Porta Communications Share Discussion Threads

[dbnout76] 30/9/2015 12:50

I don't know but we are heading got new lows here!!' Bloody aim shares should come with a health warning!!

[zipstuck] 30/9/2015 12:31

Will ne MD aquire or prepare PTCM for sale?

[jefftwo] 28/9/2015 11:47

When the dust settles and we have time to reflect it will be noticeable that many trading factors have been disasters and a couple have been goodThe debt is not a major issueLack of updates and communication is poorBoardroom salaries are disgracefulHowever I can still see an upside where revenue and market cap are very closeTherefore IMHO the company is undervalued but does lack market confidence

[adamb1978] 27/9/2015 11:19

The problem with the D&A point is that based on carrying values of the asset base of the business the expense wont reduce for years. The cash cost of investing in intangibles and PPE is a fraction of the D&A charge so cash EPS far outstrips accounting EPS....but that will continue for years, and it takes investors to apply their brains more to look at cash EPS rather than accounting EPS.

Even worse about the D&A charge is htat the majority of it relates to amortisation of customer relationship carrying values, so highly theoretical assets. With having checked it, it appears to me that the carrying value of these relationships were over-egged on acquisition when they did the PPA exercise and exacbeating that, they're amortising it over a seemingly long period. These sort of assets should be amortised over say 3-5 years.

I'd actually welcome them writing these assets down to a more sensible amount in one periods results and therefore reducing the ongoing D&A charge. They'd have to admit that they overpaid for the assets but then would at least get a cleaner P&L going forwards

[guildedge] 25/9/2015 17:08

@ go baby go - Not delivered again??? Most of the loss is due to D and A. Mostly over revaluation of client lists from the new purchases. Remove that 1.2M and the figures are much more rosier. Add on 1m cost savings then the numbers soon look much better for next year. Reduce loan costs too and you see a very healthy firm.

Why do they need to do a discounted placement?? They are cash generative to the tune of 700k. Most of the 80-90% of the loss was not a cash loss. Bit like Tesco or Sainsburys downgrading the value of their land stock.

@ Salpara111 - Failed analyst presentation??? - How can you say it failed??? It's barely been 2-3 days since the event. Give them time to number crunch. Were you there to know how good/bad it went?

Overall we knew Ebidta before the result was around 700k-1M. We just didn't expect the costs and other issues to crop up.

The video from DW is somewhat positive. I am not against further acquisitions is they add value to the part of the business that are doing well. It could well happen with the right terms.

I think once you sit back and look at the figures they are not as bad as people paint them. Even Sanlam is expecting 2nd half of year to grab back 750k of this 1.5M loss. The balance sheet of Porta next May should show improved cash reserves.

[salpara111] 25/9/2015 13:03

Well, the analyst presentation has clearly failed, no new notes and no buying.
Sadly it does not appear that we can rely on management to swoop in with large buys to support the share price so I guess it is going to drift along between 6.5 and 7.5p for the foreseeable future.
Earlier in the year I thought that Porta was going to deliver a very happy Christmas but it would not appear to be the case.

[speedsgh] 25/9/2015 12:00

Porta Communications CEO says integrated approach paying off -

Nothing much new in there. Doesn't rule out further acquisitions should the opportunity arise, even at the current share price, although he does suggest that funding would have to be 'creative' i.e. unlikely via share issue.

Not the most polished of performances by the CEO (or the interviewer). The share price is currently saying that investors don't believe in the current strategy or the company's ability to execute to the benefit of all. Only time will tell.

[zipstuck] 25/9/2015 07:44

Don't think acquisitions will be made soon if the goal is to cement the business.

[go_baby_go] 24/9/2015 21:31

Not delivered again. This is all very worrying imo. They can not do any further acquisitions unless the share price gets above 10p. My fear now is that they my well do a placing with the institutions at a discount to today's current share price

[qs99] 24/9/2015 21:05

ok but still c.£17m MARKET CAP and c.£7m debt? and you tell me what you reckon EBITDA will be.......if they do as Sanlam you say, DYOR etc. £2.7m then is that good value or not? £24m EV vs £2.7m EBITDA expected not delivered?!

[guildedge] 24/9/2015 21:00

Massive increase in turnover is mainly due to Publicasity and PPS figures now included. I guessed around 16M before results. 12M from existing plus 4M from new firms. So 17-18M is about fair.

They are losing some clients based on the market reports many have posted from Gorkana. Of course reports posted on websites don't show you the new work existing clients are putting Porta's way. You only have to look at Australia to see this. Plus losing 3-4 small clients may be offset by 1 large client win. Fact they are focusing on bigger firms is encouraging. Small firms can often offer low margins. Porta also have a new firm to cross sell products to as well.

China is a large market for Porta to tap into. If they were doing badly there they would not of kept it. There must be thosands of firms in China needing Porta's services.

I think Sanlam is predicting around 2.7M edbidta. 4M is unlikely.

As for seller or no seller who knows. Lots of people have been selling shares lately. You only have to look at other shares to see this. Investors are very nervous in all shares. If the share gets too cheap directors will pile in again.

The current mark down is harsh in my view as most of the loss was not cash related. If it was how would they be cash generative? Plenty Porta can do here to improve the numbers.

Let's wait and see what came of this analysts meeting too.

If they can reduce D and A, reduce debt costs and make the 1M savings you can fast reach a profitable porta in 2016. The execs know what they are doing.

