Share Name Share Symbol Market Type Share ISIN Share Description
Parity LSE:PTY London Ordinary Share GB00B1235860 ORD 2P
  Price Change % Change Share Price Shares Traded Last Trade
  +0.85p +6.51% 13.90p 29,000 09:24:42
Bid Price Offer Price High Price Low Price Open Price
13.50p 14.30p 13.90p 13.75p 13.75p
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Software & Computer Services 83.82 1.66 0.01 1,390.0 14.2

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Date Time Title Posts
18/7/201808:32Parity - A New Beginning6,376
05/12/201713:53Parity - contractors working on BLOCKCHAIN tech2
31/12/201411:36Parity - 2015 the year of wearable technology11
20/3/200617:05Golden cross and renaissance for Parity10
15/9/200421:34Parity - large dump at 7p37

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Parity Group Daily Update: Parity is listed in the Software & Computer Services sector of the London Stock Exchange with ticker PTY. The last closing price for Parity Group was 13.05p.
Parity has a 4 week average price of 12.75p and a 12 week average price of 11.60p.
The 1 year high share price is 16p while the 1 year low share price is currently 7.25p.
There are currently 101,824,020 shares in issue and the average daily traded volume is 102,104 shares. The market capitalisation of Parity is £14,000,802.75.
thorne3: I attended the Parity AGM yesterday and came away with the feeling that the business is in good shape and on a firm growth tack;important issues that were touched on in discussion after the formalities are as follows with my own opinions as appropriate; 1)Inition.The completion of the disposal of this loss making business for £200k on April 20th removes the last of the legacy issues that have been plaguing the company for the last few years;this transaction not only immeasurably improves the profit/loss account and balance sheet but also removes an unwanted distraction in management time; 2)By December 2018 the company should be debt free subject to any unusual working capital requirements;this situation significantly improves management's decision making flexibility; 3)The Board recognised some years ago that future growth will come from the high margin management consultancy side of the business;this operation is being considerably beefed up and there appears to be no shortage of opportunity in both the public and private sectors.I would expect revenue growth in this sector for many years to come from the company's relatively small current base; 4)At the end of the day it is all about management and I have every confidence that Messrs Rommel,Anthony,Firth and Conoley have the vision,ability,ambition not to mention common sense to make things happen at Parity. 5)2019 will be the first complete year of earnings without exceptionals and this in my opinion should produce no less than 2.5p per share and rising;assuming a p/e of 12 this indicates a share price of 30p which is hardly ambitious at this stage in the company'growth. Things are now getting seriously into gear at Parity and I have no doubt that before long aided and abetted by a dividend payout possibly beginning in 2020 the company will become a growing star of the AIM sector.
thorne3: When the completion of the disposal of Inition is announced,possibly at the forthcoming AGM if not before,there will be significant interest in this stock with the share price moving up towards 20p.
push n run: Looks like a great turnaround story here, very undervalued after the disposal of Inition. My only questions would be: 1. Dividend policy going forwards - What proportion of free cash flow do they intend to pay out? Their strong cash generation could support a cracking dividend yield at the current share price. For example, even if they were conservative and set themselves a dividend cover of two, that would still be £1m+ which is over 8% at the current market cap. This would also leave them with plenty of cash for investment & looking after the pension fund. 2. There's a mention in the latest accounts of identifying new acquisition opportunities. Isn't trying to grow through acquisition what got them into difficulties in the first place? They've only just got rid of Inition, why not try growing organically for a few years first?
