Park Group Share Discussion Threads

[taylor20] 09/7/2008 13:51

Close enough to the 11p target, bought a handful for a short term bounce.

Notice Hardman seem even more convinced of the story here:



Park Group
Cash Rich, Growing, And Yielding 9.6% 13.5p 1.7.2008

We re-iterate our positive view of Christmas Savings and Corporate Voucher specialist. This is possibly the most interesting share in the financial sector, and possibly also one of the safest.
Unlike some so-called 'banks' that were once many hundreds of times its size:
• Park Group has not cut its dividend – in fact we believe that the dividend will be increased in each of the next two years. It has never dreamt of stooping so low as to pay a dividend in shares only.
• Park Group has not had to write down any assets.
• Park Group has not had to come running to investors, the Bank of England or the Government for financial help. A Rights Issue is out of the question. A capital repayment is actually more likely, as this company's massive cash generation builds up surplus capital in 2009 and 2010.

Our estimate for y/e March 2009 is top of the range, and we are comfortable with it. If interest rates average 5.5% or above over the peak cash months of July – November we shall be upgrading. This year, 47% of profits will come from interest income.
For y/e March 2010, there is potential upside beyond our forecast because a) we have assumed average base rates of only 4.75% and b) we have assumed EBIT margins of only 1.47%, compared to the 2.2% earned in Park Group's last 'normal' year, to March 2007.
Park Group is the only company in the financial sector that can honestly say it has no problems currently. We expect 17% revenue growth this year, 10% the year after. And the yield is a truly exceptional prospective 9.6%.

[a1samu] 08/5/2008 17:21

Appointment of John Andrew Dembitz
As someone said "he bullies us to make more money, does not give us business or make life easy, he just likes accountants and making the business as lean as possible."

[taylor20] 27/11/2007 12:35

11p would be a nice point to pick up some shares.

Directors salaries did not actually rise much last year, it was the 'performance related' bonuses that raised the overall wage bill.

PJ gets over £1m in dividends each year so a £30k fluctuation in his pay packet probably doesn't bother him! For that reason alone I doubt the dividend will be cut significantly.

Will be reading the interims with interest - only yielding 7% at the moment - better yields elsewhere at the moment.
---
Am I right in thinking these are still ISA'able due to the Plus listing? (Recognised exchange and all that)

[a1samu] 20/9/2007 07:44

Yesterday the share price reduced another 3.9% or .75p to 18.5 -19p.
.
Now down to 18-19p.

The 11p share price is inevitable.

[a1samu] 11/9/2007 11:18

Share price drop of .75p or 3.6% in the morning, today.

Market is not looking for good news at the AGM.

Combined AGM/EGM on the 25 September 2007.

Prospects per Annual Report & Accounts 2007, dated 3 August 2007:

"Orders overall are currently 30.6% below the same time last year.

. . customer numbers are 36.4% below last year.

. . appeal of our Xmas savings proposition remains strong and we are confident
that this will lead to a recovery in customer numbers and order amounts for Xmas 2008 and beyond.

. . We anticipate a significant reduction in profits in cash savings for 2007/8. . .

-11p share is in sight, with dividend eliminated when the interims will be announced on Friday the 7th December 2007.

The only gainers out of these shares are the directors, whose wages are relentlesly going up.

[jeff h] 30/6/2007 21:17

Disappointingly trade has not improved. Xmas 2007 orders 27% down in the
28th March Trading Update and 31% down as of last week per the results
announcement.

Peter Johnson seems confident things will pick up for 2008, but for now
I'm out.

[jeff h] 26/6/2007 23:23

Results tomorrow, I bought some more recently...hopefully the effect of the
Farepak debacle has started to fade.

The Voucher business seems to be going well, the div looks certain to be
hiked 10% or so, and I'm looking to hear good news about a land disposal.

[a1samu] 22/1/2007 16:33

In the interim statement it was said that copies of the interim accounts will be sent out today on the 22 January 2007.

Is the price rise of 1.5p today a coincidece?

The announcement today, the 22 January 2007 by Schroders of a holding in the company was already reported in the 2006 Annual Report & Accounts, page 16 Schroder Investment Management Limited No of shares 15,950,00 or 9.69%.

[taylor20] 22/1/2007 13:54

Bought a few this morning (on Plus). Was hoping for a lower entry point, but something seems to be brewing, small overhang cleared?

[jeff h] 28/12/2006 11:40

Hardmans latest forecast:-

Y/E 31/3/07 Pre Tax £4.99m EPS 2.13p Div 1.2p
Y/E 31/3/08 Pre Tax £6.00m EPS 2.47p Div 1.4p

[taylor20] 21/10/2006 15:42

Sentiment for this sector must be at an all time low.

