Pershing Square Share Discussion Threads

[double6] 29/8/2005 16:51

Loan Notes at 3.5p ??

[lord santafe] 28/8/2005 13:51

Looks a no brainer for the long term. Does PSH own a stake in HLC?.

You be surprised how few buys are needed to send PSH up 100%.

[double6] 26/8/2005 11:23

Has this bottomed now ??

Investments worth around the current mc.

[smxyz1] 05/8/2005 13:37

Yes, I have heard of Halewood. I wish I hadn't!! I have been with them for just over 12 months. I have invested approx £45K with them using their advisory service and went with their recommendations. My portfolio with them is worth about £15k right now. Take their advice with caution!

[rkd9] 12/7/2005 17:24

Halewood, yes, I've dealt with them. If you're interested in sharing information it would have to be off the BB, email perhaps?

[pachiaammos] 23/6/2005 14:19

Anyone here know anything about Halewoood International?

[jitumakwana] 02/6/2005 13:16

Another S.Dean company TWR just announced Reverse takeover of Miskina. Are there any implications to this S.Dean company?

[dawsonmp] 31/5/2005 15:27

Hi Is it just me or should this company have posted results by now.....

[man1] 27/4/2005 19:04

i got an e-mail about this company , just thought i would warn potential investors do your own research on mr Dean the man ties companies up with warrants and sub warrants and changes the rules to suit himself so that he always wins and the investors always loose..Take a look at artisan , cater barnard, and envesta up to his departure..

[zinco] 25/4/2005 11:31

18th April 2005
Editor-in-Chief Robert Tyson [e-mail] 020 7033 9389

*Pearl Street Holdings - Initiation of Coverage


Introduction
Pearl Street is an AIM listed cash shell looking to make core acquisitions in the healthcare sector. The company is a relatively new entrant onto AIM having listed in October 2004. It comes from the same Vince Nicholls/Stephen Dean stable as Elite Strategies.

At the pre-IPO stage, the company carried out a fundraising bringing in 118,761 pounds at 3p and after one month as a publicly traded company, Pearl Street Holdings spotted its first unquoted investment, Health Group. Based in Berkshire, the Health Group trades as Your Health Plus and has designed a cost effective, flexible alternative to conventional private medical insurance packages. The company is in its early stages of operation but has laid down the foundation for what seems like an accelerated growth plan.

Pearl Street loaned 600,000 pounds in the form of convertible loan notes which, if converted, would give the company a 37.5% stake in Health Group. Additionally, Pearl Street has bought the directors loans in exchange for shares, which increases its potential stake to over 50%. The short to medium term plan seems to be to reverse the company into the AIM listed cash shell, though the management at Pearl Street have not ruled out the option of considering other investments in the health care sector.

Pearl Street has cash balances of close to 100,000 pounds, loan notes worth 910,000 pounds from Griffin Securities and a large stake in the Health Group. If Health Group meets forecasts, the Pearl Street stake would be worth easily in excess of 750,000 which suggests that the stock could offer upside potential.

*This report cannot be viewed as impartial as GE&CR has been commissioned to write it by Pearl Street.
Key Data
EPIC PSH
Share Price 2p
Spread 1.5 - 2.5p
NMS 3000
Market Cap. 852,326 pounds
12 Month Range 1.6 - 8p
Shares Issued 42,616,292
Market AIM
Sector Healthcare
Net cash (estimate) 100,000 pounds
Contact Vince Nicholls
01732-838877





Background

There has been a raft of cash shells looking to list on AIM over the last six months, most of them promising to announce a reverse takeover or an acquisition within 12 months of listing. Pearl Street Holdings stands out from the rest, as one that has delivered on its promise in that it announced its first investment within a month of listing.

Pearl Street was incorporated in September 2004 by Griffin Securities, a wholly owned subsidiary of AIM listed Griffin Group. Griffin Securities provides financial advisory services to Pearl and key managers of Griffin Securities, Vince Nicholls and Stephen Dean are also directors of Pearl Street Holdings.

Griffin Securities raised 118,761 pounds for Pearl Street Holdings on listing, by placing 8.3 million shares at 3p. The intention of the company, as stated in the prospectus was to focus on the growing health care sector. The healthcare sector in the UK was valued at 16.18 billion pounds in 2003, increasing by nearly 6% between 2002 and 2003. A survey conducted by consultants Laing Buisson has shown that only 12.7% of the UK population is covered by private medical insurance. Of that 12.7%, 70% come under corporate medical schemes while the remaining 30% have private medical cover. That still leaves 87.3% of the population reliant on the creaking NHS. The private insurance market is clearly one that has scope for tremendous growth.

Following its listing, the company began actively pursuing its acquisition strategy. Pearl Street was looking to invest in a company backed by significant net assets, operating in an industry that was ready for consolidation; preferably a profitable, cash generative company. Less than a month later, it was introduced to Berkshire based Health Group Limited.

