Paragon Banking Share Discussion Threads

[zastas] 03/12/2009 16:20

I agree that even with PAG there is often too much executive reward, no matter how poor the outcome for the real owners of the company. But whatelse could they have done better?

Apart from selling the company , with the benefit of hindsight, the only thing PAG's management could have done better in my opinion was to have much longer term finance/borrowings in place for that working capital requirement. That was after all what the RI funds replaced.

As FF says, all its competitors have vanished or done much worse. It solely has remained profitable, pays a dividend and its PSBs continue to receive interest, without any threat of coupon suspension from Brussels.

I think you can say that PAG's shareprice was overvalued in 2006 and more recently, and still, was and now remains undervalued. Banks should trade at best close to NAV. Its NAV is now about 225 pence per share. You now have 2.6 shares for every old one plus you provided 250 pence in the RI. That suggests your old share is now worth about 140 pence in the market, not 14 pence and should be about 300 worth, leaving aside complicated future dividend discount valuing.

Bad enough but PAG must be the best of the bunch and was the first to take decisive action.

[the drewster] 03/12/2009 12:25

Yes, and I could have "done much worse" for my company, as could many others. The injustice comes from the fact that I don't see many employees benefitting from making such an overall pigs ear of things.

[future financier] 03/12/2009 12:15

Not quite a fair comparison TD due to dilutive effect of Rights issue - and after all PAG has survived (unlike B&B, NR and various Building Societies), it has not had a Government bail out (unlike RBS, Lloyds, Nationwide BS), and subscribers to its RI are in profit - unlike just about any bank!

So they could have done much worse for shareholders!

[the drewster] 03/12/2009 08:19

Not in the 100's of 1000's like in the good old days, but did you see that the three directors got another bung of "nil paids".

11340 for Terrington, 8501 for Keen and 5996 for Heron.

Probably the thanks for steering the price down from over £7 to the equivalent of 14p I guess.

[the drewster] 02/12/2009 09:40

I suspect not yet CR to be honest.
Looks like my call was the marginally better one when results came out ... only marginally better as I didn't short it.

About right for now I think.

[cockneyrebel] 01/12/2009 12:56

Sharp rally due here imo.

CR

[cockneyrebel] 30/11/2009 10:38

1034 GMT [Dow Jones] Credit Suisse raises Paragon (PAG.LN) price target to 165p from 110p. Expects a better revenue performance as the loan book runs down more slowly than previously anticipated and as impairments improve. However, has some concerns regarding the loan-to-value distribution of the loan book. Estimates that around 60% of the portfolio has an LTV of above 90%. Says, "despite the improving impairment trend we remain concerned that impairment may again rise once interest rates begin to normalise." Also thinks it is too early for an improvement in funding markets to allow a return to growth. Keeps at neutral. Shares -1.9% at 131.8p. (ANT)

[future financier] 26/11/2009 17:04

I think they're responding to news from Dubai - not the results!

[the drewster] 26/11/2009 11:04

FF - I thought you said it would take 6 weeks for people to respond?

[future financier] 24/11/2009 15:00

CR - past experience tells me that it takes the market about 6 weeks to respond to news in PAG - so if you believe that the results are good then you have plenty of time to buy more!

For the moment I am quite happy to sit on what i have without adding or selling.

[the drewster] 24/11/2009 13:44

qpincha - not if you strip out the exceptional gains (the dark arts of accountancy as some would see it).

[cockneyrebel] 24/11/2009 12:50

I think had the market been very firm this am these would have been clatting up to the previous highs today.


Forecasts were for around 9p for what I can see.

Mortgage numbers are now climbing.

Growing earnings.

Net assets risen by 5%.

Funding improving.

Housing market picking up

Looks attactive to me - I expect decent broker upgrades soon.

CR

[future financier] 24/11/2009 12:14

Well they have FINALLY 'fessed up to some of the disaster that is TBMC by writing off £6m of their investment - just another £10m to go (plus of course their continuing losses of £2m/year).

Consumer finance still horrible.

But the BTL loan book that caused many a commentator on this board to rubbish them has proven not just robust but almost stellar in its performance!

Probably fairly valued for now - until there is some re-awakening of wholesale funding markets.

[qipincha] 24/11/2009 12:00

Drewster
The basic EPS is 13.9p, not 10p

[undervaluedassets] 24/11/2009 09:56

I think the performance is pretty resilient all considered.

This company looks well run and remains profitable.

fantstic considering that most folk were predicting the death of BTL as a business going forward.

the price remains very undemanding

as for EPS ... yes of course they are down. there was a rights issue.

smacks of bargain to me.

I am a buyer!

[the drewster] 24/11/2009 09:31

I agree that going forwards things will become clearer, but I don't believe there is a compelling risk-reward case here and am happy to remain on the sidelines.

I agree with your 10p EPS struipping out the exceptionals, which was at the lowest end of my expectations.

[cockneyrebel] 24/11/2009 09:14

Surely you'd expect that and the market did too Drewster? We're comparing to what was achievded prior to Lehmans. The next set of results get moe interesting because the comparisons will be agaist the post Lehmans half.

Going forward comparisons get easier and demand increases. I think the numbers at the next results start to look even more stark.

CR

[the drewster] 24/11/2009 08:12

All in all I would expect holders to be reasonably happy for now.
Plenty of areas to keep an eye on and not get too carried away though ...
Interest receivable down
Net interest income down
Other operating income down
Underlying operating expenses up
Provisions up

EPS down 17.9 to 13.9 (c.22%) undiluted.

Total book size down 7.3%

I maintain a watching brief.

[cockneyrebel] 24/11/2009 08:11

Nice results imo and trading well under NAV.

eps is flatterted by
£18m gain on debt repurchase I think but that's still over 10p eps after stripping that out, well over forecasts.

Look to be performing well, trading well under the 220p a share assets and 2010 should be the year when mortgages take of from this level imo.

CR

[qipincha] 24/11/2009 07:27

great, eps 13.9p, bingo!

[qipincha] 24/11/2009 07:25

final results

[qipincha] 10/11/2009 15:10

so many thing on 24th Nov

[future financier] 10/11/2009 11:41

Prelims on 24 Nov.

[qipincha] 02/11/2009 12:23

Q1 is 7m
the first three quater is 31m in total

as they mentioned in their report, the income for Q3 is slightly ahead of their expectation, where 4m is coming from buy in cheap ,taken that out and averaged by 3, it is 9m, consider the market is slightly better than Q1,don't think the esetimation of 9m for Q4 is ambitious
however, your estimation 13p is not far from mine.