Partway Share Discussion Threads

[hedgehog 100] 04/8/2023 14:18

04/08/2023 07:00 UK Regulatory (RNS & others) Parity Group PLC Trading Statement LSE:PTY Parity Group Plc

"Parity Group plc (AIM: PTY), the data and technology-focussed recruitment and professional services company, announces a trading update for the six months ended 30 June 2023.

During H1 2023, Parity successfully won a place on the coveted public sector RM6277 framework, which has an estimated spend of circa GBP2bn over the next four years, though it is not possible at this stage to quantify what level of revenue might accrue to Parity. This framework, which went live on 25 July 2023, represents a significant opportunity for Parity to expand further into the public sector at a time when there are increasing headwinds affecting the broader recruitment market.

In line with many others within the recruitment sector, Parity has seen market conditions become more challenging over recent months with economic uncertainty resulting in clients and new business opportunities deferring hiring decisions. As a result, we are expecting first half revenue to be 10% lower than that achieved in the second half of 2022.

In spite of the lower H1 performance, the business has improved its working capital management and reduced net debt to GBP0.7m as at the 30 June 2023 (compared with GBP2.3m net debt as at 31 December 2022).

With market conditions not expected to improve in the near term and a key client signalling a shift towards a more global supply chain, Parity is prioritising resources to exploit its strengths and opportunity within the public sector, and in particular the new RM6277 framework. As a consequence, the new business initiatives targeting the private sector, which included permanent recruitment services, have been scaled back and with a resultant reduction in headcount.

Historically, Parity's core business, servicing contract recruitment within the public sector, has been one of the most resilient areas when recruitment markets turn down. The Company sees this as a core strength of the business and will be looking at how the Company can leverage this to maximise value for shareholders.

Contacts

Parity Group plc Tel: + 44 (0) 20 8171
1729

Mark Braund, Chairman www.parity.net
Mike Johns, Chief Financial Officer

Allenby Capital Limited (Nominated Adviser Tel: [phone]
and Broker) 5656

David Hart / Dan Dearden-Williams (Corporate
Finance)
Tony Quirke (Sales and Corporate Broking)"

[hpcg] 04/8/2023 09:01

Closed my insignificant and tiny short this morning. Things will get worse, and central costs, not least those to stay listed, will overwhelm a reduced operational base. Too small to make more than beer money from given the inevitable volatility of nanocaps. That said I'd renter higher as this is the first profit warning of several to come.

[tomboyb] 04/8/2023 08:23

I don't think so -

10% reduction already factored in -

[onjohn] 04/8/2023 07:51

Factoring the debt and rates rising. No money here.

[onjohn] 04/8/2023 07:50

In line with many others within the recruitment sector, Parity has seen market conditions become more challenging over recent months with economic uncertainty resulting in clients and new business opportunities deferring hiring decisions. As a result, we are expecting first half revenue to be 10% lower than that achieved in the second half of 2022.



Penny today?

[chrisdgb] 04/8/2023 07:36

Trading update out..........

[hedgehog 100] 02/8/2023 18:23

Recent Share Trades for Parity (PTY)
Date Time Trade Prc Volume Buy/Sell Bid Ask Value
02-Aug-23 12:13:56 3.00 13,750 Sell* 3.00 3.50 412.50 O
02-Aug-23 09:45:41 3.00 20 Sell* 3.00 3.50 0.60 O


Chris,

I'm rather surprised that a sale of £412.50 can create 'desperation' in you, especially as the ask price wasn't reduced afterwards from 3.5p; just a bid price price reduction to 2.5p, to lower the mid price to 3p.

We did have an update PTY quite recently, on 15th. June; which the market took negatively, though I thought that the update was quite encouraging considering the wider economic challenges at the moment.

So personally I'm pretty positive here.

Of course I could be wrong about PTY, but I like the risk-reward ratio: and on average I make money buying into these sort of depressed situations.

Time will tell whether this will pay off or not, but I'm quietly confident that it will from this share price (3p).

[chrisdgb] 02/8/2023 13:52

Desperately need an update here........

[hedgehog 100] 27/7/2023 16:13

PTY's share price did move dramatically ahead of that announced possible move to AIM and fundraising, but the move was on far higher trading than now, and was commented upon by the company.

The move was also actually upwards.


10/05/2013 13:12 UK Regulatory (RNS & others) Parity Group PLC Possible fundraise and move to AIM LSE:PTY Parity Group Plc

"The Company notes the recent movement in its share price and confirms that it is in advanced discussions with new and existing investors to raise funds in order to be in a position to pursue its previously announced strategy to acquire businesses in the UK digital media market. The Company also confirms that, subject to shareholder approval, it is proposing to cancel its current listing on the premium segment of the Official List and to apply for admission to trading of its ordinary shares on the AIM market.

Further details will be announced in due course."





(PTY Chart 1.1.13 - 10.5.13)

[hedgehog 100] 27/7/2023 15:59

PTY looks very oversold and undervalued to me, so worth an investment on that basis.