[kimboy2] 24/9/2015 14:12

Well theway I look at it is they made £1.33m Ebitda once you take out the acquisition costs. The second half is always better so I expect the total ebitda to be about £4m.

If we take out interest of £1m that will leave about 1p per share ignoring D&A.

That is with nothing from advertising.

[pelliot] 24/9/2015 13:19

Not very pleasant to call someone a moron, anyone can make a mistake - such as investing in this stock. On 11 Sept. you wrote "I am bullish, clearly it is down to the seller to be holding stock back. Would back Bob Morton when he buys in in size, alongside the other directors buying in. Results are key"...and you call someone a moron for bad grammar! Hardly the issue here?

[elcapital] 24/9/2015 07:44

I am disappointed at your spelling and interpretation

WTF does China have to do with it?

There?It should be they're......moron

How does such a massive increase in turnover mean they're losing clients.?

I think you are an idiot

[karm] 23/9/2015 13:18

I'm disappointed full stop..there losing clients, and with the slow down in China I think its only going to get more difficult there for them. We've had a large share dilution and DW is pulling in a salary of £250k,...

[salpara111] 23/9/2015 12:36

The only good thing is that they will not be able to make any more acquisitions for the foreseeable future as I very much doubt that any of the big investors will be willing to buy more shares after last years big fundraising.
They now need to prove that they can grow the business organically which they do seem to be doing but the main issue which was not addressed in the results was the falling margins which is a major issue for me.
Like pretty much everyone I am sitting on a loss.
I will continue to hold for the moment but if I see another more attractive looking opportunity I will take my loss and move on.
Overall, this has been a pretty disappointing investment for me.

[kimboy2] 23/9/2015 11:44

As long as they are making acquisitions they are going to have one off costs related to that. The main point from the exceptionals are that start up losses are now zero.

The main problem is that advertising is not performing. Indeed last year it pretty much blew up and was closed.

[qs99] 23/9/2015 06:29

trouble is when reading their tables that the "one-off" costs appear in all 3 columns....makes you wonder how "one-off" they are and therefore credibility comes into issue...I do hope they continue growing top line and refinance debt so they can make progress as I am a small holder...

[guildedge] 22/9/2015 23:01

Pelliot - You couldn't of posted that earlier? It was very difficult to find on web using google. Even given that the share is still heavily under valued.

The debt is still manageable here and can probably easily be reduced. They have options to turn some of that debt into shares. Plus 3 million of the debt is with BM. So I don't really see debt as a major issue. The key will be how the 2nd half of the year goes. They seem to be sorting out their finances. Hopefully they can reduce some of the rates on this debt.

I suspect the presentation today was about securing more backers. Be interesting to see what that brings. Did anyone go to the presentation?? Will any institution bite??

[pelliot] 22/9/2015 20:43

@Guildedge - broker was issued at 8.05am"Adjust our estimates: Higher costs from Media and Advertising, interest charges, depreciation and amortization (non-cash item) encourage us to adjust our FY15/16E. We leave our fee income estimates unchanged, but reduce our FY15E EBITDA to £2.7m (previously £3.0m), PBT to -£0.76 (previously +£0.2m) and net debt of £5.9m (previously £5.1m). For FY16E, we reduce our EBITDA to £3.5m (previously £3.1m), PBT to -£0.3 (previously +£0.6m) and net debt of £4.8m (previously £3.9m). Refinancing the debt at a lower interest rate (currently 12% coupon) would filter down to the bottom line. A review of the group's depreciation and amortisation policy is possible."

[guildedge] 22/9/2015 20:18

I would be positive for second half. A lot of these costs are one off and won't be faced in 2nd half of the year. It's likely the result for the year may be a loss but I think they may claw some of this 1.5M back with strong under lying cashflow now. There is no reason why they can't generate 700-800k cash in next 6 months. Maybe more if there are less costs. Ebidta for the year could well reach 1.6M. Pretty sure this finance cost relates to the 2 large loans they have. If they get a cash investment from an institution you could well see a lot of that loan wiped out. Adding 300k to the bottom line. To date BM has been reinvesting his money from the loan back into the firm. So not all bad news.

I have been looking at some other Aim shares and some have been hammered 10%+ too. It's a bear market out there. At some point the buyers will return. When they do Porta will climb again. Harshly marked down today in my opinion.

[markie7] 22/9/2015 20:15

Lot of debt to refinance in 2015/2016.

[qs99] 22/9/2015 19:56

Don't forget c.£19m market cap plus debt, will be interested to see what the forecasts are for the year for underlying EBITDA...and yes market massively off as well, so jam tomorrow story may be too risky for some. IMO/DYOR

[guildedge] 22/9/2015 17:17

@ Pelliot - There has 100% been no broker report today. Why do you make this stuff up??? The market as a whole is down heavily. The results show they have positive cash flow to the tune of 0.7M. The main reason for the loss is Amorisation and depreciation. I have not delved into the figures too deeply since I have got back. The second half of the year should be much stronger.

The share price is down today but from what I can tell the market has been hammered nearly 3%. At this price could you blame the directors for buying in? See what happens.

[zipstuck] 22/9/2015 13:31

Bob Morton is a good businessman.

It's now cash generative with more of the £1m savings to come.

if the business was valued on Revenue multiples it's wort a lot more.