Pelatro Share Discussion Threads

[stuart37] 21/9/2020 15:33

Had a couple of nibbles at this today -mid thirties seems like good entry point.

[paleje] 21/9/2020 13:41

Fair bit of trust lost here since the placing and it wasn't all that good before. I added on placing day because the boss's brother re-entered. Wish I'd waited now of course, but still think it will come good although ST's 100p target looks a long way off.

[gleach23] 18/9/2020 14:25

Appears to be an aggressive seller today. I'm happy to take the opportunity to top up my SB position. At least I hope it's an opportunity :)

Assuming no delays, should have Interims published next week. Revenue should be positive news so hopefully there isn't a profit/cash nasty surprise that the seller has wind of.

[gleach23] 19/8/2020 14:05

Having monitored stock availability on and off for the last week I topped up my SB long this morning. With the share price currently 43-44.5, there is just 10k available to buy.

Sentiment seems to ebb and flow quite strongly with this stock so hoping for an upturn shortly.

[gary1966] 19/8/2020 13:40

Well I have bought back a few today having sold out way too early previously at 60.25p to watch them carry on up to over 70p. Anyway RSI closed below 30 yesterday and just moving back above now and so hopefully the start of another run. A few gaps on the chart have been filled with the recent weakness and price below the placing price. There is still a gap at 41p but prefer the one at 53p now that I have bought. :-) Hopefully my re-entry timing will be better than my last exit.

GLA

[gleach23] 17/8/2020 19:52

Perhaps ST has been keepng his powder dry until after the placing

[cordwainer] 17/8/2020 18:44

if you've got IC did you check under the corporate actions section ? (was near the back in the printed format). as i recall, they sometimes indicated a recommended response or added comments.

[paleje] 17/8/2020 13:14

GM Thursday, placees (potential) underwater.

Been half expecting ST to comment on the action here, they've been one of his stalwarts for a while but his 100p target is looking a bit far fetched for now and the behaviour of management less than easy to support.

[cordwainer] 04/8/2020 20:11

To elaborate more precisely on my post #128.. please compare its quite a brief and contrasting style :-)

RE Placing to "
o strengthen the sales team in both existing emerging and new developed markets

o marketing at various industry conferences and events to broaden Pelatro's brand recognition and network

o fund working capital for Managed Services, which the Directors believe will enable the Company to tender for larger contracts"

I'm a bit worried about the business strategy and culture given the premise and wording of this proposed placing.

Is this a cavalier 'win customers at all costs' top-level attitude, driven by the thrill of the sale, never mind whether its deliverable we can sort that out afterwards ? I've seen this before and would mean that PTRO could end up being owned by its customer(s).

Misuse of the word "marketing" - that is specifically 'networking' only imho. I tend to only consider marketing in its broadest sense, e.g. to include a quality approach across all aspects of the business.

I dislike the concept of "strengthen the sales team" as though it consists of a special class of particular persons that specialise in slick presentation skills and very little else. I would hope a sales team consists of the key software design and development personnel armed with indubitable market research and a good specialised knowledge of the CRM and BPA being addressed, and that should include the CEO.

On the last point "enable.. tender for larger contracts", I'm afraid it is also meaning to say enable Company to deliver the *current* large contract, which is what one might expect working capital to be about. Otherwise it might more pointedly be referred to as investment capital?

Between the lines I speculate that management are worried that the major client, for which PTRO is having to build capacity using its own finance, is capable of curtailing the contract and treating it as parallel trial. Such is the bargaining power of the buyers in this case (see Porter's 5 forces).

Share price may potentially grind lower after placing until the market sees a more self-sustaining bottom line. And right now as a shareholder with a 0.9% commitment, I hope I'm completely wrong.

[cordwainer] 04/8/2020 18:01

I'll take today's comments as a collective " :-( " at best

[hew] 04/8/2020 17:43

paleje, ST actually said "Strong Buy", indeed, on 22/6. My note from his comments started: Business as normal, bullish trading update at AGM.

From PTRO's rationale, I see their key phrase being: "At inflexion point for growth prospects." For me that translates as "near term growth looks flat". Far from the impression I gained from recent news flow. ST also, I suppose and, for that reason, subject to what he says next, I'm not blaming him. Confidence in PTRO's news output lost though - now just the numbers for me.

In contrast, I've not actually (yet) lost confidence in the company or its strategy. Clearly they are ignoring the present and backing the future with positive actions to, hopefully, stimulate growth. And one of the family believes in them at least.

