Petards Share Discussion Threads

[tiltonboy] 18/4/2016 12:42

Hybridan forecasting EPS of 2.1p for 2017. A p/e of 6.8 which is a 50% discount to the sector.

[rivaldo] 15/4/2016 10:28

Beaufort Securities this morning on PEG:

"Petards Group (PEG.L, 14.25p) - Speculative Buy

Petards announced that it has acquired the entire issued share capital of QRO Solutions Limited (QRO) for a maximum consideration of £1,255,000. The consideration, which will be satisfied in cash from Petards existing cash reserves, includes deferred consideration of £140,000 the payment of which is subject to QRO achieving revenues of at least £1,750,000 and profits before tax of at least £240,000 in the year ending 30 November 2016.

QRO (www.qrosolutions.co.uk) was established over 15 years ago providing end-to-end Automatic Number Plate Recognition (ANPR) security and speed enforcement solutions to UK police forces and to integrators serving the police and security markets. QRO's systems integration expertise enables it to offer fixed site, mobile, re-deployable and hand-held ANPR systems which can be integrated into its own back office management suite of software; Check-IT ANPR, Check-IT CSGS, Check-IT Handheld and Multimedia Vault.

QRO, which employs 11 permanent staff all of whom will remain with the business post acquisition, will strengthen the Group's offering and provides a strong service-based operation with recurring revenues on which to expand further into the Emergency Services sector. It will provide Petards with an entry into fixed site ANPR and complement the Group's existing ProVida range of mobile in-car enforcement products giving greater critical mass to the overall business and a wider customer base in the UK and overseas markets. In the year ended 30 November 2015 QRO generated revenues of £1,784,000 and profit before tax of £101,000. Over 25% of its revenues related to recurring maintenance and similar contracts. At 30 November 2015 QRO had net assets of £683,000. The QRO balance sheet at the date of acquisition includes cash balances of £876,000.

At yesterday's AGM the Company reported that trading in the first quarter of 2016 is slightly ahead of management's expectations with both revenues and results being above those for the same period in 2015.

Our view: This acquisition marks a first step towards expanding the Group into a broader earning base and the Board is continuing to pursue other earnings enhancing acquisitions. We regard this acquisition as positive and an excellent add-on acquisition. We regard and welcome this as a start in a 'build and buy' strategy.

We are encouraged by the trading in Q1 ahead of 2015 and note the increase in revenues is being seen across all of the Group's product areas. With a number of new order prospects currently being negotiated and strong backing from the Group's existing order book, we are further encourage that the Board anticipates that both the first half year and full year results will show good progress against those achieved in 2015. Therefore, we maintain a Speculative Buy rating on the stock."

[tiltonboy] 15/4/2016 07:50

dealit,

I'm not certain whether Abdullah intended to take control of PEG, but his hand was rather forced by the bank. If it was what he intended, then he played a blinder for WTH holders. I converted my loan notes and sold the ords when they spiked over 20 a couple of years ago, but retained the other ords.

The other loan notes are a potential overhang, but hopefully we might have a different company on our hands by the time they get converted.

[dealit] 15/4/2016 07:34

Did not Petards have there banking facility withdrawn in 2013 and that Water Hall issued the convertible loan notes to stop Petards going bang. Raschid Abdullah being involved in both Companies, was it not a reverse takeover.

[barnetpeter] 14/4/2016 23:52

yes indeed .....but it is still a significant overhang. I doubt I will convert until the last minute because of the 7 per cent.....but if the share price goes above 20p I will be tempted. The Water Hall deal was very good for holders of that stock.

[tiltonboy] 14/4/2016 22:57

Some of the loan note has already converted, but on full conversion there will be another 20m shares in issue, taking the total to 55m. Of course that figure may be immaterial if they issue shares for any future acquisitions.

[rhomboid] 14/4/2016 21:32

Note 17 from the accounts;

"The convertible loan notes of £1 each carry a fixed interest rate of 7% per annum and are convertible into ordinary shares of 1p each at any time prior to maturity. The conversion price is 8p as compared to the market price at 31 December 2015 of 12.25p. Interest is paid quarterly and the loan notes mature on 10 September 2018.
During the year £16,217 of the issued convertible loan notes were converted into ordinary shares (2014: £26,792). At 31 December 2015 the nominal value of the outstanding loan notes was £1,641,711 (2014: £1,657,928)."

