Penna Consulting Share Discussion Threads

[pictureframe] 09/8/2012 13:46

Seems to have found the floor here - mulling over taking a position. Has not followed the general market rally though.

[pictureframe] 05/1/2012 21:39

Been watching this year on year that cash balance is coming down 8 million then 5 then 3 now 1..........wonder where it is going?

[pictureframe] 02/2/2011 15:11

Wow looks like some institutional investor has had enough cant see a private investor holding that much. Look at those huge sells going through. How the price is holding up I dont know!

[pictureframe] 02/2/2011 14:50

This def has further to fall - 135,000 shares dumped a £1

[pictureframe] 02/2/2011 08:26

Hmmm post 139 wasn't far off the mark - still think 50-80p is fair value

[pictureframe] 10/6/2010 11:08

A couple of more years belt tightening from their largest clients. Most of their income is derived from the banking sector and publis sector via outplacement. Banks/PS will not be splashing out on this service now they will be giving their redunadants the minimum.

The arguement that the recruitment business will off set does not wash, hardly anyone is taking on at the moment.

Wait for around 50-80p imo

[stegrego] 09/6/2010 22:10

Down to 120p already, but still doesnt look cheap (or maybe it does, cant decide)

A few years ago was 50 to 100p so maybe thats where its heading.

[pugugly] 04/6/2010 10:58

"The combination of these factors is expected to impact our business in the first
half of the current year and, as a result, there will be only marginal profits
in this period."

Marginal provits could easily degrade into a LOSS. While more confident of the 2nd half I believe that UK plc will be going through very significant belt tightening for the next few years so could well be some time before thebusiness recovers.

(imo & dyor)

PRICE TARGET. Agree with Stegrego at the moment but probably nearer to th e100p than the 150 given today's momentum.

[stegrego] 04/6/2010 09:49

MMs clearly didnt read beyond the numbers to the outlook, as they marked up slightly on open. I thought they would mark it down 10% or more.

Now 17% down and 140p to sell.

Not sure where the bottom is but somewhere between here and 100p looks likely.

[wjccghcc] 04/6/2010 08:32

Agreed. Sold all mine at 180p.

[stegrego] 04/6/2010 08:13

Results announced last week to be the 8th, yet they bring them out on the 4th.

Quite pleased they did actually as i thought about buying on the 7th and the results have saved me a job.

Do not like the outlook at all and i think these are heading sub 150, possibly lower.

[labatie] 26/2/2010 08:08

I agree.

I've looked at this and it's a v attractive investment.

But the spread - imagine what it would be if things went sour for some reason

[johnrxx99] 25/2/2010 02:54

Was wondering the same. RSI at record lows, projected per < 10 and peg 0.28, good yield and good 3 year eps forecasts. Puzzling really.

HLO also off at the moment so one assumea general market distrust of the so called recovery.

Watching and waiting. The 10% spread is a big problem.

[graham101] 15/2/2010 16:08

Hi, sorry to disturb the silence on this site. Does anyone know why the share price has fallen so much recently? Thanks

[stegrego] 12/1/2010 12:53

This is now 3/4 recruitment and 1/4 outplacement.

SAVG much smaller outfit and they lost a significant contract, maybe Penna picked it up

'Because our cyclical recruitment business is three times bigger than our counter cyclical outplacement business we can be confident that Penna will be a major beneficiary of the upturn when it comes'

[pictureframe] 12/1/2010 12:49

might be worth shorting on the back a savg dire statement

[stegrego] 14/12/2009 18:45

GCI

Recession, and the resulting upheaval in the jobs market, has lately played into the hands of City-based Penna Consulting, a human resources services specialist with market-leading skills in 'outplacement', the process of helping to find new gainful employment for workers that have been made redundant.

As this severest of recessions runs its course, the AIM-quoted group's counter-cyclical outplacement operations will continue to deliver growth. However, following June's acquisition of recruitment business Barkers from the administrators for £8.6 million cash, which doubled the company's size, Penna is as well placed to benefit from upswing in the economic cycle as it has been in past periods from downturn.


Established back in 1974, by founders who actually formulated the outplacement concept, Penna is a highly diversified concern with a strong recent track record. Under CEO Gary Browning, the strongly cash-generative, dividend-paying company is pursuing an ambitious and clear strategy that should result in further organic growth. Financially strong, Penna is also scouting for further sizeable acquisitions in the human resources services space.

Strategy
UK focused, but able to deliver internationally, Penna is on a strategic mission to help organisations improve performance through their people. Its service range spans the entire employment lifecycle and includes advertising communications and recruitment. In fact, the company is the biggest UK recruitment advertising agency, helping long-term clients in both the public and private sectors to attract candidates using print and, increasingly, digital means.

