Member Info for Strongman

Ceo buys share Friday, good vote of confidence being shown by board members here.

http://www.altfi.com/article/5114_payments-firm-lands-20m-from-hsbc-as-it-rolls-out-fast-settlements-network

BTFATH1

Good to see HSBC UK global relationship director Wayne Shadlock comments on the company and new facility:

The Wetherby-based firm, founded in 1996, said the cash from HSBC was “a vital milestone” in the launch of its accelerated payment facility later this year. It said it would use the funds “to support early adopters of the technology”. HSBC has 14.5 million customers in the UK.

Proactis added that its system would also help larger firms to better manage their supply chains, easing the impact on working capital.

HSBC UK global relationship director Wayne Shadlock said: “We began working with Proactis over 15 years ago and this is yet another example of its innovative thinking. We have a keen understanding of the benefits of accelerating payments through the supply chain and the new technology is both scalable and unique to Proactis."

Shadlock added: “The business [Proactis] is well positioned to drive widespread access to liquidity for SMEs, which will ultimately boost cash flow and support economic growth.”

Well soon find out. Not all funds want to sell at a loss down here, just because one fund manager wants to pull the position, that does not mean they all follow.

Not sure what all this de-ramping is about, the price will come down or go up on one thing only - the seller. With 7.2m cleared and flushed through Thursday/Friday, it will not take long to move anymore, if there is anymore to remove that is. Relax, if you are after a lower entry, then it will present it self over the next day or so.

For me, I have worked the numbers, and believe the seller is Liontrust (9.8m) or GVQ (6.7m), so they are either flushed last Friday or another minimal 2.5m to be flushed into the book Monday morning.

Hence I will be uplifting another £20k worth myself, rather be in position for when the selling stops and the book switches. Any price movement if I have called it wrong will only be a temporary inconvenience anyway to me. it is more about being in for the bounce then being out and trying to gauge the floor bounce.

Edit: 165 not 175.

PROACTIS has conditionally raised £70.0 million (before commissions, fees and transaction costs) by way of a conditional placing on a non pre-emptive basis of 42,424,243 Placing Shares at the Placing Price of 165 pence per Placing Share. The Placing Price represents a 5.7 per cent. discount to the closing middle market quotation price of a Share on 6 July 2017 of 175.0 pence per Share, being the last practicable date prior to this announcement. The Placing Shares represent approximately 45.8 per cent. of the Enlarged Share Capital.Â

PROACTIS Holdings Plc ("PROACTIS", the "Group" or the "Company"), the specialist spend management solution provider, today announces that it has conditionally agreed to acquire all of the outstanding membership interest in Perfect Commerce, LLC ("Perfect Commerce"), a global provider of spend management solutions with operations in the US, UK and Europe (the "Acquisition"), for an aggregate consideration of up to $132.5 million (approximately £102.4 million), together with an oversubscribed conditional placing to raise £70.0 million at 165 pence per Placing Share, through finnCap, acting as sole bookrunner to the Company for the Placing.

The Acquisition is consistent with PROACTIS' growth strategy, which is designed to deliver a business that is capable of addressing a growing global market demand for spend management solutions. Perfect Commerce develops and sells cloud-based, technology-led, spend management solutions for the public and private sector markets. It has complementary territorial reach with extensive international capabilities serving approximately 150 customers (largely Tier 1), with over 1.3 million users across more than 80 countries, 20 languages and 100 currencies. Further, Perfect Commerce operates its own proprietary supplier network that it calls 'The Business Network' and which has approximately 970,000 suppliers connected to it. Those suppliers are able to use The Business Network to collaborate with and transact efficiently and electronically with their customers.

Perfect was purchased via some HSBC bank debt, but largely via a share placing (£67m) at share price of 175, with convertible loan notes at share price of 175 with end date of 2022.

Looking at the share price now, it is mcap at £36m, against the purchase of perfect at £127m alone. Now how does that correspond with the current market cap.

Good luck with those price estimates if you looking to enter/top up again. The seller, who only has a certain amount to drop in to the market, has 40 as a base sell. Out of 34 delayed sells printed the last two days, only 2 were under 40 (35 and 37).

Look for the book to ease or a tr-1 for confirmation they are fully out. The book easing will be pre followed by a long NT at a fixed buy price.

March and April should be good months here irish. CPR, money from SNPC, licence and of course the fracking rig mobilizations and flows of TLP-103

Nothing so far irishmouse, that one I expect could drop any day without warning. So could more payments from SNPC or installment schedule etc.

We have engaged LR Senergy to work on the CPR and I am still expecting it in March; I will update everyone as soon as I know more.



Kind regards,

David Sefton
Executive Chairman

''During January and February 2019, the Group has experienced a lower level of retention and a deterioration of the pipeline in the Group's US and European operations. Accordingly, whilst trading in the Group's UK operations and the Esize Group are expected to remain robust, the Board now considers that it is unlikely that the Group as a whole will deliver significant growth for the remainder of the current financial year ending 31 July 2019.''

4 months to end of current financial year left - Accordingly, whilst trading in the Group's UK operations and the Esize Group are expected to remain robust,

Given growth warning for 2019, lets look at what the business is doing with no growth for this year.

