Public Recruitment Share Discussion Threads

[vida] 31/5/2006 19:32

KImboy - your point about earn-outs is well made. Over zealous management trying to grow the biz on the cheap...inevitable failure. I lived through this with Anite!! PUG offers compelling value now, whatever happens to the public sector - demand for specialised positions continues apace. I suspect the price will not develop too much before autumn but would like to be proved wrong. Will add over Summer if possible.

[kimboy2] 31/5/2006 19:00

I think it is just off peoples radars. The name of the game for the company is expectation management as that is what they got caught out with last November. They will be underpromising and overdelivering I feel.

Tradingwise they are clearly better now than they were a year ago when they were at 130p.

The most interesting part about the share price performance last year was how destructive these earn outs can be when things start to look a bit wobbly.

[stemis] 31/5/2006 17:48

Price drifting nicely upwards.

My analysis shows a forecast EPS for the half year (pre any costs from the Barclays rebanking) of 7p. So that's an annualised P/E of 2.6. Either there is something we don't know about or this is massively undervalued.

[mjcrockett] 17/5/2006 14:26

SteMis, Excellent post. Thank you.

MJ

[njp] 17/5/2006 13:27

Well, that just might be an 850k reduction in the overhang.

[njp] 17/5/2006 11:22

That's a pretty good case for the defence, SteMis!

[stemis] 17/5/2006 11:13

I wouldn't blame anyone for waiting until the interims to see how the 'recovery' is going. It will give more up to date figures for debt and trading. So far its all been based on inference from the company's announcements and the refinancing by Barclays.

Nevertheless the results for 2005 show:- Revenue Margin Profit Current trading (4 mths)
------- ------ ------ -----------------------
Education 33.7 26.8% 9.0 Revenue flat, margin up
Social Work 22.7 18.8% 4.3 Revenue growth, subdued margins
Health 23.8 15.5% 3.7 Good revenue growth, lower margins
---- ----
80.2 17.0
Overheads -11.5
Interest -1.1
----
Total 4.4
====So Health accounts for 22% of gross margin and it would take a pretty big problem to derail performance.

Based on the acquisitions in the second half and unbderlying performance at least as good as last year, I am expecting headline numbers showing significant yr on yr improvement at the interim. At that point it may be difficult to buy any quantity of shares at this price.

You pays your money and takes your chance!

[njp] 17/5/2006 10:41

I'd have to agree, kimboy. There's always going to be a need for temps - locums, social workers, supply teachers - and budget problems usually tend to exacerbate it - hold off permanent recruitment and use casuals to meet the peak workloads. Margins might be a little tighter but they have good niche positions.

Sentiment is obviously against this one at the moment, but to my mind this is more than accounted for in the price.

[kimboy2] 17/5/2006 09:55

I think we will have to wait till the trading statement after the first half. This came on July 1st last year. Hopefully we will get some sort of update from Bridgewells then as well.

I notice that Oriel issued a hold reommendation yesterday. I don't know if there was any analysis with it. Can anyone get hold of it.

I presume the sound of trouble at the NHS will weigh on sentiment till the update as with Rivaldo above. The company of course has said that the health sector has shown "good revenue growth" and this is when compared to the much stronger H1/05.

My view as far as the health sector is concerned is that the NHS is always going to need the service and the margins they do it for, which were 15% but have reduced, can't be matched by the NHS. Therefore a budget saving on this would be a false economy.

But I would say that wouldn't I.

[cloudfall] 17/5/2006 09:28

Well seems to be on a slope back down again. Obviously a few people loosing faith, surprised that this hasn't sprung in to "action".

[rivaldo] 15/5/2006 09:40

Must admit to having sold my holding. Nothing to do with the markets, I simply talked to someone who imo knows about these things and was told that the use of both locum doctors and social workers is highly vulnerable and dropping at the moment with the current funding crises around the country.

Better to take a small profit and run if there's a hint of vulnerability, especially with an illiquid stock like this. Though I'm probably completely wrong, and my holding was relatively small anyway. Good luck all.

[njp] 12/5/2006 10:01

Well, that was my 5k test thru Barclays. Couldn't use quote and deal so left a limit order. Strangely enough, I'm a tad dismayed to find the fill was so prompt and cheap!

[njp] 12/5/2006 09:51

Tried 10k. Can sell at 40p but can't buy even 2500.

[njp] 12/5/2006 09:46

Just about to test those limits again, riv. Strange response by CSCS to drop their bid and offer price.

[rivaldo] 12/5/2006 09:39

Interesting - a 50k buy at 44p today, and now per Barclays you can only buy 750 shares online and sell loads. Stock shortage perhaps following those buy trades?

[empirestate] 06/5/2006 14:43

those late trades look like more clearing out of the seller, as soon as it is finished we should be in the 60-70 range within a short time

[rivaldo] 05/5/2006 16:20

Nice post NJP. I think the share mags will start to tip this now that all uncertainty is out the way for a start.

Is that T trade 100k at 41.5p a buy or sell? Could be a sell balancing out the smaller buys at 43p upwards, in which case hopefully it's now time to move upwards again.

[amberspyglass] 05/5/2006 15:53

if the directors are seen as "hostile" to the shareholders... i believe they are still presenting the performance of the company in "half empty" rather than "half full" terms.

[njp] 05/5/2006 10:55

There's been a few signposts to the value here in the last few weeks. First we had the trading statement prior to prelims, stating they were on target for the year. Then the prelims, where targets were in fact exceeded. Third, and importantly, we had confirmation that the earn-out liabilities would be funded by borrowings rather than extra shares. Last, we had confirmation from the AGM that the growth continues in the new year to date.

The business generates plenty enough cash to handle the debt and the p/e is still just 4 after the recent 25% rise. No worries, too, on the other metrics - EBITDA/EV and interest cover - when I last calculated them a month or two ago, and will update.

Some day the penny will drop and some tipster will claim a discovery.

[rivaldo] 05/5/2006 10:14

Yep, looks like PUG is close to a breakout. If only the MMs closed the ridiculous spread a bit it'd be even nearer! Still, on a P/E of 4 it's just a matter of time imo.

[njp] 05/5/2006 10:12

At some point punters will be falling over themselves to buy this. All it takes is for something to spark the buying - a tipster piece or broker buy rec - and people will see the value spelt out for them. Does need to be spelled out to them, unfortunately.

[empirestate] 05/5/2006 09:22

up we go, let us hope there is some weekend press comment

[pictureframe] 04/5/2006 08:05

my concern is that this gets taken out before it gets the chance to make serious money

[tomoslewis] 03/5/2006 21:50

I have not yet attempted to make a detaile profit projection, however from the trading statement issued today, my take on the worst case adjusted eps for the 1st 6m would be a profit stand still at 6.6p for the six months, and circa 12p for the year ..... no brainer ..... sub 4 p/e!!!

confirmed banking arrangements of up to 30m
operational cash inflow of over 5m
potentail earnings dilution for the latest acquisitions avoided by recent arrangements

all in all things really are on the up, I am happy to have cottoned on to PUG!

[valhamos] 03/5/2006 21:02

Rivaldo - I can confirm no buyback resolution for the AGM; I guess paying down debt will be the overriding priority for the next 12 months.