Petards Share Discussion Threads

[rivaldo] 21/4/2017 14:25

Good to see the share price climbing before the AGM trading statement next Wednesday.

[bookbroker] 20/4/2017 08:30

This has to be a takeover target at this price, on the basis of prospects ahead, cash, position in market, and the likelihood of improving margins this needs to be shaken up, a mere morsel at this mkt cap!

[cockerhoop] 12/4/2017 11:17

That's not true - their contracts tend to be with the manufacturers.

[bookbroker] 12/4/2017 09:47

Hardly off consequence to PEG, they supply transport operating companies, not as such manufacturers!

[rivaldo] 12/4/2017 07:51

PEG are already well in with both Siemens and Bombardier, so perhaps this would give PEG further access to opportunities globally in preference to suppliers who provide for only one or the other company.

Such a merger will take a lot of time and effort in satisfying the competition authorities, so I'm not sure it will ever happen, and certainly not for a while yet.

[the oak tree] 12/4/2017 07:03

Siemens and Bombardier in merger talks for their train making business. Bombardier shares were up 6.8%Any views on this?

[noujay] 05/4/2017 08:03

Seems a pretty small disposal, more akin to some sort of tax adjustment than anything meaningful by the looks of it - albeit tax is always meaningful!!

[rivaldo] 05/4/2017 07:45

Tiltonboy, this is small beer stuff - it's £41k in total of which he had to stump up £7k anyway in conversion monies! And it's a very small portion of his holding, probably just to use up his annual CGT allowance given the timing. Completely insignificant really.

[tiltonboy] 05/4/2017 07:38

Saw the trade go through yesterday, and coupled with the exercise of the loan note, it was obvious that Abdullah had sold part of his holding. Perhaps a little disappointing that he sold more than he exercised!

[bones] 30/3/2017 10:38

I concur with you Rivaldo but I was simply giving my reasons for selling at the results. Had the Stadler contract win been announced on the same day, I would likely have stayed with it :)

Nonetheless, I would still look at how they conduct their accounting policies.

Regards
Bones

[rivaldo] 30/3/2017 09:29

Hybridan pointed out in a new note yesterday that:

- new client Stadler have recently won a framework agreement with Hungarian operator MAV-Start for "up to forty 600+ seater trains". More work for PEG perhaps?
- most of the Stadler contract will benefit 2018
- PEG are still trading at a discount to their peer group
- they see scope for a further re-rating "should the current run of contract wins continue"
- they go for 2.95p EPS this year (2.09p fully diluted)
- they forecast £2.8m cash at the end of this year

[rivaldo] 29/3/2017 23:17

Conversion is 18 months away. In that time, not only are PEG likely to have grown the current business substantially, but they may well have made acquisitions which further transform the company. By which time the convertibles may not make too much difference. And that's assuming all the loan note holders wish to mature anyway...

There's a balance to be struck between taking these things into account, and then letting them obscure the overriding point that PEG is a thriving business on a reasonable valuation and boasting a growing cash pile. And with big growth opportunities domestically and potentially globally - in both the rail and defence sectors.

[ny boy] 29/3/2017 23:13

What you frying bones?

[bones] 29/3/2017 20:10

Unfortunately dealit, there's another 20m+ shares waiting to be issued if all the convertible loan holders convert at 8p a share next year when they mature, not to mention the option holders. You have to follow the diluted EPS number for a realistic guide to performance.

[dealit] 29/3/2017 19:53

PEG have only 35.5 million shares in issue. If they keep developing their contract base as they seem to be doing, IHMO Peg will be a nice Company to have shares in.

[noujay] 29/3/2017 16:56

Well happy frying to us all Bones!

[bones] 29/3/2017 16:49

Noujay, it may just be interpretation of what is genuinely capital and what is a regular cost. The wages of software developers fall in the grey area and it is easy for software companies to capitalise what really are year on year costs of improving the product. That is the key. Had PEG not capitalised over £600k of their deveopment expenditure this year, profit growth might have looked a bit less spectacular. I imagine each year it will be necessary for the developers to keep on developing or else the company could lose their edge and then market share. Are these really capital costs? It's arguable either way.

All that said, it's a good company with a solid business and I would be comfortable holding it. It's just that I am frying a few other fish just now :)

[noujay] 29/3/2017 16:17

My read of the accounts was that cash generation was very good and would, had the company not ploughed a fair chunk (as compared to historical levels) into development then it would have been even better.Presumably going forward development costs will not be so onerous, and equally will return more cash, assuming the top line growth.

[bones] 29/3/2017 15:49

As previously disclosed at the results time, I took profits at 29p and got out, partly because of the lack of dividend comment but also because profits are heavily biased upward by generous capitalisation of software development adjustments (net of amortisation in P&L account). This in turn gives a balance sheet that includes (with goodwill) around £2M of intangible assets. I am not necessarily saying this is unreasonable from an accounting viewpoint, but it is an area of easy manipulation of profits and I feel that real cash profits and cash generation are still proving harder to come by if you factor out the intangible elements from the equation. Bottom line is, what are the real cash margins on these contracts?

Top line growth cannot be argued with however.

[bookbroker] 29/3/2017 15:28

Coupled with the fact that the small cos market is littered with earnings negative companies valued way above these with seemingly endless jam tomorrow stories, this here has decent cash flow and a steady earnings stream.

[bookbroker] 29/3/2017 15:24

QS - If you have had a good run, so be it, it's difficult to find decent small cos. doing well and having a pretty consistent revenue stream, these seem to fit the bill, and with decent contracts evolving they are hopefully still a decent buy at these levels, it's all about a steady earnings stream and that is where these appear to be doing good, so I bought a few!

[qs99] 29/3/2017 15:13

Yup good RNS and well done PEG. Am out for now, broker note from this morning thinks it is up with events, so talk of 50p IMO is one for 2018! am a big fan, just not sure it has more legs at the moment....GLA and will be watching from the sidelines!

cheers

PS put my profits into ZYT and PTSG today...

[p@] 29/3/2017 14:43

Convertible loan notes mature on 10/9/18.

[bookbroker] 29/3/2017 14:31

This looks a solid company, appears to have strong prescence in field of security products, good number of orders coming through, cash on balance sheet, and repeat business, opened a small position here, but I like the strong balance sheet and decent revenue streams!