You can't always conclude too much from share price movement in a share this illiquid.

Just one person selling can crash the price, and then others may start 'second guessing' themselves.

That's why many people prefer to buy when a price is rising.

And this isn't a share that's haemorrhaging cash, so I can't see why any dilution would be massive.

Note that the company's last placing was actually just over ten years ago (at 27p/share), when the company transferred from the Main Market:-

17/05/2013 12:00 UK Regulatory (RNS & others) Parity Group PLC Notice of GM, Proposed Placing & Admission to AIM LSE:PTY Parity Group Plc


Of course any small listed company can potentially delist, but in PTY'S case I think that a takeover makes more sense, and is more likely.

[hpcg] 27/7/2023 11:39

It needs money, recruitment is turning down, it's too small to be listed. Indeed the only reason to stay listed is to raise cash.

[dusseldorf] 27/7/2023 11:06

I'd be careful hedgehog - everything about the price movement to me suggests either a massive dilution incoming or it's being taken off market

[hedgehog 100] 26/7/2023 18:30

From this thread header:-

"Long-term investors in Parity will have witnessed the rise and the fall of a business which at its peak in 2000 was worth around £1 billion."


The billion pound valuation was obviously far too much, in line with the technology bubble at that time.

But now, at an all-time low of just 3.25p, market cap. £3.35m., the share price looks to have overshot in the opposite direction.


PTY's skilled technology staff of over a thousand are a scarce resource, and as such the share is deserving of a far more generous rating to reflect that:-

"Data analysts jobs and talent outlook (UK)
Data analysts are in demand, with just 2 candidates per current vacancy. If you're searching for these skilled professionals, you might be suffering from increased time and cost to hire. ..."

[hedgehog 100] 26/7/2023 11:28

More good news for the sector today, with RTC more than doubling on good interim results:-

LSE % Gainers Top Lists
EPIC Name %
ACT Actual Experience +152%
DISH Amala Foods +131%
RTC Rtc +108%

26/07/2023 07:00 UK Regulatory (RNS & others) RTC Group PLC Interim Results LSE:RTC Rtc Group Plc

"Interim Results for the Six Months Ended 30 June 2023

RTC Group Plc (AIM: RTC.L), the engineering and technical recruitment Group, is pleased to announce its unaudited results for the six months ended 30 June 2023. ..."

[hedgehog 100] 25/7/2023 13:16

25/07/2023 07:00 UK Regulatory (RNS & others) SThree plc RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2023 LSE:STEM Sthree Plc

"RESULTS FOR THE six monthsED 31 MAY 2023

Resilient performance in H1 driven by our contract business

SThree plc ('SThree' or the 'Group'), the only global pure-play specialist staffing business focused on roles in Science, Technology, Engineering and Mathematics (STEM), today announces its financial results for the six months ended 31 May 2023. ..."




The market seems to like STEM's interim results today: the share is up 13.5p so far today (3.87%), to 362.5p.

And PTY's H1 trading update should be imminent.

[hedgehog 100] 09/7/2023 14:18

The share price of tech stock GLAN has more than doubled this week, to a market cap. of c. £10.5M., on takeover hopes.
And it's share price has trebled since the start of April, after falling badly before that.

This sort of share price recovery could happen to PTY at any time.


05/07/2023 11:17 Alliance News Alliance NewsTOP NEWS: Glantus shares surge as mulls potential takeover bid LSE:GLAN Glantus Holdings Plc
05/07/2023 10:41 UK Regulatory (RNS & others) Glantus Holdings PLC Statement regarding recent share price movement LSE:GLAN Glantus Holdings Plc

"The Board of Glantus notes the recent share price movement in its shares.

The Company confirms that it is in discussions with Accel-KKR company, LLC ("Accel-KKR") and its investee company Basware Corporation in relation to a possible cash offer for the entire share capital of the Company.

Following this announcement, the Company is now considered to be in an "offer period" as defined in the Irish Takeover Rules, and the holding and dealing disclosure requirements listed below will apply. ..."




Glantus Holdings (GLAN):-

[hedgehog 100] 05/7/2023 08:38

Thanks Chris.

Why do you think that permanent recruitment is not doing as well as project delivery and managed services?

It's because the threat of recession makes companies warier of taking on permanent staff, as opposed to just contracting for the specific services they need:-

"For over 45 years we have been connecting our clients with the best data, technology and transformation talent. We place over 1,200 skilled professionals each year as well as provide fully-formed teams to deliver projects and managed services."


So I don't think that PTY is very exposed to the threat of a recession, and indeed this threat does have a positive for the company.

[chrisdgb] 05/7/2023 07:48

Thanks for the comments, certainly shows the potential, everyone just petrified of recession…

[hedgehog 100] 04/7/2023 13:21

PTY's £40.6M. of annual revenue is over eleven times its market cap., and its losses and debt are small in relation to this.

An acquirer may well feel that they can save costs if PTY is part of a larger organisation, and also benefit from cross-selling opportunities.

