Share Name Share Symbol Market Type Share ISIN Share Description
Petards LSE:PEG London Ordinary Share GB00B4YL8F73 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 18.375p 17.75p 19.00p 18.375p 18.375p 18.375p 23,683 07:54:16
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 13.1 0.8 2.2 8.4 6.53

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Date Time Title Posts
20/10/201617:52Petard's Group - The Long Story494
10/9/201500:11Petards...winning lots of contracts 2013-2014735
21/1/201513:04Petards Group - The Long Story-
21/8/201417:23Petards is this the new PEG ? Shareholders look !52
18/12/201311:38*** Petards Plc ***2,528

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Petards Daily Update: Petards is listed in the Support Services sector of the London Stock Exchange with ticker PEG. The last closing price for Petards was 18.38p.
Petards has a 4 week average price of 17.41p and a 12 week average price of 16.68p.
The 1 year high share price is 20.25p while the 1 year low share price is currently 12p.
There are currently 35,544,389 shares in issue and the average daily traded volume is 84,863 shares. The market capitalisation of Petards is £6,531,281.48.
crazycoops: I think this is a share you have to buy and hold on a 6-12 month view or even longer. The share price will drift on no news and will not really ignite until results show that the EPS is rising, the company starts paying a divi etc. Between now and then, more contract wins might produce the odd rise but my strategy is to buy the dips and build a decent stake. Patience is key here.
rivaldo: Good to see 20p in the rear view mirror now. I agree barnetpeter, given likely EPS upgrades imo for next year (Hybridan are already at 2.1p EPS) I'd hope for a 30p+ share price at some point.
noujay: Must say this firm looks to have been completely revamped since the takeover with trading, and by extension the share price, is now really starting to reflect that progress.All good solid stuff. A few more contracts and no reason why this won't re-rate substantially.
rivaldo: Wow - a £6m contract win is more than PEG's m/cap! The added visibility to revenues for both 2017 and 2018 is really encouraging. We should see further broker forecast upgrades, and this should initiate new levels for the share price.
rivaldo: Two buys today totalling 78k shares, and the share price moved up on each of them. Good to see :o))
rivaldo: Extracts from WHI's note this morning FYI: "Petards Interims – another period of sustained progress Petards supplies advanced security and surveillance systems to the Transport, Defence and Emergency Services markets. H1 2016A results demonstrated another solid performance, with revenue ahead by 22.2% and PBT by 33.4%. Whilst the order book fell by 25% in the six months to 30 June, in excess of £4m in new orders have since been received. With the order book currently standing at £13.5m, visibility for the current financial year remains robust, with a good pipeline of opportunities continuing to be presented. On the back of the results, we leave our revenue and PBT forecasts unchanged, whilst we increase our capex assumption to take account of investment being made. We maintain our Buy recommendation and raise our 12-month share price target to 22p (from 20p), equating to a PER of 12x." "We raise our share price target to 22p Based on our forecasts, the shares currently trade on a FY 2016E fully diluted PER of 9.8x and EV/EBITDA of 3.5x. Given the level of secured work, in addition to the pipeline of opportunities ahead, we believe that these multiples continue to undervalue the business. Following these results, we raise our share price target to 22p, still a c.20% discount to the sector PER multiple."
barnetpeter: Yes and there will be until the water hall convert stock is gone. That wont be til 2018 and remember the conversion price is just 8 pence. I cannot think there is much left though with this now above 15p. Just converting some I had with one broker but will keep the main amount I have with another. It pays 7 per cent but of course the 100% profit plus is tempting with the PEG price heading for 20p for 150%.
the oak tree: Am afraid I don't know too much about PEGs past as wasn't around back then but looking at the numbers it certainly must have really disappointed many back in 2012/2013. I suspect thats why we are on such a low valuation as once bitten, twice shy as they say. The market hates to be disappointed. But that is now quite some time ago and its perfomed well and certainly has reasonable forceast number. One thing its never seamed to have done (I'm only going back to 2010 as using Stockopedia) is how little money it actually made even in the years it sold well. e.g. in 2011 it sold £12.1m but had a net profit of only £0.32m Thats looking like changing with a forecast net profit in 2016E of £0.9m and 2017E £1.01m. Back in 2012 it achieved a share price of 31p before it all went pear shaped. One thing I do like is the regular contract sales we are getting told about that PEG wins. Just get the impression they are winning these quite easy now. And that tends to mean the later contracts will have some decent margin in them rather than it's a company trying to win business with a new untested product. Just a hunch ofcourse but have seen this played out before. Its true they haven't changed their forecast numbers with recent contract wins but perhaps thats just taking a conservative approach given they disappointed so badly 3/4 years ago? Be keen to hear what has changed since 2012? New people / products etc? Happy holder at the moment.....
