Parkmead Share Discussion Threads

[fhmktg] 13/9/2019 10:37

All a storm in a teacup if Platypus comes through soon and some progress on GPA in q1 2020.November updates should show some progress and good results from Holland.There's always West of Shetland to keep an eye on.It's a gamble, being with an AIM company, but TC has credibility and a substantial stake so I'm sticking in for the ride.

[typo56] 13/9/2019 10:27

Yes, I can see that if the intention was to fund Pitreadie via EMAL then EMAL could have lent £2.6m directly to Pitreadie. Unless for some reason they didn't want a direct connection between Tom Cross and Pitreadie?

The earliest we could have known about the repayment of £2.9m from EMAL to Tom and Linda was last month, when the overdue accounts were filed.

EMAL have lent directly to other Linda Cross companies. As at 31 May 2018:-
£455k - Octagon Property Development Ltd

EMAL were borrowing from these connected people/companies:-
£3.6m - Tom & Linda Cross
£2m - Tilestamp Ltd (owner of the head office)
£419k - Obsidian Resources Ltd
£2.9m - Parkmead Group plc

[cyan] 13/9/2019 10:08

Now if PMG had stated from the outset that the company is lending Mr and Mrs CROSS £2.9 million charging 2.5% interest; what do you think people would have said?

Maybe’ Good’ Lets help Tom out; then again……………………;.maybe not.

The “credit facility” was publicly declared by RNS in these terms;

“By providing this facility, Parkmead benefits from an exclusive arrangement to join EMAL in new ventures being evaluated by the Company, including inter alia potential opportunities relating to renewable energies.”

PMG “ benefits “ REALLY?

Its like Alice in Wonderland; Tom’s PMG loans Tom’s EMAL money so Tom’s PMG can benefit “exclusively” from Tom EMALS ,? errr what exactly?

[cyan] 13/9/2019 09:48

Good morning Typo56
You wrote;

"I don't think the £2.9m was intended to go to Tom and Linda personally. I think it may have been to fund Pitreadie Farm for the purpose of acquiring Tipperty and for development. If you look at the Pitreadie Farm Ltd accounts you'll see Linda increased her loan to the company by £2.6m in that period."

Look at the evidence

PMG provided the "credit facilty" for EMAL very publicly .

The evidence suggests monies later left EMAL; rather more quietly; and went to the directors PERSONALLY .

Note ; the latest RNS annoucing the extension beyond the 2 years ;refers to the £2.9m now as a "LOAN"; its obviously fully drawn.

Is it just a coincidence that PMG provided a rather odd amount as a “credit facility” ( now described as a loan) £2.9 million; and we later find £2,865,272 has been repaid to the directors?

“I don't think the £2.9m was intended to go to Tom and Linda personally.”

EMAL did NOT invest in PITREADIE Farm Ltd in its name.

The accounts are clear; it was a repayment to INDIVIDUALS; the cash LEFT EMAL.

Look at EMALS accounts. The cash LEFT EMAL and was repaid to T & L CROSS (The ONLY TWO directors) "During the current year, the company REPAID THE DIRECTORS £2,865,272"

Its clear; it was a repayment of monies that the CROSS’s had previously loaned to EMAL; apparently interest free.

Of course we can only speculate as to what the repaid cash was or was not used for. You make an interesting point with your line;

“If you look at the Pitreadie Farm Ltd accounts you'll see Linda increased her loan to the company by £2.6m in that period.”

[typo56] 13/9/2019 08:49

Thanks tournesol, I can understand it's better to hold in Aberdeen if only a couple of PI's are going to turn up anyway. Just 9am seems a bit antisocial on about the shortest day in the year and when a later start would suit PIs better.

cyan, plenty to read there.

I don't think the £2.9m was intended to go to Tom and Linda personally. I think it may have been to fund Pitreadie Farm for the purpose of acquiring Tipperty and for development. If you look at the Pitreadie Farm Ltd accounts you'll see Linda increased her loan to the company by £2.6m in that period.

