Paragon Entertainment Share Discussion Threads

[themadstork] 10/11/2016 11:09

I bought more yesterday and will continue to add on any further weakness.

[interceptor2] 10/11/2016 10:21

Agree that the recent trading update is the most significant that have ever released, and refreshing to see guideline figures for revenue and EBITDA included.

Even if I add back exceptionals to the EBITDA figure of £1.0m, I worked out that PEL would still achieve a clean PBT figure of £0.615m which would give an EPS figure of 0.328p and puts PEL on a PER of only 7.3 at 2.40p.

Adjusted EPS would be 0.533p giving a PER figure of 4.5.

Thats a good starting valuation for a company with a new dynamic CEO at the helm.

I did have another top up today.

[pj 1] 09/11/2016 08:04

LOL I think Mr Trump wants a better buy in price!

[csmwssk12hu] 09/11/2016 00:08

Looks like it's about to do next leg up from that graph imho dyor

[pj 1] 08/11/2016 11:26

Yes I agree cfro. It seems we still have some PI's who are either bored or who have decided to chase another hot money stock when IMO, in reality, the recent trading update is the biggest buy catalyst the Co. has ever given to date.

Whilst it is in a very wide range perhaps it's worth nothing that when the above article was written the Market cap was £2.6m versus £4.6m today. So far a +68% call from Sharesmag.

Following the strategy change after Merry Hill I note all reports are of Design and Build, which is their strength, but lets not forget the licensing division which the Co seem to stress had little or no effect on Turnover from last Results.

[cfro] 08/11/2016 11:02

Thanks for the excellent research article PJ1. :-)

We need a nice strong catalyst now that will power the share price out of this very wide (and silly) trading range.

[pj 1] 08/11/2016 08:11

I'm sure Sharesmag will in due course, although it doesnt appear to be a publication which moves share prices short term such as SCSW or IC.

Copy of last June's full page article for those who may not have seen it
=================================================================================

Paragon’s Middle East dream
Museum designer swings to profit as turnaround gathers pace

23 June 2016|Small Caps Issue: 23 Jun 2016 - Page 35
The share price slump at visitor attraction designer Paragon Entertainment (PEL:AIM) could start to reverse this year as the £2.6 million cap takes advantage of the growing Middle Eastern market.

The stock has suffered a torrid 12 months, falling 20% to 1.4p after it reported widening losses and a breach of its banking covenant in June 2015, followed by a profit warning in October on the back of unexpected project delays.

PARAGON ENTERTAINMENT - Comparison Line Chart (Rebased to first)

Full year results (14 June 2016) show Paragon managed to grow revenue by 10% to £8.5 million and swing to a pre-tax profit of £346,000 in 2015. This is despite losing £600,000 at the EBITDA (earnings before interest, tax, depreciation and amortisation) level from a contentious contract, which has now been resolved.

The group, whose work includes the Wallace and Gromit Ride at Blackpool Pleasure Beach, has sold its loss-making mall attraction in Birmingham and renewed its banking facilities after trading in compliance with its covenants.

Paragon earned £1.1 million in revenue from repeat business in 2015, but expects this to rise to £9 million in 2016. It says that around 82% of its turnover this year will be repeat business, suggesting full year revenue will be around £11 million – a year-on-year increase of 29.4%.

The proportion of revenue that Paragon gets from the Middle East is expected to grow from 35% to 70% this year. This will help the group weather subdued trading in the UK.

Current projects in the Middle East include activities associated with the Kung Fu Panda, Madagascar, Little Explorers and Magic Planet brands.

(Click on chart to enlarge)

Small caps pie

Paragon says there is growth potential in retail, theme parks and science centres worldwide. ‘We have worked hard over the last 18 months developing these markets and our shift in geographical and market spread reflects the effort we have invested as well as the more global nature of our business,’ says chief executive Mark Pyrah.

Paragon recently signed an agreement with H2E in Latvia to grow and explore the Eastern European markets and with Lefunland in China to expand its presence in the Far East.

‘Paragon Entertainment is playing to its design and build strengths in international markets in a sector it believes is worth £1-2 billion annually, so clearly capable of providing room for growth from current levels,’ says FinnCap analyst Duncan Hall.



