Petards Share Discussion Threads

[fevertreeman] 19/6/2024 13:57

QRO has been a fantastic acquisition that has saved the Abdullahs blushes, so hard to criticise them for that. The issue has been that until Affini there has been precious little to shout about and revs and profits have gone down in a straight line for years. One would have thought with the rail heritage that they would have been making much more effort in export markets but that hasn't been the case....

[pldazzle] 14/6/2024 12:35

doug74, you are perfectly entitled to your opinion but I for my part take a different view.

Historically Petards has been heavily tied to the UK rail industry. Capital investment in the rail industry is financed nationally through a five-year cycle known as Control Periods [CP]. CP6 ran from April 2019 to March 2024 and was accompanied by general turmoil including the progressive collapse of various train operating companies, uncertainties relating to potential nationalisation, the ups and downs of HS2 etc. So it's hardly a surprise, and certainly not the fault of Petards or its management, that the major rail orders it used to enjoy in the past have dried up in recent years. The same experience has after all been common to the whole industry. CP7 started only in April 2024 and, with £32 billion of state finance, suggests a reasonable prospect of rail orders coming back to life over the next year or two.

Meanwhile Petards' ANPR [automatic number plate recognition] interests have been going great guns. In 2022 the ANPR subsidiary, QRO Solutions Ltd, made a pretax profit of £588,000 (source Companies House) - a startlingly good figure - and although there was clearly some downturn in 2023, QRO is now clearly Petards' most profitable subsidiary from a near-standing start only a few years ago.

I personally see the acquisition of Affini as (a) earnings-enhancing and (b) encouraging.

Don't forget, also, the group's claim that the rationalisation steps taken in 2023 will produce £400K of annual savings - presumably pretax.

In short, therefore, and with no disrespect intended, I regard your comments as misplaced.

[ltinvestor] 14/6/2024 09:49

Turnover post acquisition will be £15m plus with a solid bottom line profit..one to buy and bottom drawer for a couple of years, imo.

[fevertreeman] 14/6/2024 09:28

Well said Doug.....the trajectory of revenues and profits over last few years has been relentlessly descending left to right on a graph.

[doug74] 13/6/2024 17:05

So, PEG was sat on a pile of cash and common opinion was that the company was undervalued. It invests that cash in an acquisition and the company is today worth 14% less.
The main issue is not the assets or the business segments. It’s the management team. The market has no faith. Only once the current geriatric team has finally taken up sheltered accommodation, can a proper restructuring take place, removing excess layers and cost, take advantage of synergies across the 3 divisions, drive commercial focus, improve financial mgt. and control, revamp the web site, etc., etc. and…generate shareholder value.

[ltinvestor] 13/6/2024 07:33

I agree, the acquisition is transformationalR30;.

[rivaldo] 13/6/2024 07:28

The results are a relative sideshow - the £2.8m acquisition is the big news for this now £4.6m m/cap company:

- highly profitable at £401k op.profit and £652k EBITDA
- prior 14 months saw £732k op.profit and £1.249m EBITDA
- 50% recurring income
- complementary industries and services offering synergies
- acquisition is mostly from cash (including o/d) and should be highly earnings-enhancing

It's somewhat of a gamble as it's using up PEG's cash pile. But it's good to see PEG taking the risk and upping the stakes.

The poor results are due to the hiatus in UK Rail - and to the £0.6m acquisition costs due to the nature of the transaction changing, which is too high. However:

- PEG have in the last Q4 cut overheads by £0.4m, and remained EBITDA-positive at £340k
- UK Rail is finally coming back to life
- QRO continues to be a lifesaver and Defence appears more promising now

If Rail really does turn positive then PEG has a long way to go from here.

[dealit] 13/6/2024 07:10

Results are not a nice read, what a sad state of affairs PEG are IMHO.

[smithie6] 13/5/2024 16:17

..very tempting to buy £500 worth & see if the quoted prices to buy-sell then rises 5% !!

[smithie6] 10/5/2024 08:52

up due to only 1 reported trade of <£600 !!

sure is illiquid

[balcony] 08/5/2024 12:57

I think results will be this week.it will be all about the outlook stastement.

[rivaldo] 23/4/2024 10:30

New appointment - interesting detail about the new AI-enabled safety tech:



"Petards Rail bolsters team with new appointment
April 22, 2024

Leading provider of intelligent train technology, Petards Rail has appointed Calvin Fahey to the role of procurement manager.