I think it's possible that Parkmead identified Pitreadie Farm and later Tipperty Farm as renewable sites before Linda bought them (there is already a wind farm just to the south of Pitreadie Farm) and it was decided that Parkmead should acquire them indirectly, so as to avoid local attention. Linda buying under the guise of being for property development. This could be the reason why the related party loan wasn't RNSed until after 22 March 2018, after the Tipperty Farm acquisition had completed. However, if Tom is as loaded as people think, why the need of the £2.9m loan and risk attracting attention to the plan?

Doing it this way, via related party companies, is still very messy, and I don't know how to justify the builing of the substantial and possibly unfinished dwellinghouse, which may be being built by Linda's company (can anyone confirm this for sure?). Perhaps it's a "come's with the job" residence for the site manager. In which case, why not mention in the RNS with the "investment in new activities involved in the preparation for renewable energy operations"? Somehow I doubt Tom & Linda have lost out through this arrangement, and I'm not suggesting they should. However, just how they have benefited should be transparent to Parkmead shareholders.

Another aspect is Tom & Linda haven't yet repaid the £2.9m loan. If, as seems possible, the bulk of that loan was used to fund Pitreadie Farm Ltd it means that the Parkmead loan has funded the shares Linda and Kevan have acquired, giving the concert party a 25%+ interest. Is that wonky thinking?

[francoismyname] 13/9/2019 08:31

Mid 30’s today.

Then 31p to follow.

[fardels bear] 13/9/2019 08:26

More ursine myself.

[monte1] 13/9/2019 07:50

... or, indeed, to any ovine aficionados.

I am led to believe that they have some real stunners up there.

🐑

[tournesol] 13/9/2019 01:17

If you want to attend, you need to go up the night before.

Back in the very early days of Dana the AGM's were in London and I used to attend them. There were very very few other attendees of any description. So it meant the Dana board was coming down to London for the sake of just one or two PI's. After some years of this, Dana management decided to hold the AGM's in Aberdeen and save themselves some hassle. They were still timed for 9am, so I used to go up the night before and stay in the hotel being used for the AGM. I got special discounted rates negotiated by Dana IR.

I considered the time, effort and expense involved in attending to be well worth while. For me it was part of the extreme due-diligence which enabled me to run a concentrated portfolio.

I do not, at present, intend to go to Aberdeen for PMG's AGM, but I would recommend it to any serious and committed investors with substantial holdings.

[cyan] 13/9/2019 00:17

Maybe at the next meeting some shareholder might like to raise the "related party transactions"

People should not be affraid to question the value of the 'related party transactions' ; to look at the details and surrounding circumstances.
Its perfectly reasonable to query whether the related party dealings were in PMG's best interest.

On 27th July 2017 We had PMG providing a £2.9 million credit facility (2.5% interest)to;
ENERGY MANAGEMENT ASSOCIATES LIMITED

I will refer to the company from now on as EMAL

Lets consider the background to the deal.

Company House has EMAL business description ;

"Nature of business (SIC)
41100 - Development of building projects
41202 - Construction of domestic buildings
68100 - Buying and selling of own real estate"

The company has THREE OFFICERS;
Linda CROSS ; Secretary
Thomas CROSS Director
And again
Linda CROSS Director.

See here;


PMG justified the 2017 loan ;which was renewed after its two year term ,in these terms ;

" By providing this facility, Parkmead benefits from an exclusive arrangement to join EMAL in new ventures being evaluated by the Company, including inter alia potential opportunities relating to renewable energies. "

Questions;

Couldn't EMAL get the cash elsewhere?

What made EMAL an APPROPRIATE partner to advance PMG SHAREHOLDERS BEST interest?.

Are there not numerous others PMG could have entered "exclusive arrangements" with.?

I can see no evidence of PMG ever joining EMAL "in new ventures"

Appears, imo, there was No justification for extending the loan this year..

So , just WHAT did EMAL need £2.9m for?


Here are the clues ;

By 31 May 2018 ; That's Within TEN MONTHS of the "credit facility" ;EMAL repaid £2,865,272 to 'the directors'.. Very close to that £2.9million figure PMG loaned to EMAL.

