Pressure Technologies Share Discussion Threads

[my retirement fund] 03/10/2022 18:35

I remember he engineered a takeover at a considerable discount to the share price once, and know full well he's never a man to overpay. So if he's here to step in with funding for a discounted placing, you can expect to get royally shafted.

[cerrito] 03/10/2022 18:10

Not a name I have heard of in the recent past. Some years ago he was an important shareholder in an AIM company I had shares in,cannot remember which. My memory was that the thinking was that he would be proactive but in the end he did nothing but the general thinking was that it was a plus to have him on the register.
His presence here gives me confidence.
Those who bought a few days back in the mid 20's will have done well.

[babbler] 03/10/2022 11:42

Peter Gyllenhammar AB takes over 3%

[40 fathoms] 03/10/2022 11:03

@cerrito, your recollection is indeed correct, I have just checked the annual report and it states the following

"The Group’s RCF was drawn at £4.8 million at the year end date. These bank borrowings are secured on the property, plant and equipment of the Group (see Note 13) by way of a debenture. Obligations under finance leases are secured on the plant and machinery assets to which they relate."

We know from last weeks update that RCF has been reduced further to 2.4 million, so given that it appears that this number is fully asset backed I tend to agree with Baner as it seems to me that (certainly in the near term) the net debt position appears to be far from terminal.

The risk to my view is they have lowered the net debt figure via the AP or AR lines. I suspect that is not the case but I happy to acknowledge the possibility.

[my retirement fund] 03/10/2022 10:24

Well perhaps you better mosey on down to the bank and let them know baner, they will be grateful for your insight. LOL !!

[baner] 03/10/2022 10:03

cerrito

u r probably right but it still leaves PT in a comfy position, given the low level of net debt.

[cerrito] 03/10/2022 09:49

40 Fathoms
My reading of the footnotes is that there is a debenture over the Meadowhall Road site which was revalued at the request of the bank.

[tresham] 03/10/2022 07:25

It will be interesting to see who bought Miton's shares. We should know soon.

[baner] 03/10/2022 07:07

40 Fathoms - many thanks for your excellent analysis - i totally share your views and ideas re this and suggest that My Retirement Fund skip the ”fund” part and do just that from this forum.

[40 fathoms] 01/10/2022 13:19

While I think of it another thing that we might be overlooking and I confess I do need to check this to be absolutely sure, but I think freehold without any mortgage they still hold the main CSC site at Meadowhall Road in Sheffield. Again from memory, after an impairment of @600k taken in 2021 it was on the books with a carrying value of @3 million.

[40 fathoms] 01/10/2022 10:21

I am not sure I get your point about lease and pension liabilities. The company runs a defined contribution and not a defined benefit pension scheme so there are no unfunded liabilites and contributions are run through the profit and loss account.

As for the lease liabilities, although under IRFS 16 you need to accrue a liability on the balance sheet for the complete term of any lease agreements, the cash costs are still met on an arising basis, so if we include the sale and leaseback announced a few months ago this will be @ 720k per year on a go forward basis and again this is and will continue to be captured in the profit and loss account.

As a reminder the business was profitable in the second half just finished and we can cn see that net debt was reduced by GBP 1 million across the year although we don't have the AP and AR numbers at this point to understand to what extent they have been used to finance that improvement. The key issue, as it has been for sometime is the PMC business, which is clearly still unprofitable and is not forecast to return to profit until Q2 of this new financial year. The question now is can you rely on the management forecast that 2023 will be profitable and cashflow positive ? The degree of any trouble depends very much on this assessment being correct, I foresee a smallish CR @ 1.5 million or the sale of the PMC division as sufficient to put things back on track. Clearly, if management is way off with their forecast, then then towards the end of 2023 other more negtive scenarios will open up.

I am pretty certain the Harwood boys will be providing assistance, maybe a sale of the PMC devision at a knockdown price to Avingtrans is on the cards.

[my retirement fund] 01/10/2022 07:19

You can see there is a problem with working capital because so many projects and orders are delayed. You would only expect the scenario you mentioned where you have all your capital tied up in current work to be either completed or delivered. So doesn't take a rocket scientist to see the problem. As for breakup value. Complete nightmare for anyone, I mean how deep would your pockets have to be? You've got lease and sale and le ase liabilities and pension and staff then debt liabilities all over the shop before you even begin to think about working capital requirements. I suspect there's a good chance of insolvency here now, particularly if interest rates zoom up as predicted.

[40 fathoms] 01/10/2022 04:45

I think the technical term for what Premier Miton have done this week is "puking".

As a reminder the two covenants referred to in the RNS are :

Financial covenants from September 2022:
○ Leverage test: Net Debt to Adjusted EBITDA < 3.0 times
○ Interest cover test: Adjusted EBITDA to Net Interest > 4.0 times

Covenants tested quarterly using rolling 12 months trailing EBITDA & Net Interest

Failure to meet these conditions on a 12 month rolling basis, given the large first half loss and small second half profit, are not in and of themselves that concerning. To make a proper assessment of the situation we need more information particularly as it pertains to cash flow and working capital needs. If the outlook for FY is as predicted in the RNS everything will be fine, however there is limited room for any additional slippage.

[baner] 30/9/2022 15:19

the break up value is way way higher than the "as is" value, with ENORMOUS central costs incl those of being a plc. so i totally agree with jotoha - this will be taken over, sooner rather than later - as indeed there is very good technology within the group.

[jotoha2] 30/9/2022 08:41

Looks like it will be taken out and become a private company , great technology but BOD lacking in ability .

[my retirement fund] 29/9/2022 18:52

Company been reduced down into a worthless penny dribbler.

[my retirement fund] 29/9/2022 18:50

Mitton dumped near 5% just another 4% left to dump. Clearly they will take what ever they can't get for it. What a sad thing to have to watch. Hope directors are finding it difficult to sleep at night for such disgraceful management.

[wilmdav] 29/9/2022 15:29

Yes, a rights issue would be my guess.

In which case they might as well make the most of it and get rid of all the debt! I would be inclined to take up my rights and stick it out for the long term.

[stalker_boy] 29/9/2022 13:45

Maybe because of this:

As a result of the expected adjusted operating loss for the full year, the Group now anticipates that it will not be able to meet the requirements of the two existing financial covenants contained within the current facility. These covenants relate to leverage and interest cover and a first test is currently required at the end of October based on full-year performance to 30 September 2022. The Group is currently in constructive dialogue with Lloyds Bank regarding these covenants and ongoing facility requirements.

Financial worries in these markets tend to lead to massive dilution

[stalker_boy] 29/9/2022 13:43

No Director buying after such a drop does not look good.

[jotoha2] 29/9/2022 11:36

8p is the number soon enough .

[andyview] 29/9/2022 07:14

I’ve added a few, let’s see how we go…

Gla

[danmart2] 28/9/2022 20:08

I think we have further to fall, the market cap still looks slightly heavy since the revelations of the RNS

[meijiman] 28/9/2022 19:08

The BOD have proven useless..heads must roll after this shambolic set of results.

[baner] 28/9/2022 18:53

Arthur - u r spot on ! CSC is worth a heck of a lot if not part of the PT group. It should fetch as you suggest and this would leave PT with 15m in the bank and a business that should turn around nicely from 2023/24. Very sound risk/reward. Having said this, the company clearly need a BOD focussed on delivering values to shareholders.