On 3 November, Pearl Street Holdings announced that it had issued 2.4 million new ordinary shares to raise 129,942 pounds. The cash was to be used towards convertible loan notes worth 600,000 issued to the Health Group. Under the terms of the agreement, the loan notes maybe converted into 37.5% of the share capital of Health Group. The conversion of the loan notes would classify as a reverse takeover and would require shareholder approval. And unless converted, the loan notes are repayable in whole in April 2007.

Soon after signing the agreement, the Health Group accepted an initial deposit of 300,000 pounds and has received the rest in three instalments of 100,000 pounds, the last one paid on 1st February 2005. In addition, Pearl Street paid the directors back for loans of 196,000 pounds made to Health Group in return for shares in the company. This added an additional 12.47% to Pearl Street's existing stake which brings its entire shareholding (assuming the loan notes are converted) up to 49.97%. The listed cash shell, has an additional option of acquiring all outstanding shares in Health Group at any time up to 30 April 2007. The valuation to be used for the potential acquisition is 6 times the average of pre-tax profits for 2005 and 2006.

While a reverse takeover seems like the obvious way ahead, the management has hinted that it might be considering other investments in the healthcare sector. The reverse takeover is also subject to the Health Group's performance in the year to June 2005.

Its one unquoted investment apart, over the last six months, Pearl Street has carried out placings and issued ordinary shares to raise funds of over a million pounds. 600,000 pounds of that has been invested in the Health Group, a large portion goes into fees payable to Griffin Securities.

On 15 April 2005, Griffin Securities offered a 910,000 pounds in convertible loan notes. The notes maybe converted into ordinary shares of 1p at a conversion price of 1.5p anytime before April 2007. The added capital gives Pearl Street the flexibility to increase its investment in the Health Group. Griffin has assured us that its intention is to have the loan notes repaid or to convert them into 60.6 million shares only at a time when that number of shares represented a relatively small number of the shares in issue. It indicated that it prefers the former route.

Griffin Securities offers broking and financial advisory services to PSH. On listing, Griffin owned 64.2% of the entire issued share capital and within five months of listing, had disposed its entire share (in order to maintain an orderly market in the company's shares). Griffin claims 15,000 pounds every quarter as fees charged for services provided and 10% of any funds raised. Griffin also received a one off fee on admission of 50,000 pounds and has the right to exercise its option over 1.3 million warrants.



Health Group Limited

Based in Bracknell, The Health Group has traded since February 2002. The company is in its early stages of development, having just designed, what it claims to be, a breakthrough medical insurance package and is in the process of marketing it to insurance brokers and companies.

Health Group was set up by two graduate nurses, Jo Clark and Jan Wilson. Jo Clark has worked in the healthcare sector for nearly fifteen years and worked at Norwich Union until 1990. She left her job to join a private American healthcare firm which introduced the idea of a "managed care system" to the UK. When the company decided to shut down its UK operations, Jo Clark took a few years off to research the private insurance industry and worked on developing an alternative to healthcare insurance as offered by traditional players in the market such as BUPA and PPP.

The company's has now developed flexible, tailor made healthcare packages for both corporate and individual clients. It has three products that it is intending to roll out to the medical insurance market, in competition with traditional players - 'Surgical Protection Insurance', 'The Health Fund with Safety net for Individuals' launched on 1st March this year and Corporate Health Packages launched earlier this year. The three packages are designed to provide an alternative to the deteriorating health care system in the country, by providing easily accessible medical treatment at one of the 200 registered private hospitals across the country.

The three packages aim to be different from conventional insurance packages as any money paid in is treated like a deposit, unlike an insurance premium which is non-refundable unless treatment expenses are claimed. Most packages include consultant fees, post operative care and accommodation costs. Health Group makes its money by charging 15% of the fund as an annual fees. Individual packages cost anywhere between 30 pounds and 55 pounds per annum per head.

The company's key product and one that is expected to contribute nearly one third of revenues is the Corporate Health Fund. The plan covers employees with chronic and pre-existing health conditions, a huge difference to traditional offerings which often seek to exclude such workers. Companies pay into a health account which serves as a fund and the amount remains on the company's balance sheet. It is treated like any other asset. The team at Health Group have included a stop loss mechanism which ensures that the fund is never drained dry by aggressive and large scale one off medical treatment claims. Unused balances in the fund are carried forward to offset the next year's payment. In a hypothetical scenario, assuming a company chooses to buy a 100,000 pound plan with BUPA and a 100,000 pound plan with Health Group, over a three year period, the company saves 105,000 pound with the Health Group and spends over 300,000 pounds (non refundable) pounds if the money was invested in a traditional medical insurance company.