rivaldo: I'm glad they didn't - then PEG will be able to say that they'll be beating expectations. On current year 1.9p EPS forecasts PEG remain very undervalued - even to get to a double-digit P/E from here gives 33% upside to a 19p share price.
effortless cool: [With apologies for the greengrocer's apostrophe in the thread title]! Petards Group’s (PEG) principal activities are, to use its own words: “the development, supply and maintenance of technologies used in advanced security, surveillance and ruggedized electronic applications”. For the most part, this seems to mean CCTV on trains and surveillance equipment for the defence industry. It is a small company – current market cap about £4.1m at 11.75p per share, although its share price has achieved more than twice the current level as recently as 2013. Revenues peaked at £12.1 in 2011 and then fell away dramatically in 2012 (£9.1m) and 2013 (£6.3m), with the company falling into loss for 2013 H1. This triggered corporate action in the second half of 2013, when major shareholder Water Hall carried out a reverse takeover. Since then, revenue has recovered, with 2014 H1 revenue of £7.2m being the highest for any half year during the period I have reviewed (back to 2010 H1). Although some gross margin has been sacrificed to achieve this revenue growth it has not stopped the company moving back into profit, with comprehensive income of £273k for the first half, giving a half year EPS of 0.79p. Valuing this company is tricky; some of the reasons for this are listed below. - It is not clear whether the revenue growth trend is sustainable. The latest trading update (12 Jan 2015) indicating it may be flagging, with full year revenues “slightly lower than anticipated” and the order book ”in the region of £20m”, as opposed to “in excess of £20m” at the half year. For my projections, I have assumed growth of a only a few percent each half year for now. - Gross margin was around the 40% level for every half year through to 2013 H2. For 2014 H1, however, it fell to 27.4%. The half year results put this down to “the SMRE contract” (defence related) and “some of the one-off rail engineering services which were competitively priced in order to gain market position for potential future equipment orders from those customers”. It remains to be seen whether the margin given up can be recovered in practice, so I have assumed 30% in my projections until I see some evidence that it can be. - The balance sheet is strong, with net current assets of £1.8m and cash of £1.5m. However, there is a £1.5m liability in respect of convertible loan notes that may be converted to shares at 8p and mature in September 2018. The scale of these convertibles, relative to market cap, along with a plethora of options, mean these must be taken into account in any valuation. My projections show revenues of £14.6m for 2014, rising to £15.2m for 2015, generating profits of £609k and £663k, respectively. The company also throws off cash over this period, with cash of £3.6m at the end of 2015. I tend to value companies based on earnings for the next two half years, i.e. 2014 H2 and 2015 H1 for PEG. I project EPS over this period at 1.85p, giving a valuation of 14.8p. However, after adjusting for convertibles and options this comes down to 11.1p. Finally, crediting for cash held at the end of the period takes it back up to 16.1p. I am only using a PE ratio of 8 because this company is on the cusp of profitability. It needs to demonstrate an ability to continue to grow top line, in my view, to justify a higher multiple. In summary, I view the company as somewhat undervalued at present, with the possibility of considerable upside if it can grow revenue materially. Downside looks limited, so long as revenue can be maintained close to current levels. One negative to consider is corporate governance. There only seems to be one independent director, who is not the Chairman, and the Abdullahs (Rashid – Executive Chairman and Osman – Executive Director) would appear to be in a position to exert undue influence. I have bought 125k shares for the time-being, pending greater clarity on revenue potential and margins. (Edit 3/3/15: Increased holding to 250k). ================ Update 2014 H2 ================ A slightly disappointing set of full year results from PEG yesterday: - They did not deliver on their expectation at the half year to convert over one third of their order book to revenue in H2; they missed this by some margin and H2 revenue was actually £0.9m below H1. - Although consensus profitability was achieved, they needed to capitalise £0.7m to do so; this is a much higher level of capitalisation than seen in the past or predicted for the future. Following these results, I have reduced my projection of 2015 revenue to £12.4m. The order book remains around the £20m mark and on the other thread, there is a post on the Beaufort Securities analysis that suggests that the company “aims to deliver over 50% of the opening order book during 2015”. Thus, subject to any material new contract wins, the risk to my revenue projection would seem to be slightly on the downside. My projected profit for 2015 is £593k, which is down 11% from previously. In arriving at this, I have assumed the