Paragon Entertainment Share Discussion Threads

[playful] 07/9/2016 00:06

Anywhere you have a military coup you’ll see PEL popping up, not frightened of anything.

The new guy really is showing support but it’s also looking like a concert party and over 30% too ....

I might be wrong and no doubt PJ will research and correct me but I thought directors are presumed to be acting in concert where the company has authority for a share buyback. This presumption of concertedness arises from the time the directors resolve to seek shareholder authority for the buy back.

A director is unable to purchase shares when he is part of a concert party which holds 30%

PEL directors currently hold 30.8%

[janeann] 06/9/2016 18:43

well if it were Iceland or Australia (or even UK and Germany) id be a lot happier; they do like these high risk unstable countries!

But it all seems positive and certainly the director buy is encouraging.

[pj 1] 06/9/2016 17:53

Well, another £40k ish for JD, that's circa £200k he is beneficially in for as a quick calculation. And the general market has hardly mentioned it.

Another representation agreement announced yesterday, certainly expanding their reach. Not sure how janeanne feels about it though?

[cheshire man] 05/9/2016 14:40

A tick in the box :-)

[playful] 01/9/2016 15:45

Certainly not an attraction more a provider of bespoke made to measure tanks in designer type units, you get the idea from this site

Simply throw up a website and test the market they have the resources in-house and the risk/reward is attractive and may add value to their more mainstream projects.

[pj 1] 01/9/2016 11:07

playful- as a manufacturer and supplier?. Any attractions seemed very much on the back burner to say the least at the AGM.

[pj 1] 01/9/2016 08:46

I think the Chairman had an extremely acidic encounter with his last Aquarium venture.

Apparently he learned quite quickly not to go swimming in a newly constructed and filled Tank. Especially whilst construction workers are still on site with a lack of nearby toilet facilities.

Hopefully he overcame this wee set back

[playful] 31/8/2016 23:21

Perhaps they should start a division focused on providing high value aquariums and leverage the Chairman’s knowledge in this field, it may possibly be a worthwhile endeavor….

[pj 1] 30/8/2016 15:43

Q&A response to the Director remuneration AGM comments. It also looks as if they are generally within the Remuneration guidelines issued from Sharesoc




A round up of several questions concerning remuneration
30 August 2016

Q1. “Please explain the changes in salaries for executive directors (Mark Pyrah, Pete Holdsworth and Mark Taylor) from 2011 to the present?”

A. When the company was listed in 2011, executive directors undertook to earn discounted salaries until certain targets relating to the roll-out of attractions were reached. The 3 executive directors earned, in aggregate, £231k per annum until 2014 when the attractions strategy was abandoned. At this time, the remuneration committee decided to grant a 10% increase and further created a further cash bonus scheme. This increase took the aggregate salaries to £255k per annum and there have been no increases in these annual salaries since then.

In retrospect, the Board did not communicate the 2014 increase in salaries to shareholders adequately.

By way of background, in November and December 2014, the executive directors waived £42k of salaries to support the business at the time of the profit warning and breach of bank convenant. This waiver was effectively repaid in 2016 when the remuneration committee chairman awarded a discretionary bonus of £42k to the executive directors. There is a typo in the Directors’ Emoluments note in the Report of the Remuneration Committee in the Annual Report 2015 showing that the bonuses were paid in 2015 when this should have read that the bonuses were actually paid in “2016”. Nevertheless, the income statement for 2015 reflects the salaries correctly and the bonuses will only be reflected in the income statement of 2016, so the annual report is correct in all respects, except for the typo in the note.

Q2. “Please explain the changes to the Management Participation Scheme for executive directors (Mark Pyrah, Pete Holdsworth and Mark Taylor) which were announced on 22 June 2016?”

