subsidiary (or sell it) then their profits should be nearer the £ 0.5mi level. Their worth as a stand alone company or as a purchase for another would in my opinion be in the region of 25-30p. A purchaser would surely be able to substantially reduce the Head Office costs. Do not be mesmerized by their net assets as they must surely be reduced by more write downs for the security side. Again courtesy of the IC, I noticed a quote from Stuart Widdowson (a manager of a small companies fund)
“We look at whether a company would be worth more to a trade buyer or a private equity investor”

N.B
All the Marlowe and PHSC's figures are pre COVID 19 but I think this demonstrates that when normality(?) returns and Health and Safety are still paramount in both company and public minds, then a re-evaluation could occur.
I have a holding and after my own analysis have bought more. I am happy with my position and the income stream (final might be passed as per other companies!),and view it as a long term holding .

If you want to build a holding,perhaps do as I did.Watch the trading and offer to buy 1p above the last sale.It worked for me and enabled me to achieve my required holding over time.

Mentioned in the IC in an article on ethical (!) investing.Might be worth e-mailing editor john.hughman@ft.com to make him aware of various concerns about the treatment of private investors,and hopefully get some press coverage.The media always love a good cause.

At last life! I have been following this company for many years and hope one day that it's fundamentals will eventually appeal to others. At report 31/3/14, Turnover £ 7.6m v£ 5.8m Cash £700000 Net assets £6.4m 51p per share Div 1.5p per share Earnings 3.9p using actual number of shares at year end QCS final payment expected to be £80000 , actually £105000 (draw your own conclusions) B2B final payment expected to be £250000,statement 8/9/14 expect this to be exceeded. Also in statement EBITDA PLUS 22% Cash flow positive, strong earnings growth,35% below net asset value, almost 5% yield. Conservative ,cautious management,strong stake in the company. I believe that a minimum p/e of 10 would be appropriate and given the growth prospects possibly 15. If the 4 month momentum can continue( +22%) then an earnings of 4.7p is attainable.Hopefully with a lower tax charge.So a price of 47p to 70p within 6 months!!! As always DYOR but I hope maybe the IC will find it!!!

The chairman stated "in our last annual report I explained that we were expecting full year revenues for 2012/13 to be marginally ahead of last years and for profits to see a small improvement.We are on track to EXCEED those expectations. My capitals

After the interim report,I anticipate earnings of approx 4.6p per share.If valued at current p/e that would equate to 35p. Last year 400000 pbt,extra from QCS 100000,BtoB 150000 Total 650000,with their normal tax charge this equates to 488000. Next year B to B could produce 300000 ,assuming no growth elsewhere this would lead to pbt of 800000 and earnings of 600000,5.7p per share.Share price 43p. If the market upvalued the p/e to 10 then a price of 57p could be achieved. All that needs to happen is for other investors to discover PHSC,perhaps Simon Thompson of the IC