Recent liquidations:

Family (FHSC group)
Choice Vouchers
(Farepak) European Home Retail

Debatable whether this is good news for PKG or a sign of things to come!

Pretty certain I don't understand the company accounts but some key points:

The company made an exceptional loss of over £17m last year.

Continuing operations only made £1.6m, so only 1p EPS & a PE of 19, the yield is impressive, but is not covered by profits (£1.8m dividend vs £1.6m profits).

Seems to have £10m in cash, but over £35m in liabilities.

If Imagine Finance loss really is a one off, then continuing operations look reasonable rosey, ignoring the liabilities issue, think I'll hold fire for the moment.

[a1samu] 06/10/2006 09:01

Park-a serial loser
The comments made in the first four paragraphs of the AGM Statement dated 27.9.6, are similar to sentiments repeated again and again over the yeats. Instead of sentiments like "well placed for the future", doubling of dividends year on year, would be real progress.
It says cash flow is impressive at £120M. This cash does not belong to the co. but is held on behalf of clients and is paid out to supplies at the end of the year, less profits and interest earned. In the past this cash was not even shown in the B/S of the co. and makes no difference to the ratings the market is awarding to Park. Cash held like this has never benefited shareholders, because all of the profits and interest earned from it has been wasted on futile and unsuccessful ventures.
The statement again talks about the corporate voucher business increasing t/o, but no statistics on the losses incurred in this activity is given. Imagine Finance continues to be a millstone and the statement could be taken as a profits warning. This activity is still eating up profits and there is nothing successful about it.
Clearly major shareholders are concerned about transparency and raised objectiosn to transfer to the AIM. There are fears in the air about the corporate governance at this company. To save a few pounds on AIM transfer & to continue heamorraging cash is difficult to comprehend in any event.

[jeff h] 10/9/2006 17:31

blimey..you got a right downer on this stock.

I've looked at the -ve's but think the +ve's outweigh them which is why I've invested.

Which analyst 'called the shares 11p on a one year view'...have you any more
details?

The latest forecast I've got is from Shore Capital (14/7/06) :-

Y/E 31/3/07 Pre Tax £3.5m EPS 1.5p Div 1.1p
Y/E 31/3/08 Pre Tax £6.5m EPS 2.7p Div 1.4p

....11p would be a forward P/E of 4

[a1samu] 10/9/2006 12:06

Park - serial loser
The market is clearly taking a negative view of this company.
Though the share price perked up a bit on the announcement of the disposal of the cash lending business, since then, the shareprice is drifting back to near all time lows.
This is not how a share would behave in anticipation of terrific prospects, substantial earnings and massive dividend payouts. None of these is on the horizon, but much the same as for the last 9-10 years. There are now, again, enough skeletons left in the cupboard to be able to continue with the disposals of loss-makers, like: 1. High Street Gift Vouchers, t/o of £61.2M as per accounts of 2006, page 4, but nowhere is the profit/loss shown seperately, anticipated running at a loss, 2. Park Travel, nowhere is any statistics given on this activity, anticipated running at a loss, 3.Imagine Finance and Park Direct Insurance, incurring losses of £2.9M as per 2006 accounts, page 9, not to mention pension liability as shown on page 49 of the 2006 accounts of £1.815M, not a small amount when compared to the MC of the whole co.
This company makes an interest profit, just from the moneys deposited with it by the hampers customers, near £2M in 2005 & 2006, each year and if it did nothing else, it would show at least this consistently as profit each year, but the mindset is different. The mindset is unlikely to change soon or in the near future and the market understands this and values the company accordingly.
An analyst called the shares 11p on a one year view on the 6 September 2006.

[jeff h] 09/9/2006 10:31

So you've got a pessimistic view of Johnson's intentions...only time will tell if you are correct or not.

A few months ago I bought into a company with a Director controlling a bigger stake than Peter Johnson - Andrews Sykes (ASY) and I've done very well out of it so far, with more to come I reckon.

One of the attractions of Park to me was the potential to act in the same way as Sykes....the company has a tender offer above the market price and uses its spare cash to buy in a chunk of the company which benefits all shareholders.

You may take this as being optimistic - and maybe it will prove so but we'll have to wait and see how things develop.