So they cost 115k per annum in interest which will fall away on conversion , the shareprice more than discounts the dilution in my view.

[the oak tree] 14/4/2016 20:38

Hi barnetpeter

So forgive me, but I just want to make sure I understand this, your saying we could have alot of selling pressure up to 2018 as these people redeem their convertibles?

I don't suppose we know how much volume we are talking about?

[barnetpeter] 14/4/2016 15:30

Excellent deal.

Don't forget this. I had thousands in Water Hall myself; sold all the shares in Peg but have kept all the convertibles. I guess loads have and at a price of 8 pence they are going to be converted and sold when the price moves up. Last date is not until 2018.

Under the terms of the Offer, Water Hall Shareholders will be entitled to receive 12.5 New Petards Shares and GBP2 nominal convertible loan notes per 100 Water Hall Shares. The Convertible Loan Notes, details of which are set out below, convert into Petards Shares at a price of 8p, are unsecured, are redeemable at par 5 years from the date of issue and carry a coupon of 7.0 per cent. per annum.

[rhomboid] 14/4/2016 10:57

"Ear" means "earn" in iPad speak!

Link to accts

[rhomboid] 14/4/2016 10:55

I pulled the accounts for QRO solutions, they look a cracking business with very conservative accounts , if they perform as per the ear out this will look like a very cheap deal indeed, also done for cash which adds to the clear under valuation of the PEG equity.

I'm a very happy holder..automated surveillance and monitoring has to be a long term growth area worth having exposure to.

[rivaldo] 14/4/2016 09:54

Give it a chance :o))

The price is up 8.4% already today - a little bit of press coverage or attention and it should continue to rise nicely.

[tiltonboy] 14/4/2016 09:42

Disappointed that there was no follow through buying, and indeed sellers have now come out (no surprise), and the price has drifted off a touch.

[tiltonboy] 14/4/2016 09:00

I haven't got the full note yet, but they say that the target price of 20p puts them on a p/e of 10, so I would guess the e comes out at 2p.

[rivaldo] 14/4/2016 08:45

Cheers tiltonboy - do you have the new EPS figures for each year perchance?

Hybridan were already forecasting 1.79p EPS this year, so they should move up to nearer 1.9p EPS now.

[tiltonboy] 14/4/2016 08:16

WIRE have increased their EPS forecast by 5.6%, and 8.5% for the next two years, and have increased their share price target to 20p.

[junior21] 14/4/2016 08:14

Is that a hint of optimism tiltonboy?

[tiltonboy] 14/4/2016 07:42

This deal should see EPS estimates increased by around 15%, and with signs of activity, sentiment might improve. I've pushed out my sell limits by a penny, and scaled back the size, so I can share in a bit more upside.

[dealit] 14/4/2016 07:34

Yes indeed, maybe one day I will get my money back.

[rivaldo] 14/4/2016 07:20

Very nice indeed....:o))

- trading slightly ahead of expectations
- earnings-enhancing acquisition
- more acquisitions in the pipeline
- "strong backing from the Group's existing order book"
- "the Board anticipates that both the first half year and full year results will show good progress against those achieved in 2015."

The QRO acquisition is not only on a P/E of only around 8 assuming full earn-out - but QRO also bring in £0.9m cash compared to the £1.26m consideration!

[tiltonboy] 14/4/2016 07:17

That looks a stunning deal; an early present on my birthday.

A bit of praise due.

[tiltonboy] 11/4/2016 18:06

A couple of odd trades marked after hours!

[rivaldo] 08/4/2016 13:35

A 90k buy at 13.41p just reported is presumably delayed from earlier and the reason for today's rise.

[rivaldo] 08/4/2016 12:34

Hello....more buying interest today and PEG is looking good...

[tiltonboy] 07/4/2016 14:37

I think an accumulation of buys over the last few days has had the desired effect. It will be interesting if this rise provokes a few more sellers to come out of the woodwork. 14p has been resistance over the last couple of years, but hopefully we can break free of that....and enable me to sell a few!