Pelatro Share Discussion Threads

[rivaldo] 27/3/2019 10:42

Many thanks rgmgo. Looks like a non-issue in the scheme of things, especially given the low directors' pay.

Daz, was there any discussion of capitalisation/write-off of development costs ($1.4m capitalized last year)?

[daz] 27/3/2019 09:55

Yes, thanks for posting rgmgo.I went to the presentation yesterday and they said the same thing.

[mikeh30] 27/3/2019 09:40

Thanks for that. I read it first thing yesterday and it didn't bother me too much. It obviously gets blown out of proportion for fun as people do but like you said it's on the good side of corporate governance. They could have easily not declared it. It's a high growth stock with a quick 40% upside with good coverage. Wouldn't surprise me to see another contract or 2 in the next couple of weeks. Remember target of 362 telcos

[rgmgo] 27/3/2019 09:21

Full disclosure I'm a shareholder but I spoke to the company in some detail on the car issue. For what it is worth I believe this has been blown out of proportion, but I can understand the intial reaction, which I shared.

The $270K was spent on 2 vehicles, one BMW one Mercedes in India, for the use of Subash and another senior director. Penal import duty, possibly as high as 100%, makes 'normal' executive cars very expensive in India. There is a very limited rental market.


The 2 directors home base is India. PTRO only pays senior executives modestly.....I think Subash's pay in 2018 will have been in the region of $80,000. Supplementing the basic pay with a vehicle made economic sense for the company and the executives, but most importantly this went through the remuneration committee and then was separately disclosed at the recommendation of the finance director. The alternative would have been to boost executive pay to a more comparable commercial level.


The maths works broadly as follows. 2 vehicles total cost $270,000, say $135,000 per head. Expected life 5 years ie $27,000 per annum value to directors. The deal is tax efficient to the PLC. PTRO pays tax in 3 jurisdictions. India, rate 31%, UK rate 19%, Singapore rate 18%. Therefore a tax offsetable purchase in India is more efficient than in any other group jurisdiction.

Would the reaction have been the same had they been paid a $27,000 bonus, for each of the next 5 years (even if that had been less tax efficient for the PLC).


Obviously, this is an area which will need to be watched going forward, but on the basis of the information I have, I think it is an appropriate commercial decision. You could argue that the company shuold have been more mindful of how the situation would look, but I prefer a different perspective, viewed with fuller information it was as mentioned, in my opinion, a sensible commercial decision and the disclosure was definitely at the positive end of corporate governance.

[davidosh] 27/3/2019 09:09

Are they on high salaries or it was suggested to me that this would be part of their overall pay package ?

Why go for expensive imported cars with such high duty charged ?

[gilgil13] 26/3/2019 22:44

Emailed IR about the cars - it was a BMW & Merc, apparently that expensive due to 100% import duty.

Still not sure that justifies it but at least they are 'exec' brand cars and not something ridiculous

[napoleon 14th] 26/3/2019 18:01

Costs being capitalised rather gung-ho, contract/sales expansion seems fishy or under-explained, as well as 2 top of range (rover?) exec cars.
Looks like pigs to the trough to me.
Otherwise, given benefit of the doubt, value looks good for 40% upside.

[petewy] 26/3/2019 13:52

Buys going thru as sells.

[mfhmfh] 26/3/2019 12:18

positive write-up by ST in IC today. he has a 120p target price. 'Strong buy'.

[daz] 26/3/2019 10:15

The following has just been pointed out to me '... During the year the Group acquired motor vehicles for the benefit of two Directors at a cost of $270,000.'

Jeez!!

[rivaldo] 26/3/2019 08:30

Indeed. Profits and EPS beat forecasts by a wide margin.

Adjusted EPS was 10.1c compared to forecast 8.5c. PBT was $3.1m compared to forecast $2.9m.

This year's forecast of 15.4c EPS is retained - i.e around 11.8p EPS.

Finncap's price target is 125p, but even this may be upgraded nicely with another contract win or two.

[someuwin] 26/3/2019 08:29

finnCap raise target price to 125p

[daz] 26/3/2019 08:07

Yes, very good results

and there looks to be more to come '... we expect a significantly increasing volume of change requests which, combined with a greater proportion of managed services and other repeat income, gives us a solid foundation for the year ahead.'

[rimau1] 26/3/2019 07:41

I wonder when the market will catch-up, this must be on a single digit EPS for 2019 which is silly!

[rivaldo] 26/3/2019 07:34

Lovely results - business is humming along.

Repeat revenues are building nicely, net cash is up to $2.2m, and with 10.1c historic EPS and a big jump likely this year the current share price looks pretty cheap.

[mikeh30] 19/3/2019 16:46

Good day ticking along nicely with some buying pressure into the close.Don't want any spikes here, just steady as she goes. Plenty more contracts on the way

[mikeh30] 19/3/2019 13:28

If it's anywhere near this price when RRE comes back I'll take a shed load

[mikeh30] 19/3/2019 11:22

16 telcos currently signed up and new mobile advertising revenue started.You can comfortably see them at 50 telcos in the next 18 months. 362 available.

[daz] 19/3/2019 11:00

Buy and hold for me as well. The story is set to develop for a couple of years at least.
There is a company presentation in London next Tuesday along with the results, you can register by emailing [e-mail]

[mfhmfh] 19/3/2019 09:47

new all time high.

[mikeh30] 19/3/2019 09:38

Don't want it to run away, I'm happy with 5% today. That'll do

[mikeh30] 19/3/2019 09:37

The story is going to get more compelling here.Not a mention of this share anywhere really. Fab stuff. Just let it do it's business.

[modform] 19/3/2019 09:33

I have lost the no of contract wins, when it breaks out it will attract momentum buyers, but so illiquid it needs a brave guy to trade this, so buy and hold for me until the story changes

[gleach23] 19/3/2019 09:29

Which is all the more surprising given the Simon Thompson write up mike.

Personally I found the mello presentation compelling. Thanks for your tip. I topped up with a few more this am.

[mikeh30] 19/3/2019 08:56

Not many have picked up on this one yet it seems.