Pennant Share Discussion Threads

[mctmct] 13/3/2017 13:24

It may be time for a new thread title, to correct the spelling and the statement about the dividend.

[simso] 13/3/2017 09:03

Further contract extension announced this morning, worth £2.5m, most of which will accrue in 2018.

[leading] 13/3/2017 08:20

Many thanks Hastings, look forward to reading your views in due course.

[hastings] 10/3/2017 13:45

Enjoyed a good catch up with the CEO and speaking again next week.Asked the question posed by Leading earlier and along with the other points raised, very much reassured/convinced on the story.I'll be penning in due course for anyone interested, but most likely the back end of next week.

[simso] 10/3/2017 10:09

I thought the comment about production Capacity increasing to 30ksnf compared to 12 ksnf last year was also quite illuminating. Together with passing the Dividend, they clearly appear to believe they have the potential for significant growth.
It is also interesting that the Training division makes all the profit. I liked the comment about a trend in the market for increased training requirement as Software systems become more sophisticated and complex.

[leading] 10/3/2017 09:38

The company seems to be developing broadly to plan and as expected. Some tantalising hints of future contract awards; presumably they will win their fair share, who knows.

I don't like the talk of acquisitions. I don't mind forgoing dividends to support working capital for major projects, but am much more leery of providing funds for a new management team to splurge out with. If you get a chance Hastings, perhaps you could probe on what direct experience the Chairman and MD have with making and integrating acquisitions and what financial hurdles they will be applying before giving the go-ahead to any potential transaction. Do they have sufficient depth of management to carry out the integration as well as handling promising organic growth? I rather doubt it and would prefer it if they refrain from blowing up my investment. Many thanks.

[varies] 10/3/2017 09:27

It is strange that no appreciation is expressed of Mr. Snook's long service but we do learn that Mr. Walker was considered for the succession in 2014.
Might this mean that Mr. Snook warned his colleagues then that he might be leaving before long ?
The absence of "nasties" does come as a relief.

[hastings] 10/3/2017 08:31

Forward PER circa 11, but with forecast net cash for this year end of £4m against the £30m Mkt cap, hardly expensive. That said I suspect that it'll be news of new contract wins that will push the shares nearer the broker target.

[cockerhoop] 10/3/2017 08:05

No tax charge also flatters the EPS somewhat but still some tax losses to utilize so it will be 2018 until they're paying a normal tax rate.

[wjccghcc] 10/3/2017 07:59

Look ok. EPS a bit below. Large working capital outflow and a decrease of 8mm the order book since H1. However it looks like they're establishing a base for further growth so hopefully new contracts will start coming through soon.

[gengulphus] 10/3/2017 07:46

Results out - see . I did wonder whether the recent management changes would cause them to be later than announced in back in January, but they've kept to schedule - which indicates that the management changes haven't been too disruptive. No further details on Chris Snook's departure - just the bald statement that he has gone, followed by what the new management have done so far.

They also look, at least on a first skim-through, to be as good as that trading statement indicated - indeed, a bit better than I felt it had indicated, though that may just be me having taken the trading statement with a pinch of salt too many! And certainly a lot better than I feared after the abrupt, unexplained departure of Chris Snook!

No resumption of dividends yet, but I don't find that especially surprising given previous statements about the company's need to build up working capital for new contracts.

Gengulphus

[3dwd] 01/3/2017 16:53

Bought a small amount today ..Happy to add if any weakness.

[hastings] 01/3/2017 10:38

Some good posts/thoughts above.For what it is worth I'm speaking with Phil Walker on results day.I'm moving to the opinion that this was more down to a major falling out as opposed to anything more sinister lurking.We will see.

[threeputt] 01/3/2017 10:31

it does seem like something abnormal has happened, the CEO doesn't normally leave on a whim. I still don't like it, bit of an upheaval going on can only add to any disarray imo, experience has told me to leave companies alone that I have done well on in the past that are drifting - a bit like returning to your favourite football team after they've dropped a couple of divisions when they sign a new striker !

[gengulphus] 01/3/2017 10:18

Whatever the problem was, they're sorting it out quickly:



The mention of the new Management Committee, of ensuring "compliance with all regulatory and legal matters" and of adding "greater depth to our risk management and commercial functions" suggests to me that this might be a case of a company that's grown a bit too big for its management structure, and of a clash of views about whether the time had come for another layer of it...