Guess I'll stick with them for now. (Hoping ST isn't so annoyed as to print a savage revenge.)

[paleje] 04/8/2020 14:35

Friends and family. I agree debt would have been better....or a higher raise price.

I suppose the logical thing to do is follow their lead. Anyone who bought higher won't be happy though and understandably.

Wonder how ST will skate over this, he's been following them and advised buying recently with a 100p target, I'm not saying he's wrong either, just the way they get there a bit iffy.

[outlawinvestor] 04/8/2020 14:12

Very irritating and questionable.

The company has low levels of long term debt - £362k at the last report. Their total debt to equity was 0.06. Couldn't they have taken a loan and avoided the dilution?

The questionable aspect is that Suresh Yezhuvath is taking roughly a quarter of the new shares. This is the same fella who offloaded almost all his shares at 80p last year and is the brother of the CEO and another executive director. It looks and smells bad.

[paleje] 04/8/2020 09:06

That was a bit unexpected, in April they said the following which didn't suggest they saw any need for raising additional funding. Annoying:-

Revenue and cost scenarios

In the short to medium term, for the reasons stated above the Group is largely unaffected in cash terms by any downturn in revenue generation as new contracts taken on now would be unlikely to produce cash for at least six months and even longer in the case of managed service contracts. As a base case, the Board's financial projections for the Group are based on a broadly "business as usual" scenario, other than a 75% reduction in travel costs for Q2 and Q3. However, In the light of potential COVID-19 challenges and taking into account the factors noted above in "Management of short-term cash expenditure", the Board has sensitised its forecasts and projections for the next 12 months to take account of possible changes in cash flow and performance in order to determine when and to what extent additional measures may be necessary. The Board's downside projections are based on a scenario whereby income from receivables is reduced by up to 10% in 2020 and 20% in 2021 and only 50% of expected new contracts are won (albeit this latter factor only affects cash flows towards the end of the projected period) - under this scenario, the Group would still have sufficient funding to pay planned overheads (including investment for growth) for the period of the projections. The Board's severe downside projections are based on a scenario where income from receivables is reduced by up to 20% in 2020 and 20% in 2021 (and likewise 50% of new contracts) - cost reductions can be made to offset this reduction in cash receipts, principally with a c. 15% reduction in staff costs which would result in the Group having sufficient cash for the period of the projections.

[cordwainer] 04/8/2020 06:05

What diabolically dilutive and malodorous scheme from hell is this ?
If its approved and "strengthen the sales team" or 'fund working capital for managed services' entails any new car I'm out.

[gleach23] 29/7/2020 13:00

Followed the trades back in yesterday and today in the hope that the usual Pelatro pullback has completed.

[jonbaker1] 07/7/2020 09:31

exactly my point. long term contracts with recurring revenue. the way to go.

[hew] 06/7/2020 13:53

The £50K wasn't by me, but I endorse the view. Beyond the good-looking future numbers, and the enlarged geographic sales push, I took real encouragement from the 24/6 contract win announcement of three existing customers extending/enlarging their PTRO usage.
Though trial periods probably precede sales to new customers, the cost/benefit for them in practice remains uncertain to some degree. With the switch to long-term contracts that surely include an escape clause, it is good to have examples of provably happy users.

[rivaldo] 06/7/2020 12:58

Looks like today's rise is due to a £50,000 buy at 72.9p - very keen, as paying well above the 72p full offer price.

[jonbaker1] 30/6/2020 08:39

entered PTRO again yesterday after exiting a few months ago.looking for a big upside with long only approach. their recurring revenue which was $1.5m at the start of 2019 went up to 4m in Jan 2020 and is now at 4.7m. great progress. management says this will go uch further in 2020 and will be in low double digits in 2 to 3 years. the valuation at that time will be huge as recurring revenue will get a high multiple. waiting for that.

[cordwainer] 29/6/2020 08:41

.. including my 79.65p :-))

[rivaldo] 29/6/2020 07:45

Good start to the week - looks like climbing past the Jan'20 previous high for the year and then on to 80p if all goes well. Particularly if we get a new contract win RNS.

[stuart37] 26/6/2020 12:55

Point taken!

[rivaldo] 26/6/2020 12:36

Let's agree to disagree! Charts are useful, but can be more or less useful depending on the circumstances. In small companies, especially those with less liquidity, they're less useful imo.

[stuart37] 26/6/2020 10:54

Cordwainer, Rivaldo - i love a good bet - liquidity is of no consequence to charts.
And for your information i am long my LTH but have sold my trading holding.
Care to put money on this!