improving trend in gross margins continues, using 35% in my projections to reflect the change in mix away from MOD work. Note that profitability is very sensitive to this assumption. Using the same valuation basis set out above, my valuation reduces to 15.3p per share, after adjusting for convertibles, options and cash. However, with revenue momentum having stalled, and the company yet to demonstrate that they can deliver gross margins of 35%, I view this as only a hold for the time-being. =================== Update 2014 H2 v2 =================== I have revised my forecasts to reflect the 28 July 2015 trading update. The main changes were to reduce my revenue forecast again, down to £11.8m (was £12.4m). offset by an increase in my projected gross margin from 35% to 37.5%. My projected PTP increased slightly to £614k (was £593k). Using a target PE ratio of 8 and adjusting for cash, options and convertibles, this gives a valuation of 15.7p per share (was 15.3p). My projected PBT is lower than broker forecasts, so hopefully errs on the prudent side. I am feeling a lot more comfortable with these, based on the information in the update. Achieving a higher gross margin is critical to PEG. Indeed, if they can get these to 40%, which was the norm up to the end of 2013, would increase my valuation to more than 20p. ================ Update 2015 H1 ================ I was very pleased with the 2015 H1 results announced on 8 September. Profits of £356k were well ahead of my forecast of £123k; this was almost entirely due to actual revenue being £6.1m against £5.4m forecast. Encouragingly, this was achieved without repeating the spike in capitalised costs that underpinned the 2014 H2 result. The RNS guides to H2 revenues of £7.5m (40% of just under £19m), so I have gone with that but, given the lack of any clear growth trend, pitched my 2016 projections somewhat lower. Gross margin jumped to 36.4% in 2015 H1, and I have assumed 36.5% throughout my projections. The outcome is as follows: 2015: revenue £13.6m, PAT £779; 2016: revenue £13.4m, PAT £712. 2016 has upgrade potential. I have enhanced my valuation basis as follows: - Normalised for tax - Increased my target PE ratio from 8 to 10 to reflect the tax normalisation - Adjusted the valuation to reflect the net deferred tax position. Using the same valuation basis articulated in the header, my valuation increases to 19.1p per share, after adjusting for convertibles, options and cash. This represents a 48% premium to the current mid-price of 12.875p. On that basis, I consider PEG a BUY and have increased my own holding to 350k shares at an average of 12.0p. There is one proviso, however. Having now apparently achieved a level of operational stability, PEG needs to sort its strategy out. Currently, cash is slowly accumulating on the balance sheet but the company seems unable to articulate what will be done with it. The existing business does not seem able to deliver meaningful growth, so one possibility is to buy growth through acquisitions. To my mind, however, this increases the risk profile unacceptably. I would rather they carried out the capital restructure and started paying dividends. My preferred option, however, would be for them to put the company up for sale. It is simply too small and unexciting to justify an existence as an independent quoted entity, and almost certainly worth more to a bigger business that could cut out a large proportion of the administration costs. ================ Update 2015 H2 ================ Forecasts updated to reflect full year results. My projections are as follows: Revenue 2016: £13.1m 2017: £13.4m Pre-tax profit 2016: £788k 2017: £819k Cash 2016: £3.6m 2017: £4.5m Updated target price of 19.1p per share, based on a PE ratio of 10 and adjusted for surplus cash, etc. ================ Update 2016 H1 ================ Forecasts updated to reflect 2016 H1 results. My projections have improved, as follows: Revenue 2016: £15.2m 2017: £15.8m Pre-tax profit 2016: £1,023k 2017: £1,081k Cash 2016: £2.7m 2017: £3.6m One significant uncertainty with the valuation of PEG relates to deferred tax assets. At 2016 H1 they have recognised deferred tax assets of £429k and at 2015 H2 they had unrecognised deferred tax assets of £1,906k. My projections assume nil tax paid, with a corresponding reduction in recognised deferred tax assets, exactly offset by a corresponding recognition of previously unrecognised deferred tax assets. That means deferred tax assets stays the same, but unrecognised deferred tax assets reduce by the amount of tax that would have been paid at the normal UK corporate tax rate. I have then valued the remaining unrecognised deferred tax assets at 25% of their face value. Updated target price of 22.9p per share, based on a PE ratio of 10 and adjusted for surplus cash, convertibles, tax, options, etc. I hold 300k PEG shares at an average of 12.25p and have a realised profit of £8.5k. ================ Other information ================ Contracts tend to be large, long-term and irregular. Opaldouglas posted a useful summary on the other thread. Company website Http:// Major shareholders Http://
Petards share price data is direct from the London Stock Exchange
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