Revenue for last 6 months was £27.7m, against £26.4m in the same comparable 2018 period. This shows that even with no growth the company is still revenue generating. Early stage performance of the Esize Group is paying off so far.

The 2018 revenue is put at £52.2m, therefore it looks like we should be similar to this in 2019. But given NAV for 2018 is £95.2m, which translates to a 101p share value. Then how can the current mcap be £40m, which is now a 60% discount to NAV of the company.

EV/EBITDA (x) is 9.1 for 2018 with estimates of 8.1 for 2019. But if 2019 has no growth, and is put back to 9.1, then again that is at a steep discount to the enterprise value the market closed at Friday. Removing the 11.6% EBITDA growth predicted for 2019, does not warrant the current company valuation reflected on the closing price last week.

We should look to be taking 2018 NAV and EV/EBITDA at the very least if growth is removed for 2018, we should at least be able to match 2018.

https://www.proactis.com/Proactis/media/Proactis/Investors/PHD_20181031_Regaining-its-stride.pdf

Trading update

The trading update for January 2019 half year reports EBITDA of £8.0m (1H18:
£8.5m) from revenue of £27.7m (£26.4m), with net debt of approximately £40m.
After the January departure of former CEO Hamp Wall, trading in the US &
Europe has been weak, meriting an in-depth review by new CEO Tim Sykes:
during January and February, retention levels were lower and the pipeline had
deteriorated. While there remains positive news in the agreement of a £20m
HSBC facility to support the delivery of the group’s APF solution, we review
forecasts to accommodate the absence of growth now expected in FY19. Target
price 200p (250p), equivalent to a 4.5% FY20 FCF yield.

?Proactis has revealed a reasonable first half, but concerns resulting from poor
pipeline and lower retention in Europe and the US. Total contract value won in the
period grew to £5.8m (1H18: £5.5m) including £1.0m from Esize, acquired in August,
which also contributed £1.0m of the £27.7m (£26.4m) for the period. As a result,
CEO Tim Sykes has initiated an in-depth review of US and European operations to
ensure the group’s resources are appropriately focused. The board will share the
results of the review in April at interims – in the meantime, we adjust forecasts to
indicate a flat 2H, including consequences in FY20.

?Positively, the group has also announced the securing of at £20m (non fee non
interest bearing until drawn) specific committed facility with HSBC to support delivery
of the APF, and is working with certain buyside customers as early adopters. We also
expect the imminent announcement of a new CFO, in addition to the NED
strengthening of the board

The existing business had a market cap in the £100m+ range last week. The growth for 2019 is now not in play, but the underlying business is still the same, good revenue and profitable. The board have been shaken up and declarations of intent have been made by directors immediately after the RNS. They purchased at 59 range, but probably would have taken stock higher. This is a divi paying stock, profitable and with a low float of shares in circulation.

There is only one reason the stock price is at 40 range, and that is significantly due to a institutional sell. The mcap dropped below the £100m threshold holding condition of the fund, and hence as per many other examples recently on the markets, they have sold and are exiting according to the fund managers order. They have no issue at what they sell for, but it looks like most of the big trades on Friday had a sell position at 40. Now they have limited stock, and once they are done and the sell order is completed, you will see the book ease and follow a buy intake lift.

I have been in many stocks that have been hit with a institutional sell, they follow the same pattern. The best opportunity to buy at the very best prices is on the back of their action. When they are gone the uplift bounce is hard and fast. Personally I see this settling around 60-80 by the end of next week, therefore I will be adding more Monday morning.

Done a total up of all delayed sells last two days.

Total delayed sells come to 7,242,869. That is a plus or minus of say 300k either way.

Major holders:

Artemis 14,054,662

Rodney Potts 8,995,427

Liontrust 9,811,364

Fidelity? around 7m

GVQ (Strategic) 6,729,954

Didner 4,963,509

So if the if it is not Artmis selling, the institution is either now out or only a million or two to sell left (if top two, not including Artemis)

If it is Artemis, then they are half way through selling, and another two to three days max left. It has only taken two days to shift 7.2m odd.

Should see a holding RNS next week whoever it is above.

Clear road ahead after they have finished, or perhaps they already have.

Anyone here know more about one of our major shareholders - Fidelity international

On our website they own 7.61% of the company, but I cannot find a TR-1 for them.

Wonder if some know this is a dividend paying stock:

Dividend policy

Subject to approval at the General Meeting of Shareholders to be held on 19 December 2018 and subject to the Company having sufficient distributable reserves at the time, a final dividend of 1.5p (2017: 1.4p) per ordinary share is proposed and will be paid on 22 January 2019 to shareholders on the register at 28 December 2018. The corresponding ex-dividend date is 27 December 2018. The Board considers, based on its budgets and forecasts, that the level of distributable reserves at the proposed date of payment of the proposed dividend will be adequate.

Yep, could see a tr-1 even on Monday if the sellers gets done today.

It means there is a sell order at 37, being flipped to buyers at 38. Will show later, as they have done a few delayed sells today.

4 v 1 book looks better, with tight spread at 37.9 v 38