At 1.4p Paragon offers turnaround potential.

SWOT ANALYSIS

STRENGTHS

• Five-year agreement with Hamleys

• Geographically diverse

• High proportion of repeat business

WEAKNESSES

• UK margin squeezed

• Carries £200,000 of net debt

• Turbulent history

OPPORTUNITIES

• Strong Middle East market

• Grow repeat business

• Capitalise on Hamleys agreement

THREATS

• Contract delays

• Economic downturn

• Further lending issues

[csmwssk12hu] 08/11/2016 00:15

I'm sure they will soon

[csmwssk12hu] 06/11/2016 00:32

Very good set of figures imho

[qs99] 02/11/2016 13:53

looks oddly priced IMO...be interesting to see if any of the usual mags pick this up and what they say

[cfro] 02/11/2016 13:25

Added to my holding on todays director buying news.

[themadstork] 02/11/2016 13:19

All the directors here have bought large amounts of shares on the open market. About £320k worth in the last year.

[themadstork] 02/11/2016 12:19

Agreed. Suspect the general market nervousness this week didn't help, but I am confident that this will move a lot higher over the short/med term.

[1savvyinvestor] 02/11/2016 12:13

The buy is a very curious number. Maybe a signal that more director purchases on the way. They are personally very heavily invested and must be a bit perplexed by the muted response to the RNS yesterday which was stunningly good. Add in the prospects for 2017 and this is a true value growth share. Still cheap and worth buying. I'm not selling a penny.

[phowdo] 02/11/2016 11:56

> 78,654 shares at a price of 0.0252 pence per Ordinary Share

Wish I could get some at that price!

[interceptor2] 02/11/2016 11:41

Mark Pyrah Development Director buys 78,654 shares at 2.52p, now holds 12%

Founder of PEL Mark Pyrah was acting CEO until John Dobson was recruited as COO in May 2016 and then promoted to CEO in September 2016, Mark Pyrah then reverted to his area of expertise in Technical Development. The share purchase shows he is fully engaged and positive about prospects here.

I believe that the catalyst here is CEO John Dobson, he seems very experienced and dynamic, yesterday's trading update should mark an important turning juncture in the prospects for this company.

[1savvyinvestor] 02/11/2016 08:00

Paragon looking for new creative employee. Paragon Creative Ltd York has a vacancy for a technical draftsman/designer to join our busy production facility in York. Major national and international projects currently being undertaken.Also hamley expansion in china in 2017https://insideretail.asia/2016/10/04/hamleys-china-flagship-opens-in-nanjing/

[csmwssk12hu] 02/11/2016 00:48

Another rise today?

[pj 1] 01/11/2016 16:43

Hi cfro, nice to see you here!

BB sold out a while ago, Im pretty sure he hasn't bought back in.

[csmwssk12hu] 01/11/2016 16:30

I would rather they rose 25% today than 100% as they would only fall straight back down, I would not be surprised if had a few days at 20% plus rises then some consolidation

[cfro] 01/11/2016 16:11

Hi PJ1,

I have bought in today after the strong trading update. Only a small holding though to start with until my research is completed and i can build some confidence.

I know that this has been a serial disappointer in the past but i would hope that a new trajectory has been forged and the company is back on a growth path.

Is battlebus still invested here btw?

[fft] 01/11/2016 14:51

The RNS confirms the directors confident buying a couple of months ago.

[pj 1] 01/11/2016 14:24

Hi rhomboid

As we know, and as you and dailylarma refer, we all know the dangers of EBITDA isolation reporting. The issue had been raised at a number of AGM's including the last and IMO was taken on board by the BoD. where eps and/or operating profit (and subsequent cashflows)should be reported. I know they have been working very hard on Investor communications very recently and have no doubt of change on that front in future.

As well as increased working capital with the growth they have also moved (some)units and no doubt incurred Capex for new machinery,(I assumed purchased not leased).

I'm trying not to look through rose tainted spectacles and have no idea of the current debt, only that overdraft with HSBC were recently renewed on the same terms.

edit-PEL have historically had a lack of visibility which is improving with the growing order book supported by the Chairmans comments. Will that make forecasting eps etc etc easier