glasshalfull: PTY Delighted that Parity will be presenting at #Mello 2018 this coming Friday. Only a few tickets left for the event. HTTP:// As I tweeted on Friday, I added 500k shares to my holding as ultimately I believe this an excellent risk/reward investment at the current share price. If Mr Swinstead (retired CEO) is indeed selling his entire holding (which nobody has yet confirmed) then this simply allows the opportunity for investors to add at a lower price. I’m in touch with a couple of PI’s that indicate they would add several million if the stock is indeed available. We saw some late trades today...perhaps they came from Mr Swinstead??? Before I provide some of the rationale for my investment here, worth also revisiting Philip Swinstead’s holding as even though there are infrequent posts here, clearly some posters are dismissive of an investment as this time due to the perception that Mr Swinstead is a seller. Why let facts get in the way? Now, he may be looking to sell a few shares or ... perhaps he is indeed looking to liquidate his entire holding. Let me review the holding RNS’s that apply dating back to the time when he stepped down from the board in Nov 2015. —- 04.11.2015 - P Swinstead - Stands down from Board (following 5 years) 17.11.2015 - BUY 850,000 (9.9p) = 14,145,215 shares 09.12.2015 - BUY 150,000 (11.9p) = 14,295,215 shares 21.12.2015 - BUY 663,000 (10.75p) = 14,958,215 shares 03.04.2018 - Holding RNS = 12,043,751 shares (therefore SOLD 2,914,464 shares between 2016 and 2018 13.04.2018 - Holding RNS = Stating, “wife’s shares removed as I’m no longer a director - Parity advice”. In other words, he no longer requires to declare his spouse’s holding as no longer bound by code of conduct for Directors. His holding is quoted at 10,075,351 shares with additional info that his wife’s holding was 1,968,400 & these shares are now excluded from the RNS & the voting rights threshold. So if we add P Swinstead’s shares 10,075,351 + 1,968,400 held by his wife = 12,043,751 shares. Therefore, following the purchase of 1.6m shares in 2015 he has subsequently sold 2.9m between the beginning of 2016 & April 2018, retaining 10m shares as at 13th April 2018. As mentioned, I’ve absolutely no idea if he’s looking to sell further - and may have done so today - but we are only talking about £1.1m - £1.4m stock (if you include his wife’s holding) which may be attractive to an institutional holder...that’s if it is available & he’s intent on selling. What I’m attempting to say is this is not a material amount of stock however way you wish to dice his holding. Now the main reason for my post...a quick summary of why I’ve invested as an overview prior to their Mello 2018 appearance. *Strong Results (ignoring Inition - now disposed) A fortnight ago we had confirmation that the continuing businesses comprising Professionals & Consultancy had beaten forecasts...they were in fact 73% ahead on FY16. Diluted EPS for continued operations were 2.08p (PER of 5.5 at 11.5p share price). *Cash generative Importantly that cash generation was even stronger than forecast resulting in net debt falling to -£1.6m versus forecasts that indicated that debt would only fall to -£2.0m. So, £400k better than forecast & continuing the amazing cash generation that has seen debt fall by almost £6m in 2 years! Net Debt Reduction 2015 = £7.4m 2016 = £4.4m 2017 = £1.6m 2018 = estimates of net cash position Now with Initiation off the books I believe we can expect the company to achieve a net cash position this year as the disposal improves cash flow by £712k (the cash cost of funding Inition’s operating losses). *Pension Liability reduction It should also be noted that the pension liability reduced from £1.9m to £1.1m in 2017. *EV/EBITDA, PER & PEG low The EV/EBITDA rating of 4.8x & PER of 5.5 look far too low for a company that is exhibiting strong growth & generating cash. Indeed, the PEG rating is only 0.55 where 1 is fair value (see Jim Slater’s - Zulu Principle). *Earnings raised Earnings were raised by +6% for 2017 following their “slightly ahead” trading statement in Dec 2017. WH Ireland also indicated that they had raised EPS by +13% for 2018 prior to the Inition disposal. *Increasing Margins The strong performance of the Consultancy Division continued during 2017 with revenue up +79% to £9.5m. This is excellent news for the company as the operating margin in Consultancy was 12% last year & helped improve the overall operating margin for the company to 2.5% from 1.9% the previous year. This growth in Consultancy should result in ever improving margins & thus profitability in the coming year. It should also be noted that Consultancy was 33% of 2017 revenues & this also provides greater revenue visibility due to recent contract wins (£5m+). *Positive Outlook The company announced significant contract wins across both divisions recently and mentioned in their results that, “We aim to grow Group revenues, with further focus on the development of the consultancy business driving margins, and to manage that growth with continued strong cost management.” As mentioned, WH Ireland upgraded earnings on the back of results & believe there to be momentum in the business. Conclusion Parity achieved 2.08p diluted EPS las year on a continuing basis. With Inition now sold the company will now be in a position to focus on driving growth in the continuing businesses & therefore earnings of 2.2p - 2.4p may be achieved on a diluted basis...therefore they may be on a prospective PER as low as 5. So on the basis of a move back to net cash, strong cash flow, improving margins, low PEG, low PER & earnings growth I firmly believe this an excellent risk/reward opportunity as per my opening remarks. In response to one poster, WH Ireland do not appear to be ramping the stock IMHO. They issued a brief 1 and half page update on the day of results and only 2-paragraphs on the disposal of Inition yesterday. Declaration I’ve been adding to my position as confirmed at the beginning of my post. Hope this post useful for any investor wishing to conduct further research. Look forward to meeting some of you at Mello over the next few days & where we will all get the opportunity to evaluate a number of investment opportunities including Parity, watch presentations & meet the management teams of the companies in attendance for what will be a fantastic event. Kind regards, GHF
thorne3: Thanks Aishah-Yes the key to a rerating of Parity is news on the disposal of Inition;the market does not like uncertainty and so clarity on the Inition situation will enable,e&oe,the share price to move ahead.
thorne3: Aishah-Who is or are GHF? With interest rates rising which can only benefit the pension fund deficit and all borrowings repaid by December 2018 the prospects for Parity are beginning to look quite rosy.The management is also ambitious and so I would expect a share price "breakout" sometime this year.