Calvin is Level 3 Chartered Institute of Procurement and Supply (CIPS) certified and brings with him near a decade’s worth of experience within procurement-related roles.

In his role at Petards Rail, Calvin will spearhead the company’s procurement team and processes, ensuring the timely and cost-effective acquisition of materials and services.

Petards Rail designs and delivers train technology to help companies within the rail industry maximise passenger safety, optimise train performance and meet ever increasing passenger and industry demands. Its technology includes forward facing and rear facing cameras, track debris cameras, an on-train camera/monitor system, Automatic Selective Door Operation, interior cameras and pantograph surveillance cameras. In addition, the company offers supporting services and a back-office software, eyeTrain Connect.

In the latter half of 2023, the company launched its PTeye solution which, incorporating the latest in AI-ready technology, was developed to prevent trap and drag incidents before train dispatch and, as a secondary safety measure, to detect drag.

At this time, the company also strengthened its team with the appointment of Jack Teichman to the role of rail engineer. An experienced mechanical design engineer, Jack joined Petards Rail having held a breadth of engineering roles such as product engineer, configuration engineer and outfit engineer, across a variety of industries including defence and electricals.

Speaking of his appointment, Calvin said: “I am thrilled to join Petards Rail as procurement manager. The company’s commitment to customer service and developing high-calibre intelligent rail solutions, made it an easy decision.

“I enjoy using data to inform continuous improvement, be it cost reductions, optimising supplier relationships or implementing more efficient procurement processes. I am looking forward to applying this in my role at Petards Rail and contributing to the success of a dynamic company.”

Victoria Hodge, general manager of Petards Rail, said: “I am delighted to announce the addition of Calvin to the Petards Rail team. His wealth of expertise and dedication to quality and continuous improvement align perfectly with our company values.

“It is an exciting time for Petards Rail marked by our recent win at the SPOTLIGHT awards and the launch of our new lifesaving technology. It is great to have Calvin on this journey with us.”

With decades of experience in the rail industry, Petards Rail has worked with organisations throughout the sector, from rolling stock companies to train operators and builders. From its base in Gateshead, UK the company operates globally and has over 60,000 LRUs (line-replaceable units) in service and more than 30,000 cameras in service."

[smithie6] 20/4/2024 22:24

thanks for your text/post

[pldazzle] 19/4/2024 15:41

The loss-making subsidiary, PJL, is the principal company in the group; the others (QRO and RTS) are relatively recent add-ons. QRO's business is ANPR and it has been very successful, growth appears to be continuing and long may it do so. RTS is meh, certainly nothing special considering they paid £1.8 million for it, but not a complete disaster. PJL has been very profitable in the past, but more recently has been hiding its light under a bushel. I don't think this is mainly because of the defence division, which I believe has been downsized anyway, but because of recent turmoil in the rail industry which has translated to an order famine. With CR7 (the new five-year financial control period for the rail industry) having started just three weeks ago, that should lead to fresh orders from train builders in due course: historically, each such order has typically been well into seven figures.
So I am looking for a recovery in the rail division, which should eliminate the losses in PJL. Hopefully within the next 1-2 years. The group should then be highly profitable. I don't see much point in selling the defence division, and don't think it would fetch much anyway.
To answer your question more specifically, for the reasons given above I emphatically don't regard the losses in PSL as an ongoing situation long-term, although if push comes to shove I can live with maybe 1 more year. Even after the recent price rise the market cap. is now just £4.3m. That looks very cheap, given the potential which I see as well over £1m pretax.

[smithie6] 19/4/2024 13:22

not sure if your post replies to my post

or what point you are trying to make )& perhaps haven't made very clear)

from post 1801
"Petards has three active subsidiaries: QRO (ANPR), RTS (rail software) and Petards Joyce Loebl (rail systems and defence).

Per Companies House, in 2023 the results were (turnover/pretax/post-tax):
QRO - £4.422m, £588k, £535k
RTS - £611k, £2k, £22k (so it's relatively minor)
PJL - £6.09m, loss (£725k), loss (£329k)
Group, no doubt reflecting intra-group turnover, head office charges and other adjustments - £10.872m, £178k, £524k."

my question was what did people think about the loss making subsidiary & whether one option might be to sell it so that its recent losses would not be a drag on the group, if that loss is an on-going situation.

