Phsc Investors - PHSC

Phsc Investors - PHSC

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Phsc Plc PHSC London Ordinary Share GB0033113456 ORD 10P
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 14.00 08:00:00
Open Price Low Price High Price Close Price Previous Close
14.00 14.00 14.00 14.00 14.00
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lehibou: I was looking through the AIM 100 in the IC and I noticed MARLOWE (MRL).This is a company that has rapidly expanded in the fields of health and safety,fire safety, water treatment,law, occupational health and air quality through numerous takeovers of smaller companies .Quite a conglomerate and reminds me of the Slater/Hanson era although Marlowe are mainly using cash plus earn outs. I wish them well, but the point of this rambling is the prices paid and the relevance to PHSC. All millions Company Revenue PBT Net Assets Price Paid Solve Not disclosed (HR and employment law) Managed Occupational 4 0.6 0.6 1.8 up to 3 Health Eurosafe 3.4 up to 2.5 Law At Work 5.4 1.0 2.2 6.3 up to 10.3 (subscription based employment law and Health and safety) Fire and Safety 4.3 0.6 1.2 2.4 up to 2.7 Systems Ltd Quantum Compliance 4.5 0.5 1.0 4.0 up to 7.2 (health and safety) Current Market Value PHSC 4.43 0.28 5.3(?) 1.5 (inc 0.7 cash) So what is my point. Marlowe seem to have a penchant for buying small companies that help others with the necessary but “irritating221; aspects of corporate life. If PHSC can ever turn around the security subsidiary (or sell it) then their profits should be nearer the £0.5mi level. Their worth as a stand alone company or as a purchase for another would in my opinion be in the region of 25-30p. A purchaser would surely be able to substantially reduce the Head Office costs. Do not be mesmerized by their net assets as they must surely be reduced by more write downs from the security side. Again courtesy of the IC, I noticed a quote from Stuart Widdowson (a manager of a small companies fund) “We look at whether a company would be worth more to a trade buyer or a private equity investor” N.B All the Marlowe and PHSC's figures are pre COVID 19 but I think this demonstrates that when normality(?) returns and Health and Safety are still paramount in both company and public minds, then a re-evaluation could occur. I have a holding and after my own analysis have bought more. I am happy with my position and the income stream (final might be passed as per other companies!),and view it as a long term holding but would not fight too hard against a takeover at the right price. But these are my musings. I would be interested in other thoughts. As ever DYOR please, and not take the above as an investment recommendation. I am using my own money and my own research for better or for worse. Again I repeat DYOR. ,
cjohn: Obviously, writing off goodwill makes no difference to the economic reality of a company. It's an accounting item. And I can't remember a case of writing off goodwill actually IMPROVING investor attitudes to a company, hence producing a price rise. Sometimes, where the market has unrealistic expectations of a company, which is therefore trading at very high multiples, writing off goodwill may as a shock induce a sense of realism in investors, who then sell out and so the share price drops. I wouldn't expect that to happen with PHSC. Sentiment is already negative towards the security division. If they had a sustained period of decent trading, then the share price could appreciate significantly.
michaelx105: Does anyone know if they ever attend investor shows?
microscope: Thread re-written due to issue with previous header. It's been over 12 years on the current active thread.. So i think PHSC is a deserving candidate for a new makeover! The company is involved in Health and Safety, and the parent company has grown by acquisitions over a period of about 30 years. One of them (all will be revealed later in this post...) is a hidden gem imho, and the key reason for my investment here. There are eight sub-divisions, and a summary of each can be found in last month's interim results here: hTTps:// which showed an ebitda profit of just under 200k overall, and a dividend of 0.5p a share, with cash at period end of £129,000. With just under 14.7 million shares in issue, and a share price of a mere 12.25p at the time of scribbling this, the market cap is a miniscule £1.9 million, so the dividend is unusual for a company of this size. Pro forma nav was no less than 38.7p per share at these interims. So you're looking at these numbers and wondering why the market cap is quite so low.. Something doesn't add up.... .....You're right of course. The catch is Adamson's laboratory, one of their divisions, specializing in asbestos management. It imports materials and the falling pound has hammered them. Despite hefty cuts and lay offs, parent management concluded that 'they are unable to come up with a successful turnaround plan, and as a result, one of the two plants will be closed, with disposal of the factory. Costs will be in the second half of the year, including redundancy payments.' The first half loss in that division was £71,500 including redundancy cost, and it's clear there's more to come. The other plant will move to an intermediary business with a skeleton staff. The 2016 finals included around a 500,000 writedown of the Adamson's business. However a note to the 2016 accounts said that it from then would have "zero carrying value" ie no further goodwill writedowns. So it will just be costs. Of course it will hurt the second half and therefore year end results. The spread can be brutal, anything recently from 0.5p to 3p, depending on which market maker is on the bid/offer etc at any given time. That's the bad news. The Better news is that six of the other seven other divisions are trading profitably (a couple of them marginally, the other four healthily), with strong growth in the B2B field. The only other losing division was a tiny 19k loss because of the costs of adopting updated accounting standards. It will be borderline I think whether they make an overall profit for this year given the Adamson's situation, but in six months time that will be behind them, and they will be able to sell the closed plant at some stage. Even so yield is 4% (xd currently) if they don't pay a year end divvy. One division really stands out for me. And this is where I would argue, very strongly, that PHSC's 'hidden value' is actually pretty special at the current share price, even accepting the short term difficulty of the Adamson's situation. Here it is: (Remember this is just for SIX months!) QCS International Limited Invoiced sales of £372,100 yielding a profit of £145,900 (the figures for the same period last year were £258,600 and £67,300). And then you read the statement "There are high expectations that QCS will continue to exceed targets for sales and profits in the delivery of quality management consultancy and training services. Sales are already looking promising with high levels of training already secured, and additional income expected from new consultancy projects recently won" I can assure you, Stephen King (CEO of overall company PHSC, and very experienced, also owns about 22% of the equity) is a born pessimist, I followed this company back in Ofex days some 15 or so years ago. it's the most bullish statement I've ever heard from him. Were QCS ever to be floated off, it would imho on these numbers float comfortably for a whole lot more than the entire £2 million market cap of the whole company (and that is why goodwill and nav is actually valuable in PHSC's case). For anyone able to take a longer view, the market cap looks to have discounted far too much. net assets are in the region of 25p a share and although cash is £129,000 at the report date, the fact they felt able to pay a healthy divvy suggests it is not a concern. They have a guaranteed but uncalled up loan of £300,000 from HSBC too. If they ever took the business private (a stick posters have used against them for ten years) shareholders would imho certainly get more than 12.25p. Won't happen in my view anyway, they could have done it years ago and have never shown any interest in doing so. You almost invariably get a warning sign of these situations, a company will start moaning about listing costs. Has never happened here. I could see them making £250,000 when they announce the interims in a year's time, with a decent second half ahead. As always, dyor, caveat emptor and all imvho. All info in this post is in good faith, but I am an amateur investor, so please verify for yourselves and am happy to correct or update any errors/omissions that you spot.
microscope: Always liked this company and its well run business, but in this case sledgehammer/nut come to mind. Tactless, arrogant and dismissive of long term shareholders imho. Maybe we should forgive this one botched episode, but if private investors conclude otherwise and sell, management can hardly complain.
smithie6: "Now most investors have been in PHSC for the last few years on the back of the high yield " each to their own views but imo the facts dont agree with your post the share price has doubled over last 2 years. not because of the divi yield imho. ----- Any holder has made much more from share price increase than from the divi. ---- (anyone that picks shares based on divi yield has got it all wrong imo but each to their own (selling a few shares is another option if need some income)) ---- "the bank balance stood at GBP523k at the end of October 2013. " approx. 2.4M of receivables...about 1M higher than payables imo should just have borrowed from the bank say 1/2M just for 6 months perhaps as wait for some of receivables to be paid ...but since the results were good imo the dirs. fancied a bit of insider trading and issued themselves some new shares ...which with tax rebate perhaps cost them 15-18p looks like imo, "easy money"...and imo morally questionable --- and if dirs. are not caning PIs via filling their pockets with cheap options or shares at good moments......they are involved in cases of fraud or false accounts (CPP, Lamprell, Speedy, INVU, Photo-me, OCH ...the list never ends !!).....and/or related party transactions like giving jobs to wives and family (DQE, SDL, OCH, ILX etc) or renting offices to the co. or via making IPOs that are rubbish, often using IPO docs. that are blatant misrepresentations to the market ....imo AIM is a cesspit and not making any changes to try to solve the problems
battlebus2: This was a case of it all being too late, now as a shareholder if they didn't issue a placing the cash would have had to come from somewhere leaving us with no dividend. Now most investors have been in PHSC for the last few years on the back of the high yield so with no dividend the shares fall people sell and the shares fall further, not a vote of confidence that an over subscribed placing had. Parity in the share price has now been restored and imo for this company the placing was the best outcome to have let all P.I's invest would have taken too long and cost much more. I can live with a little dilution if my shares are worth the same and i'm still getting a dividend.
battlebus2: Looks a bargain as you can buy for 29p which is just above the price the major investors paid for the recent rights issue.
battlebus2: £520k raised to provide working capital, at 25p no wonder it was oversubscribed. Northland capital have warrants for 100k at 45p. On the face of it probably a better deal than the banks and symptom of growth which should flow through to shareholders eventually. PHSC plc ("the Group"), a leading provider of health, safety, hygiene and environmental consultancy services and security solutions to the public and private sectors, is pleased to announce that the Company has conditionally raised GBP520,000 before expenses through a placing of 2,080,000 new Ordinary Shares of 10p each (the "Placing Shares") at a price of 25p per Placing Share (the "Placing"). The Placing was oversubscribed, primarily taken up by institutional investors, and included Director participation. The Placing Shares represent approximately 16 per cent. of the enlarged issued share capital. Trading update Management accounts for the first five months of the Company's financial year (unaudited), covering the period to end August 2013, show sales of GBP3,088,000 and EBITDA of GBP233,300. The comparative period for last year showed sales of GBP 1,766,000 and EBITDA of GBP50,700. Use of proceeds The net proceeds of the Placing are expected to amount to GBP482,000 and will be used as additional working capital to fund the continued growth of the Group. With this new funding in place we are confident that we can overcome the cash flow constraints that have been impacting the business. On behalf of the board I thank our investors for the confidence they have shown in us, and look forward to justifying their support through performance."
battlebus2: I agree GHF the dividend should be atleast 2p i'll also be watching for further buoyant trading conditions which should send the shareprice a lot higher. I've also noticed another buyer other than yourself and on my PHSC thread on Fool a guy called Storybooks has joined us so other investors are starting to notice. Unless it's your username or that of another who posts here?
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