[a1samu] 09/9/2006 09:17

Park - a serial loser
Park is holding an EGM on the 27 September to ratify the decision to move to the AIM market, quoting one of the benefits as "recurring savings will be made by the Company in its ongoing costs of administration and in effecting corporate transactions". It also says "There is no requirement for a min. number of shares to be maintained in public hands, whereas on the Official List a minimum of 25% of a company's issued ordinary share capital should be maintained in public hand at all times."
It concludes by saying that the Directors have a combined holding of 67.5% of the shares. The 2006 accounts show P Johnson holding 57.53%, BWSIPP 9.81% £ The Johnson Fundation 6.33%, both controlled by Mr Johnson, a total of 73.67%, with the only large institutional holder being reported in the accounts, Schroder with 9.63%. This leaves little for small shareholders. Mr Johnson controlled 106,161,926 in 1999 and he now controls 121,199,711 shares of the total of 164,531,046 in issue at 31.3.6. The small shareholders are consistently squeezed out. As Mr Johnson controls more and more of the shares, it will not be a matter of rating the company on performance, but on a devalued basis, because there is no effective market for the shares, with only one buyer. This has happened before, when Eaglet Trust sold out to Mr Johnson 5,550,000 shares at 7.5p, at half the market price, in 2001.

[jeff h] 08/9/2006 18:05

a1samu - as I've said I agree the diversification schemes have been very disappointing but I'm a new shareholder and although I'm aware of some of the
past, it's the future I'm more interested in....and that hopefully is concentrating on the cash savings side.

The 'possible launch into international markets' I believe refers to selling hampers in Spain as reported in the FT a few months ago..so selling an existing product in new markets rather than the riskier set up of an unrelated business.

Imagine Finance losses are a concern but I go back to the Cash Savings business which has consistently increased sales and profits (£5.4m last year) with indications of increased profits again this year.

As for the dividend, why should it be cut?...a loss maker has been eliminated, the main Cash Savings business is doing well, cash balances are rising and £1.5m+ was received shortly after the year end for a property disposal with another potential disposal to come...all this suggests any movement in the dividend level would be upward rather than downward...unless of course they throw cash at new ventures which as you point out has been a problem of the past.

[a1samu] 08/9/2006 13:59

This company is not run for shareholders.

If a chief executive would have this sort of record in a fully functioning quoted company, destroyng value over years and so consistently, he would have been replaced a long time ago.

The few shareholders that are still with this company are poorly rewarded when compared with the increased returns paid to the CE and his directors.
The dividend income has not gone anywhere for the last three years.

Dividends were paid in the sums of .75p in 2003 1p in 2004 1.1p in 2005 & 2006 and it is likely that after such massive losses being booked in 2006 that it will not increase in the current year at best, but will be eliminated alltogether.

[a1samu] 08/9/2006 13:42

On page 11 under operational review the company says:

"OUR NEW BUSINESS DEVELOPMENT TEAM IS CURRENTLY WORKING ON A NUMBER OF NEW AND EXCITING PROJECTS INCLUDING A POSSIBLE LAUNCH INTO INTERNATIONAL MARKETS AND GREATER USE OF NEW TECHNOLOGY, ALL OF WHICH WE BELIEVE BODES WELL FOR THE FUTURE."

Over the last years the sentiment of "boding well for the future" has been continuously repeated, and yet the company managed under the leadership of the majority shareholder with over 70% of the shares, Mr Peter Johnson, over nine years to fritter away over £30M, the value of the market capitalisation of the whole of the company and I fear that this trend is continuous.

Imagine what would be, if all of these false attempts resulting in this massive haemorrhage of cash would have been paid out in dividends to shareholders over these years.

[jeff h] 08/9/2006 12:02

Yes, managements attempts at diversifying and finding new income streams from the cash generated by the cash savings business have been disappointing.

In hindsight a case of 'stick to the knitting'.

However the main Cash Savings business has continued to grow and it's this what attracts me to this stock.

[a1samu] 08/9/2006 08:27

Park - a serial loser.

The record from the annual accounts for the last 9 years reads as:

Loss on discontinued operations

Year ----------------Miliions

1998-----------------£2.312
1999------------------2.217
2000-------------------.027
2001------------------1.380
2002-------------------.263
2003-------------------.731
2004------------------2.803
2005------------------3.647
2006-----------------19.141

[jeff h] 24/8/2006 08:29

Hopefully Park can take advantage of EHR (Farepak etc) being suspended
and gain market share.

[knitcraft] 14/7/2006 11:26

No one interested here......chance to get in at the beginning...

Market seems to be looking for stock in a low key way.
Bidding up without any sign of a buyer on trades reported.
Looks a very good bet to me, little downside risk and possible 50%
gain as any bid would have to be close to 30p.

[knitcraft] 13/7/2006 10:59

50000 buy gone through.
This seems a no brainer for at least a rise to 25p PDQ.

[knitcraft] 12/7/2006 15:56

At last announcement Chairman held 74% of shares.This implies only 43 million free stock about.
Only cost him £12 mill to buy up rest at 30p.

Must be a good punt at 20p ish with dividend to come soon.

Anyone else interested !!!!!