If so, the difficult question is whether significant irregularities had happened within the company involving poor risk management, regulatory non-compliance, or such like? Or had someone simply highlighted the danger of that happening and insisted on closing the stable door before the horse bolted? The fact that they've now issued two RNSes without mentioning any specific problems suggests the latter - they're obliged by regulations to inform the market asap about such irregularities, and companies generally do, even though they often downplay them initially with a "we've got the matter in hand and are investigating, too early to say what the outcome will be" sort of statement.

But this is AIM, the regulatory Wild West of the stockmarket, so it's not all that strong a suggestion! We should know more at the end of next week (Friday 10th), when the preliminary results are scheduled to be released.

Edit: not intended as disagreement with leading's comments, which I didn't see until after I'd posted. And indeed, I think the possibilities he mentions are quite plausible triggers for a clash about management structure changes...

Gengulphus

[leading] 01/3/2017 10:12

The announcement today goes into quite a bit of depth about the appointment of a company secretary and in-house legal counsel. I think this is a signal as to what has gone wrong.

Mr Snook had been in post for a long time and had maybe become a bit too close to some of the Middle Eastern customers, or perhaps a little careless over the governance standards required for a public company.

No revision to the latest trading update which is good to see, but I remain nervous about exactly what risks and commercial functions the BOD are concerned about.

[threeputt] 28/2/2017 21:05

I came over here as it's far more lively than the death knell on lse on this share.
I sold out immediately the morning after the rns, I had visions of the price bring 20% lower at 8am so I was grateful to sell the lot around 86 on what was originally a long term hold and having originally bought at 44 & 34. I felt this could only drift on uncertainty, and I can see it still drifting further until there is some clarification as to why Snook left, it was also near all time highs.
It's a shame as I like the company turnaround story and felt there was further to go until this, but I remain out for the foreseeable at this point

[onjohn] 27/2/2017 20:42

Good way to limit losses. Unless there is a nasty in the results. Wonder why Snook quit?

[wilmdav] 26/2/2017 21:25

hastings, varies et al, I do not like it either but my concern is less than it was for the reasons given. My initial reaction was to sell 75% of my stake, which I did. Last Friday I bought back a third of what I had sold at a slightly cheaper price. So my residual concern is reflected in the fact that I now own only 50% of my pre-announcement shares.

[hastings] 26/2/2017 20:44

Simso, unfortunately I didn't get any further forward, but then given the sudden and abrupt departure, I wasn't really surprised.

This, along with the wider uncertainty created was enough to see me almost out, after all, a profit isn't as such until you realise it.

Wilmdave, thanks for the comments re-post 772 appreciated.

For me, the story should still be intact given that the last update stands, or does it?
No wish to come across as a total mercenary given my previous comments and posts, but I am with Varies here, I don't like it and this hasn't been handled well whilst the lack of clarity merely adds to the uncertainty.

[onjohn] 26/2/2017 19:30

Very abrupt departure
Note - no statement thanking him for services
Truly awful happenings, wonder if accounts will be signed off with qualification which will be a diasater

[varies] 26/2/2017 19:07

I still see Mr Snook's departure as a negative omen.
If, for example, he had expected PEN shares to be taken over at 121p within a few months, would he have willingly foregone the 30p x 1,400,000 that his B shares would have been worth ? He was also on a good salary.
He may, of course, be in line for a handsome redundancy payment.
We should learn more before long.

[simso] 26/2/2017 17:58

Very good point, wilmdav. I had imagined that Mr Snook had left against the company's wishes, but you are right, it could easily be that Mr Rice or another member of the Board decided the company would be much stronger without him. Pull or push. Hmmm I wonder

[wilmdav] 26/2/2017 16:16

Having just re-read hastings' excellent update (post 772), the comment that struck me most this time was the mention of the appointment of Tim Rice as non-exec director. The appointment was announced on 27/09/16.

"Pennant International . . . .is pleased to announce the appointment of Tim Rice as non-executive Director.

Mr Rice, aged 57, a chartered engineer and former managing director of Vector Aerospace, has over 30 years' experience in the defence and aerospace sector with companies such as Safran Group, Spirent Systems and Dowty. He now acts as a senior business advisor."

Could it be that Mr Rice has been influential in Mr Snook's departure? In any event, his presence on the board makes me a little less concerned than I was, whatever the undisclosed facts.

Like PJ1 above (post 777)I have been surprised by the minimal share price reaction to the news, which suggests, as is often the case, that at least some larger holders know more than we mere PI's.

[simso] 26/2/2017 13:57

Hastings, did you learn any more after contacting them? I am quite new into Pennant, so don't have enough feel for how crucial Snook has been to the business, and whether it can still develop without him. It had felt like they were on a roll, lots of contract win and next year already well underpined