ECSC was also lossmaking, but that didn't stop if from being taken over, at a huge premium (170.1%): for c. £5.4M. of cash, compared to its latest interim revenue of £2.77M.

PTY also looks to have a turnaround underway, with good positive momentum, and I think that the H1 trading update (announced on 25th. July last year) should highlight this.


As regards a potential predator for PTY, I wouldn't be at all surprised if SThree (STEM) has already been sniffing around.

STEM's market cap. is c. £453.95M. (134,501,400 shares x 337.5p), compared to PTY's of £3.61M., i.e. c. 125.75 x higher.

That obviously considerably reduces the range of potential acquirers for STEM.

STEM is more likely to be an acquirer than an acquiree, and PTY looks like a very appropriate bolt-on acquisition for it, which it could easily afford.

STEM's revenue last year was £1,639.4Bn., i.e. (coincidentally) 3.61 x its market cap.
And that's at a depressed share price that is down from 600p in 2021.

In comparison, PTY's 40.6M of revenue last year divided by 3.61 gives a value of £11.25M.

So even allowing for STEM's cash, and PTY's debt, you can see that a takeover value for PTY of c. £10M. or so looks quite reasonable, considering that tech takeovers generally demand a big premium.

Especially as PTY has considerable scarcity value as an acquisition target.

[hedgehog 100] 02/7/2023 12:18

15/06/2023 13:25 Alliance News Alliance NewsIN BRIEF: Parity eyes continued momentum in year ahead LSE:PTY Parity Group Plc
15/06/2023 07:00 UK Regulatory (RNS & others) Parity Group PLC AGM Statement LSE:PTY Parity Group Plc

"Parity Group plc (AIM: PTY), the data and technology-focussed recruitment and professional services company, announces that at the Company's Annual General Meeting ("AGM") being held at 12 p.m. today, Mark Braund, the Company's Executive Chairman, will make the following statement:

"In its Annual Report and Accounts for the year ended 31 December 2022, the Company highlighted three areas of focus for investment in 2023 to support future growth.

In the public sector, the Company has been successful in opening up new opportunities with existing frameworks and adding new frameworks that further broaden the potential client base.

Engagements with new clients in the private sector have the potential to develop into material sources of income and have already seen the Company working on a number of contract assignments for these clients.

Having set a target to develop our permanent recruitment capability further in 2023, the uncertainty in the economy has made it more challenging to build on the achievements from the prior year. Despite these challenges, the Company continues to believe that permanent recruitment will be a future area of growth for the business.

The Company expects to continue to build momentum, and with the groundwork laid in the first half of 2023, continue to grow our pipeline of opportunities with existing and new customers. The Board remains committed to returning the business to growth." ..."




That looks to me like a pretty positive update; in summary:-

• Public sector work (2022 revenue £22.6M.) is doing well.

• Private sector work (2022 revenue £18M.) is doing well.

• Permanent recruitment (2022 revenue 0) is not doing as well as the above two.


But the third area is a new venture that is more for the future than the present, and is more reliant on economic recovery:-

16/05/2023 07:00 UK Regulatory (RNS & others) Parity Group PLC Final Results LSE:PTY Parity Group Plc
" ... We established in 2022 a small permanent recruitment team with a mix of experienced permanent recruiters and graduates from our academy training programme. The team has started to build momentum and we are focusing business development resource to further develop the pipeline and conversion to revenue in 2023. ..."



The company looks relatively well-funded to me, and at just 3.5p, market cap. £3.61M. (103,075,633 shares in issue) looks hugely undervalued.

Until the middle of June, its all-time closing low was 4.5p, but this week it closed at 3.25p for one day, before recovering slightly.

I would think that at this level it could attract the interest of a predator, and could easily get taken over for 10p/share or more.


The recent takeover of ECSC shows the huge premium that can be required to acquire a quality company like this from a depressed s.p.:-

31/03/2023 11:55 UK Regulatory (RNS & others) Daisy Corporate Services Trading Ld Recommended Cash Acquisition LSE:ECSC Ecsc Group Plc
" ... The Cash Consideration represents a premium of approximately:
o 170.1 per cent. to the closing price of 20.0 pence per ECSC Share on the Last Practicable Date;
o 138.0 per cent. to the volume weighted average price per ECSC Share for the three month period ended on the Last Practicable Date; and
o 46.0 per cent. to the volume weighted average price per ECSC Share for the twelve month period ended on the Last Practicable Date. ..."

[diku] 30/6/2023 22:19

Well it has survived for over 22 years since boom and bust of Y2000...just plodding along...think it is only listed for PR purposes...

[its the oxman] 30/6/2023 22:08

How long can this co survive? And does it deserve to given the track record.

[owenski] 27/5/2023 09:19

It's always been recovering.

Bargepole

[diku] 27/5/2023 08:36

Recovery story since Y2000???...

[chrisdgb] 16/5/2023 08:12

Finals out, look worse with late payment and goodwill write off but an optimist could sniff a recovery story here...????