Penna also recruits executives and supplies executive interims (its executive interim team is the UK's second biggest) and has benefited from its focus on the public sector throughout the downturn. As the economy picks up, it plans to expand into commercial sectors.



Further services include board and executive coaching, as well as leadership and performance consulting. Pleasingly, the coaching side of the business, which could be viewed as a somewhat discretionary service, has held up rather well. According to the enthusiastic Browning, 'A lot of the banks now use coaching and it has maintained its revenues. We advise clients not to cut that because it is an investment.'

Penna is perhaps best known in City circles for its 'career transition' offering, more commonly known as 'outplacement', a part of the business that has been going great guns amid the downturn.

'Basically, everything we do is sold to HR [human resources],' explains Browning. 'We have over 2,000 clients, including 70 per cent of the FTSE 100, and cross-selling is a key part of our strategy.' The customer roster is both impressive and diverse, littered with names including Alliance Boots, Alcatel, Bank of America, BT, BAE Systems, ITV and PC World. Over in the public sector, DEFRA, the Department for Constitutional Affairs (DCA), the Home Office, the Learning and Skills Council and even the Police Service of Northern Ireland are just some of the procurers of its services.

Hitherto, the company has been best known for outplacement, whereby it supports individuals and organisations through downsizing and other workplace changes, proffering expert advice and ensuring people affected by redundancy are supported as they look for new work, while helping employers with the implementation of redundancy programmes. Needless to say, amid the worst recession for generations, the outplacement business has proved the key growth driver and should continue to grow for the next two to three years. This is because unemployment continues to rise as you come out of a recession.

'We have been known to date for outplacement and we are not ashamed of that,' says the loquacious Browning. 'It has driven our growth and we are UK number one with a 34 per cent share.

But with Barkers, we decided to break this cycle once and for all. Barkers, the oldest advertising agency in the world, was close to a £100 million business a few years ago and it fills that hole in our strategy'.

By buying Barkers, a sound and profitable operation bought from the administrators of BNB Recruitment Solutions, Penna transformed its previous bias towards outplacement. Now, 25 per cent of revenues are generated from outplacement and 75 per cent from recruitment-related business, ensuring that in the next upswing Penna won't be disadvantaged by being 'sub-scale' in recruitment. Contributing £16.4 million of sales in Penna's first half to September, the Barkers acquisition has brought in complementary services, while widening the client base.

Looking to the future, Browning says, 'We want to do more substantial acquisitions, possibly in the areas of training and development. But they need to fit well, have a brand and be substantial'.

Management
In the CEO hot seat is the affable yet determined Gary Browning, a qualified accountant who joined Penna in 2002, was made director of operations in 2004 and then joined the board in early 2005.

A University of Warwick graduate whose earlier career included a 12-year stint with advertising and marketing giant WPP, Browning has big ambitions for Penna and continues to cast his eye over suitable acquisitions to help the business grow. When not diverting his energies into Penna's profitable growth story, he is a passionate supporter of Liverpool Football Club.



Overseeing developments from the chair is the experienced Stephen Rowlinson, who was chief executive of Sanders & Sidney (Penna in its previous guise) in the early 1990s and whose CV includes work with McKinsey. Rowlinson joined the Penna board in late 2004 and assumed the chairmanship in February 2005.

Overseeing the numbers – Penna has pleased analysts with its recent tight control of costs – is David Firth, who earned his accountancy spurs with Thomson McLintock in 1985 and joined the Penna board in the second half of 1999, having previously been the finance director of Parity Plc.

On the non-executive side, management can call upon the advice of the seasoned Sir James Harvie-Watt, who joined the board in 1995 and was previously managing director of Wembley Stadium Ltd and a director of other leisure sector companies.

The group's second non-executive voice is qualified barrister Richard Stillwell, whose credentials include a 26-year career with chemicals giant ICI. Stillwell, who joined the board in 2002, also acts a non-executive director at non-woven fabrics producer Fiberweb and printing group St Ives.

Prospects
Prospective investors are buying into a business with a proven, profitable business model and excellent growth prospects. Having reported 176 per cent growth in pre-tax profits for the year to last March, Penna recently unveiled sparkling half-year figures to September, achieved in spite of the distractions of the Barkers deal.

Sales were increased 68 per cent to £48.4 million and pre-tax profits, before one-off acquisition costs, improved 56 per cent to £3.5 million. Even stripping out the transformative Barkers, like-for-like sales grew 11 per cent to £32 million and pre-tax profits were upped 47 per cent to £3.4 million, driven by improving margins and tight cost controls.

With its portfolio of businesses continuing to generate cash, Penna closed the half with zero bank debt and £6.7 million cash in its coffers, allowing management to propose a 50 per cent increase in the interim dividend to 3p per share.