A. The Management Participation Scheme was created in 2011 and is structured through a subsidiary company, Paragon Entertainment Investments Limited. In summary, it provides for executive directors to participate in 10% of gain in PEL’s shares above 4p per share (ie the share price at which the shares were admitted in 2011), provided that the growth rate in share price is over 12.5%:

At 12.5%, the share price needs to be 7.2p by December 2016 when the initial 5 year term expires.
The scheme is therefore underwater and is neither an incentive nor a retention tool.
The new amendments comprise the following:
The base share price target (ie the strike price) of 4p is unchanged.
The scheme is extended by 5 years to December 2021.
The hurdle rate is reduced from 12.5% to 5% from inception.
The company must have achieved a minimum rolling 12 month EBITDA of £800k at the time of exercising the option.
The amendments therefore require that the share price target must be 6.5p by the end of 2021 for the executive directors to be permitted to exercise their options. By comparison, at 12.5%, the target share price would have to have been 13p. Note that, at the time of announcing the amendments to the Scheme, the share price was 1.40p.
The management EMI scheme for non-directors will be amended to achieve substantially similar economics so that the entire management team is aligned with shareholders.

Q3. “What governance process did you follow for these remuneration changes?”

A. In case of both the salary increase and the management participation scheme, before seeking the changes, we, as executive directors, asked ourselves if we felt that we were being fair to the company and its stakeholders. Being satisfied with this, we consulted extensively with both our NOMAD and Paragon’s biggest institutional shareholder, and we sought their advice and approval before proceeding. We did some benchmarking against other AIM companies and at the current levels of remuneration, remuneration is fair and in line with other AIM companies. Finally, based on this information, the independent non-executive director of PEL made the final decisions and the executive directors abstained from voting.

In respect of the management participation scheme, we also sought an independent option valuation from a firm of professional advisors which confirmed that the benefit conferred on the executive directors was minimal. The directors will pay tax on this benefit.

The consequence of the various changes is that the executive directors are each paid a modest but reasonable salary, they have the benefit of a discretionary bonus based on performance, and they are well incentivised to grow the share price through the management participation scheme.

We hope that by now we have built up a body of useful Q&A responses to help you think about our business. If we haven’t covered everything that interests you, please continue to engage us by emailing your questions to us at [e-mail].

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[pj 1] 18/8/2016 13:19

Resistance now showing at 2.5 on the offer,for those with no L2, first time any has shown for some time. Could be really interesting if/when that goes.

[pj 1] 18/8/2016 13:16

Yes CM. And if you look at his beneficial interest then it is approx (via guesswork) £40k more than the recent direct declarations, so he (and family?) are going in big here. All since appointment to PEL

[cheshire man] 18/8/2016 11:47

John Dobson seems keen :-)

[1savvyinvestor] 17/8/2016 12:26

Mad stork - you have made me a lot of money on paper...

[themadstork] 17/8/2016 12:11

Indeed. Well done to those that kept the faith.

I have been buying back, but have nowhere near my peak holding from last year, unfortunately!

[luckyphilip] 17/8/2016 11:45

What a great rise . Loving it!

[pj 1] 17/8/2016 10:12

John Dobson COO buys £100k worth. Confidence building here?

[janeann] 16/8/2016 15:54

Hope so PJ - I haven't got to break even yet!

[pj 1] 16/8/2016 15:16

LOL janeanne. Hopefully much more to go with strengthening margins and order book with an increased internal capacity!

[janeann] 16/8/2016 14:48

No - your bottom fishing is being rewarded!

[pj 1] 16/8/2016 14:34

Are my eyes deceiving me? Certainly some buying pressure recently

[1savvyinvestor] 03/8/2016 07:52

Unusually the rule of not topping up when a share price drops has been wrong in the instance. I'm now sitting on a very nice profit from doing what everyone tells you not to do . Averaging down . I didn't think the price down around 1.3 was justified and kept mopping up on weakness . Very well rewarded now on paper . Sold a bit at 1.7 on way up to de-risk but happy to still have a very large holding

[janeann] 02/8/2016 17:30

Well done PJ - John Dobson read your report and realised what an excellent company he worked for and promptly bought some shares!!
Nice late trade at 2.1 of 400k as well.

I thought about adding at lower levels - clearly should have done. Break even soon!!

[pj 1] 02/8/2016 16:30

It is always extremely pleasing and gratifying when One's AGM Report has the desired effect! LOL

[phowdo] 02/8/2016 13:18

Good to see the COO buying £20k worth.