glasshalfull: I find it stunning to observe that the share price is still (-30%) below July 2017 highs following a 6% upgrade to 2017 EPS & PBT targets & confirmation that they are “slightly̶1; ahead of forecasts. Especially on the back of strong growth in Consultancy which commands margins of c.17% versus the 3% margin in the Professionals side of the business. WH Ireland indicated that revenue visibility could be as high as 35% in Consultancy at the beginning of 2018 which underpins forecasts further. Since my introductory comment (post 6149) in Sept 2017, following decent H1 2017 results, the shares have fallen back (-15%) so I am currently underwater. I added in Oct at 8p following the lead by the CEO who bought 400k shares. I note some previous comments surrounding a small legacy pension scheme. I believe it had c.70 members & has been closed to new members & future accruals since 1995. Retirees make up 2/3rd’s of members. The deficit has risen by the lower bond yields we have witnessed in recent years. This is a small pension scheme which has a small bearing on PTY which will pay £230k to the scheme annually. Lastly they failed to mention any update concerning the sale of the Inition business. On checking through Twitter it would appear that this business is attracting considerable interest at trade hopefully we’ll hear something sooner or later to its disposal which may be just the catalyst for a re-rating. The fact that PTY is on a PER 5.5 for 2018 & 4.8 in 2019 is just plain silly IMHO. Kind regards, GHF
thorne3: If the announcement includes information on the disposal of Inition for anything like a reasonable sum-don't ask me how much that might be- it would certainly be something to look forward to.The removal of uncertainty on this issue would enable the company to move forward and would most certainly impact the share price favourably.
malcontent: I've been waiting an age for the turnaround in fortunes of this company to be reflected in the share price- it could yet be another 6-12 months even. I'm confidant it will happen, so I hold in the "bottom drawer" But the opportunity cost hurts me - I could have this money invested elsewhere and have come back to buy at any time over the last year I find the timing of the "re-rates" is often baffling for me ,as an amateur investor, to fathom that's why I hold a diversified portfolio- so I don't get too twitchy If a company is heading in the right direction, you will make some money......eventually
glasshalfull: PTY Courtesy to declare I've been a buyer of Parity over recent sessions following the strong H1 results they delivered last week. On a prospective single digit PER of 7.8 for 2017, with forecast double digit earnings growth, strong cashflow & improving operating margins through focus on Consultancy Services that is growing strongly. Share price has failed to react to the improving picture with a low price of 9.13p and high of 12.88p during 2017 in comparison to the current price of 10.13p Checked back & pleased to see kemche here who I'd the pleasure of corresponding with over on the APC thread & chrisdgb, where we share an interest in TAVI. Background Parity has been on my watchlist since the 2016 Full Year results were released in March 2017. This highlighted a turnaround in the business with the company generating £3.4m cash & reducing net debt by £3m (from £7.4m in 2015 to £4.4m). PTY also achieved PBT of £1m (vs. £3.3m loss 2016). Importantly the company had removed £1m of costs from the business & highlighted growth of 30% in their higher margin Consultancy Services. This resulted in operating margins increasing to 1.9% from 1.2% the previous year. H1 2017 Results These highlighted further progress with Parity generating a further £2.16m cash in H1 & net debt falling from £4.4m to £2.3m. That's a reduction of £5.1m net debt in the last 18 months. EPS for H1 2017 was 0.62p (vs. 0.23p H1 2016) & PBT came in at £0.68m (vs. £0.28m H1 2016) on continuing operations. Again, Consultancy Services was the engine of growth with revenue +48% although margins were held back as they invested £300k-£400k through an increased sales headcount & requirement to utilise contractors on new projects. To place this in context, the current market cap @10.13p is only £10.1m & WH Ireland have adj. PBT of £1.6m pencilled in for 2017, growing +18% to £1.9m in 2018. This equates to 2017 adj. EPS of 1.3p this year, growing +15% to 1.5p in 2018. The discontinued business Inition, has been up for sale since Dec 2016 & shows on the balance sheet with net assets of £1.9m. Sale anywhere in this ballpark would wipe out net debt entirely, although the performance of the group hasn't been too shabby in reducing debt by £5.1m in the last 18 months as highlighted above. Conclusion It looks good value to me on a prospective PER of 7.8 for 2017, falling to PER of 6.8 in 2018 especially with the H1 2017 results indicating that the positive momentum was continuing with over 50 new client wins across the business & extension of a major contract with the MoD since the period end. They have also been awarded positions on major frameworks such as Digital Outcomes & G-Cloud for consultancy services. Parity has also been throwing off cash & are currently forecast to end 2019 with £2.5m net cash before any proceeds from the sale of Inition. That's some improvement on a net debt position of £7.4m at the end of 2015. WH Ireland have also indicated that the pipelines in both divisions cover revenue forecasts for 2017, mitigating risk somewhat. They retain a 17.5p target price. Please DYOR. Kind regards, GHF
Parity Group share price data is direct from the London Stock Exchange
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