A reminder; The directors are Tom and Linda CROSS

Look at the EMAL accounts for y/e 31.5.2018 here;


we can read this;

"During the current year, the company repaid the directors £2,865,272"

So; PMG's £2.9 million cash GOES to EMAL and within 10 months ; we can see £2,.865,272 HAS LEFT EMAL and ends up back in the personal hands of EMAL's 'directors' Mr and Mrs CROSS

So, its not unreasonable to conclude, on the balance of probabilities, that the PURPOSE of the £2.9 million loaned to EMAL was to allow EMAL to repay directors .

Imo this does not look good.

Imo, the deal did not substantially benefit PMG , but did benefit the directors( T & L CROSS); they could extract their cash to do other things with.

That money came originally from PMG’s coffers via that "credit facility" to EMAL for ;“exclusive arrangement to join EMAL in new ventures” : NO suggestion that any cash would, a little later, go to the "directors".


The EMAL related party transaction was NOT properly handled; it was not RNS’d in 2017 as it should have been; so PMG were in breach of AIM RULE 13

It was not mentioned in the results RNS dated 17.11.17;



It WAS mentioned on page 70 of the full 2017 accounts glossy document here; ;


PMG eventually fessed up to the rule breach on 22nd March 2018 here;



Now, lets look at the PITREADIE FARM LTD related party transaction ( L CROSS interest)
I have seen this SAVILLS brochure for sale of TIPPERTY Farm dated MAY 2017



TIPERTY farm was originally on for offers over £3.8m and eventually sold for £4.852 million plus £303k costs total £5.155m; sale date 9th March 2018

TIPPERTY Farm became a major asset of PITREADIE Farm Ltd (L.CROSS 75% interest)

In March (12th & 30Th) ;two £1.8 million loans were SECURED against assets seperately; PITREADIE Farm, and SEPERATELY ,TIPPERTY Farm,in the form of charges; total £3.6million.

These loans were for ONLY 5 years and interest only. Rather short.

So , lets look at values;
PMG are buying Pitreadie farm Ltd for £ 8.5 million by issuing shares. They are taking on the £3.6 million loan debts.


Looking at the accounts to 31st May 2018 we can find the value at that time;

Total Assets less current liabilities was £7,940,884

However the total liabilities were listed as £8,199,310

These liabilities were principally cash L. CROSS had loaned and the £3.6 million Bank of Scotland loans.

Subtracting the two left a negative value of -£258,426


We have to accept on trust the fact that PMG bought PITREADIE Farm Ltd because it was the BEST in all of Scotland on its own merits; that someone did do 'due dilligence' and were in no way influenced by the fact the property was 75% owned by L CROSS who had invested a huge sum of her own cash.

It was just a coincidence that this loss making, heavily indebtted property belonged (75%) to PMG's bosses wife .


But; Its not unreasonable to ask; aren't there hundreds of other farms with "potential" for Wind solar and biomass; with and without permissions?; so what made this one SO special; SO outstanding and in PMG SHAREHOLDERS best interest?

I can not see any OUTSTANDING merit.

I am sure PMG would be happy to confirm that they used due dilligence and considered many other potential assets.

However In MY opinion this deal was rubbish, and we have CROSS family interest involved as was the case with the EMAL “Exclusive” "credit facility".

Not impressed AT ALL with these two related party transactions.

Perhaps PMG will reflect more ,in future, before any more controversial and complicated "related party transactions" are signed.

The SHAREHOLDERS interest should always be the FIRST priority.

[11_percent] 12/9/2019 22:47

Looks like standing room only.....

[typo56] 12/9/2019 22:07

I realise it's easy to get to by air, but it's not a day return if it's a 9am start. How normal is it for companies to start AGM at 9am? Even SPD started at 11am and was in London.

[monte1] 12/9/2019 21:58

Ah, a serial ovine admirer.

Head easily turned.

[fardels bear] 12/9/2019 21:54

One of them..

[monte1] 12/9/2019 21:49

Is Serica your favourite sheep?

[fardels bear] 12/9/2019 21:45

We're already very long Serica.

[monte1] 12/9/2019 21:38

Aberdeen may be easy to get to.

Thankfully that should make it equally easy to get out of.

Phew.

[cyan] 12/9/2019 12:53

Typo; please check your message box.

[mallorca 9] 12/9/2019 12:32

fanshaw

I totally agree.

I still think however that this will be looked back upon as one hell of a buying opportunity.