Prospects remain upbeat in the counter-cyclical outplacement business, where Penna is supremely well placed as the UK's biggest career transition player and where visibility is decent, with services typically procured under two- to three-year deals. The outplacement operation grew by 28 per cent in the first half and is likely to thrive throughout 2010 and 2011 as the recession rumbles on.

Significantly, although demand for outplacement grows through periods of recession, as companies and organisations downsize, activity levels continue through periods of economic growth and may even surge during an M&A boom. And even if economic upswing results in slower growth in outplacement, the newly enlarged recruitment operations should pick up the pace and take over as the group'sgrowth engine.

Penna has the financial firepower to pursue any suitable, sizeable, acquisitive possibilities that may arise and is particularly well positioned to capitalise on the inexorable rise of digital advertising in the human resources services markets.

Valuation
For the current year to March, Collins Stewart forecasts a leap in sales from £63.2 million to £111.4 million, which should yield a healthy EBITDA rise from £6.4 million to £8.2 million. Next year, sales have the potential to approach £135 million and EBITDA £11.5 million.

Earnings are forecast to increase to 21.2p (2009: 17.9p) this year, representing growth of 18.5 per cent, ahead of another increase to 28.9p by 2011 (an earnings growth rate of more than 36 per cent).

Based on these estimates, the shares represent compelling value, even after a very strong performance in the year to date. They are changing hands for 12 times forward earnings, a rating that reduces to 8.8 on next year's EPS prediction. Moreover, the shares trade on lowly PEG ratios of 0.64 and 0.24, further bolstering the investment case.

As well as trading on reasonably undemanding earnings multiples, Penna offers investors progressive dividend payments. Following a successful year to March, during which cash tripled to £8.88 million, the full-year dividend was upped from 2p to 6p, while the more recent interim payout, as mentioned earlier, was upped 50 per cent to 3p per share.

With all these investment pluses in mind, the present rating looks undercooked for a company with the financial flexibility to complete further earnings-accretive deals – net cash balances are £6.7 million – and whose growth prospects have been much improved in the wake of the astute Barkers buy.

[wjccghcc] 03/11/2009 19:39

Thanks Stegrego.

[stegrego] 03/11/2009 18:52

Hoodless

Penna Consulting (PNA, 260p, £67.00m) Interims to September 2009 saw revenues up 68% to £48.4m (£28.9m) and pre-tax profits of £2.5m (£2.3m) though the reported number included £1m one off exceptional Barkers related acquisition costs so the underlying performance saw PBT rise to £3.5m (£2.3m). More impressive is the like for like performance that saw revenues rise 11% to £32.0m (£28.9m) and pre-tax profits surge 47% to £3.4m (£2.3m). The group ended the period with £6.7m of net cash and increased the interim dividend to 3p (2p). Barkers contributed for one quarter and produced revenues of £16.4m with £0.1m PBT. Forecasts for the year around £7.4m look more than achievable with 20.1p EPS and a DPS that seems set to rise from a forecast 6.6p towards the 9p level. The group is thus sitting on a 12.9x prospective PER with a forecast yield of 2.5% which we believe will increase to 3,5%. We maintain our BUY recommendation, last iterated on 24/09/09 at 240p with a 300p price target.

[stegrego] 22/7/2009 12:53

Interesting that the main shareholder (30%) sold 500,000 shares yesterday for 210p, bearing in mind the MID price is only 200p.

Clearly an insti wanting some stock and having to pay a bit over the odds for it.

Pity they didnt try to buy in the market, as the price would have been 300p!
Annoys that fund managers always get the best treatment.

[mrmerkin] 13/7/2009 21:16

why is the spread close to 10%?

[stegrego] 03/7/2009 12:52

Times

Tiddler to watch

Penna, the outplacement agency, rose 15p to 182½p as Collins Stewart raised its target price to 280p after the company's £8.7 million purchase of Barkers, a recruitment advertising agency, from the administrator with no debt. The broker said that the deal would give Penna a big lead in the growth market of online recruitment.

[stegrego] 29/6/2009 23:01

HB

Penna Consultancy (PNA, 167.5p, £42.55m) Penna has announced the acquisition of the business and certain assets of Barkers Group from the administrators of parent BNB Recruitment Solutions for a cash consideration of £8.6m. Barkers is a UK based recruitment agency that has built a leading position in digitally based recruitment as well as having a good reputation in traditional print. With a significant proportion of the cash consideration covering the trade debtors and fixed assets there should be little goodwill to recognise. The management has stated they expect the acquisition to be EPS accretive in the current financial year to March 2010. On the release of the final results on 20/06/09 we recommended the shares at 187.5p as a Buy to the 210p level. The acquisition strengthens our belief in the management - still a BUY.