The group operates through three divisions - Health care Services, which provides support in terms of administration and recruitment services, Your Health Plus, which operates a 24 hour support system for registered patients and Your Health Insurance which is the division that markets the healthcare packages. The focus is on selling corporate packages and over the last few months, with aggressive marketing, the company has signed three large corporate clients. Jo Clark, the CEO, estimates that there is a pipeline worth 15 million pounds ready to go into health fund deposits.

The company markets its products through a network of insurance brokers, IFAs, employee benefit agencies and has a core direct sales force team. As the product is new, it might take a while to break into the network of insurance brokers who convince corporate clients about the benefit of medical insurance from providers like BUPA.

In the year to June 2004, the company recorded sales of 213,000 pounds and a loss of 760,000 pounds. In the current year, sales are expected to jump to 4.5 million pounds with profits at the pre-tax level coming in at 217,000 pounds. In the year to June 2006, turnover should soar to 15.8 million pounds with pre-tax profits expected to come in at 1.7 million pounds. That equates to earnings of 217,000 this year and 1.39 million next year.



Growth Strategy - Pearl Street Holdings and Health Group
The Health Group has used Pearl Street's convertible loan notes to fund expansion within the organisation. The company has moved into new offices, hired direct sales teams and taken on staff to offer support to the customer care centres. The short term prospects for Health Group are exciting as the reversal into Pearl Street is largely performance based and results for the year to June 2005 should provide a clear indicator of the company's future. Health Group is keen to reverse into Pearl Street and the sales teams are working hard to sign on contracts before the end of June 2005. In the event that Health Group does not reverse into Pearl Street, Health Group will consider an independent AIM listing.

In terms of sector growth and development, there is already a perceived backdrop of failure associated with the National Health Service and today, the private healthcare sector is continuing to grow because of demand from the NHS for extra capacity. According to a leading provider of data in the UK health sector, one in 12 patients in private hospitals are actually NHS patients. At a primary level, NHS is being forced to address the issues of serious shortage of GPs working under its umbrella.

Pearl Street Holdings as a group, has not ruled out the possibility of seeking other acquisitions, reverse takeover or investments within the healthcare sector. The board continues to explore all options and the 910,000 pound convertible loan note, gives it the required additional capital to fund future plans.



Results, Cash flow, Balance Sheet

Pearl Street has been listed for just over six months and is yet to announce full year results to the year ended December 2004. The company has stated that it will report full year numbers towards the end of April. Considering the company has been operational for three of the 12 months, administrative overheads should be minimal with a quarterly payment to Griffin Securities of 15,000 pounds, directors fees which, as stated in the prospectus, should not exceed 25,000 pounds and listing fees should approximately come up to 50,000 pounds. The company's cash position as we write, is slightly over 100,000 pounds.

The company has carried out five fundraisings in the six months that it has been listed on AIM bringing in over a million pounds. Griffin Securities has lent the company 910,000 pounds in the form of convertible loan notes. We choose to treat this as a long term loan which will be paid back when the Health Group reverses into Pearl Street.

Management

The two directors on the board of Pearl Street are on the board of Griffin Securities.

Stephen Dean - Chairman - has spent a considerable amount of time working with the construction and leisure industry. In 1993, he founded what became the Dean Corporation which was admitted to the London Stock Exchange in 1997. Soon after he demerged some of the Dean Corporation's interests into Artisan UK, traded on AIM. He is currently Chairman of Griffin Group, Euro Capital Projects, Tower Plc and Pearl Street Holdings.

Vince Nicholls - Director - is a qualified Chartered Accountant. He left KPMG to become a partner of Spokes and Company. He is currently finance director of Griffin Group, Techcreation Plc, Elite Strategies, Euro Capital Projects, Tower Plc and Pearl Street Holdings Plc.

Health Group

Jo Clark - CEO is the founder of the Health Group and has 15 years of experience in the health care industry at a senior level.

Jan Wilson - Patient Services Director - is a graduate nurse with 15 years experience in Private Healthcare and Insurance. Along with Jo, Jan Wilson co-founded the company.

Steve Melton - Technology Director has 20 years experience in technology business development and management.

The entrepreneurial Mr Dean has attracted critics as well as supporters during a long City career which has seen some failures as well as notable successes. Clearly the rating of Pearl Street reflects this mixed view of Dean and will only be changed if Pearl Street/Health Group starts to deliver on its forecasts.



Shareholders

The company has stated that it is not aware of any shareholding above the disclosable 3% and confirms that majority of its shareholders are private investors.


Forecasts and Valuation
Pearl Street Holdings has to be treated as an investment company with regards to its valuation. As we write, the company trades at 2p, valuing it at 852,326 pounds. Pearl Street has also issued 1.66 million warrants at 3p and 3 million warrants at 4.5p to key shareholders which gives the company a fully diluted market cap of 945,671 pounds.