What is your opinion ?

------

I am new'ish to PEG, (but sitting on a nice profit. :-) ), happy to see any opinions.

[pldazzle] 19/4/2024 09:12

smithie6, I wonder with respect if you may have got the wrong end of the stick.

I have been following Petards for nearly 15 years.

The main rail subsidiary has always been Petards Joyce Loebl (PJL), which also - albeit as a poor second - handles the defence activities. Meanwhile RTS Solutions, acquired only in 2018, is a smallish subsidiary dealing with "rail asset management, logistics, planning and business workflow applications" (as distinct from installations on actual trains etc) and serving the rail infrastructure industry, whereas PJL's customers are typically train builders such as Alstom, Siemens or Bombardier. While RTS has not performed outstandingly since acquisition, it has kept its head consistently above water, but it's minor in the greater scheme of things.

In the past PJL has had substantial contracts from train builders. A few random examples:




Note that the history of these chunky train contracts goes back many years before the RTS acquisition. For the time being they have dried up (again, I don't think that is so much the case for RTS), but in my view there are good reasons for optimism that this will prove temporary.






To repeat: both the main rail activities, and the defence activities, are within PJL: however, rail is a great deal larger than defence, quite apart from having greater potential.

[smithie6] 18/4/2024 22:06

see post 1801

[pldazzle] 18/4/2024 17:34

Smithie6 - what evidence do you have that there is a separate subsidiary dealing with the defence/MOD activities? I don't see any. More importantly: As I understand it, the defence division - at one time quite large, though on low margins - has been shrunk and is no longer as significant as it used to be. The main lossmaker appears to be the rail activities: that has to be down to an order vacuum for new trains, due to the political turmoil in the rail industry coupled with the end of Control Period 6 (CP6) which governed capital purchases up to the end of last month. I would expect orders to recover relatively quickly now that the new CP7 has started . See my post #1801.

[smithie6] 18/4/2024 15:24

the subsidiary doing products/services for the UK MoD, loss making in last accounts.

What do people think of this subsidiary ?
Could it change its losses to profits ?
Would it be a good idea to try to sell it ?
(& then concentrate on growing the most succesful subsidiary, the ANPR subsidiary ?)

[smithie6] 17/4/2024 13:08

Someone keeps hitting the buy button.
Including last 3 trades, 10k shares, then 5k, then 5k.
(As I understand it one is not officially allowed to do that, so the MM might get a bit riled. But I guess the MM(s) can just move it to "no trades" if they want & force orders to be submitted as limited price requested trade orders, & just ignore the buy orders, until some sell trades go thru.

I assume that the buyer is certain that those Alsthom trains/wagons will order the CCTV from PEG and that every wagon will have CCTV. (Pretty std nowadays I think for new train wagons).

[smithie6] 17/4/2024 12:41

Btw
...the drag on past performance has been the defence sector part of PEG.

What do people think that might happen with that subsidiary in '24 ?

Might it pick up some work from the conflicts in Ukraine or the middle east ?
Or might PEG sell the subsidiary?

(As far as I can see it is doing one offs & support tasks for the UK military but very small quantity. And very difficult to make money from that imo once you deduct office costs, secretaries, accounts, directors, advertising, travel, pensions, etc. And surely virtually impossible for this subsidiary to create a product that could be sold in large numbers to the military since the R&D cost would be too high to afford.
I applaud the subsidiary for the range of skills they have, including TEMPEST, EMC, UHF, VHF, microwave, displays etc etc).

-----

The subsidiary doing automatic number plate recognition (& other similar stuff) is the subsidiary doing well.

[rivaldo] 17/4/2024 11:57

Perhaps a little buying has been coming in on the back of the overnight news that the UK's largest train factory owned by Alstom (a PEG customer) has been saved with a government order of ten commuter trains...

[packman8] 15/4/2024 16:10

Anybody else had a call from the Meridian Group(USA) offering to buy your shares. The women mentioned I think £18/share Obviously a scam as this would be valued at 1 billion plus.

[rivaldo] 23/2/2024 07:11

This morning's RNS shows yet another new major shareholder who's been buying and now has over 3% - John Peter Lobbenberg has 3.2%, or 1.82m shares:

[the oak tree] 21/2/2024 19:27

Thanks pldazzle for that analysis.