The market cap is underpinned by two factors - the company's cash position and its 49.9% stake in the Health Group. For purposes of the report, we shall assume that the reverse takeover will not be effected and instead, Pearl Street will chose to buy the remaining share capital of Health Group.

Pearl Street is looking to value the remaining shares at 6 times the average pre-tax profits in 2005 and 2006, a fairly prudent figure. Assuming the company achieves its forecasts of 217,000 pounds in the year to June 2005 and 1.712 million pounds in the year to June 2006, the Health Group is looking at a valuation of 5.78 million pounds. A 49.9% stake is worth 2.88 million pounds.

The loan notes from Griffin Securities, if converted into ordinary shares total up to over 60 million shares. There is no concern that Griffin will convert the loan notes into equity. It is more likely that Pearl Street will use the added cash to invest in the Health Group and once a reversal is effected, Pearl Street will be able to pay the loan off before April 2007. The amount therefore can be treated as a short term cash facility and long term liability. Which leaves the company with net cash of around 100,000 pounds.

The net cash added to the stake in Health Group brings Pearl Street's valuation up to 2.9 million pounds. Of course a lot is dependent on Health Group's performance - can Health Group really deliver on its forecasts. If it can that would silence some of Mr Dean's critics and would make the shares look fundamentally cheap.



Detailed Financials

Health group

Year to June 2005F 2006F
Sales
(million pounds) 4.5 15.8
Costs of Sales
(million pounds) (3.2) (11.6)
Gross Profit
(million pounds) 1.3 4.2
Overheads
(million pounds) (1.12) (2.4)
Pre-tax profit
(million pounds) 217 1.7
Tax - (0.351)
Profit after Tax
(million pounds) 0.217 1.39

[jitumakwana] 29/3/2005 21:51

Its gone very quite here.....when are we going to see some action?

[the big dutchman] 20/1/2005 16:35

tradx, i have done very well out of the 3 holdings that i have with rotten rows as you call them, so they aint too bad in my eyes, rotten rows all the way for me, oh yeah and by the way 15% in a day aint too bad.

[andy] 21/12/2004 17:02

Sadly PSH has just fallen 25%!

2.25p on the bid now, and Parker Rowe were trying to sell them to me at 5p two weeks ago. (And they wanted me to buy 100,000 too!)


Pearl Street Or 2.62 -0.875 -25.0% 2.25 3.00 25%

[legins99] 20/12/2004 01:04

Having telephoned Pearl Street Holdings regarding the recent downward spiral of their share price to fall below the float price, Vincent Nicholls has said that they know no reason except for the MM's trading market fluctuations which on AIM listed shares are susceptible to more violent swings on small volume.

Vincent Nicholls has also said the £600,000 unsecured loan from PSH to the Health Group has a condition attached to it which is the option to acquire the remaining share capital of the company. Bearing in mind that PSH already owns 49.9% of the Health Group and if the launch of their new corporate Health Care service product in January is as successful as they believe the market will receive it, it is highly likely that PSH would be exercising their options. In the interim period so I understand from Vince Nicholls is that PSH is also currently in a fairly advanced stage in negotiations with another company in the USA health care market sector and if these progress satisfactorily and on schedule, an announcement will be made perhaps as early as Jan05.

It seems clear to me the direction of PSH is that it is intending to be acquiring companies by reverse takeovers and mergers in the growing niche Health care market sectors with providing services to high wealth individuals and corporate key man executives which are attracting the higher percentage profit margins and returns to investors.

The following link to the document shows that PSH is under management by and gives a great deal of insight into the force behind the direction in which PSH is heading. It is worth noticing also from reading statements in the accounts of Griffin that Stephen Dean the Chairman has been behind the investment strategies and floatation of several successful companies listed on AIM.

[andy] 18/12/2004 00:53

Dil,

THE Mail On Sunday did an article on Parker Rowe recently!

It can be found at the link below;



in_article_id=396298&in_page_id=19&in_author_id=5



Pearl St. Holdings bad a bad day today, down around 20%.

My commiserations to any holders, but I really would check out Parker Rowe on google, and the article above, before making any further investment decisions based on their "research".

And try and watch a movie called "The Boiler Room", quite a watchable film, and a clear message emerges!

[dil] 17/12/2004 17:51

Pile of ramped up sh*te pushed by the unregulated Parker Rowe .... you still working for them dutchy ???


If they ever ring you then may I suggest you tell them to go shove their head up their ar*e.

[jonnybgoode] 29/11/2004 19:00

Dutch,

i think you might be watching too much WWF!

[the big dutchman] 24/11/2004 17:27

no not a yes, a definate noperoony, and evidently your research is as backward as you are!

[dil] 24/11/2004 17:24

Take that as a yes then.

And I did my own research thank you.