For 4Q24 from the Senate database
Forbes Tate
registrations - Monumental Sports and Uber Technologies (not actually a new client but a client that was dormant for 2+ years coming back with much broader lobbying need)
terminations - Citizens for Responsible Energy Solutions ($20k in Q4), DS Admiral Bidco ($30k) and Public Service Company of New Mexico
Crossroads Strategies
registrations - Stephen P. Lynch ($70k), Lindahl Reed ($20k), Block Inc. ($20k) and Netgear ($20k)
terminations - Americans for a Clean Energy Grid, Biobot Analytics Inc., Hone Health ($30k), Marius Pharmaceuticals ($30k) and Port of Olympia
Alpine Group
registrations - Beta Technologies ($50k), AWS Public Policy, Americas ($40k) and Smith Bagley, Inc.
terminations - Amermin, Topsoe, Inc. ($60k) and Boston Scientific ($50k) |
Only one further registration since I last looked. Alpine Group has registered AWS Public Policy, Americas as a new client. The form goes on to say "AWS is a subsidiary of Amazon providing on-demand cloud computing platforms and APIs". Nice to have Amazon Web Services aboard as a new client. |
I checked to see if there had been any Q4 filings under the Lobbying Disclosure Act. The filings aren't due until 20 January or so. There have been three new registrations filed. Monumental Sports (Forbes-Tate) owns the NHL Washington Capitals and NBA Washington Wizards amongst others and is looking to relocate to a new stadium. Stephen P. Lynch (Crossroads) is a Miami based investor and has been rumoured to be seeking to buy Nordstream 2. BETA Technologies (Alpine Group) manufactures electric VTOL aircraft. |
Bit of a step change of 5p up on the day.
No reason evident for the change though. |
OpenSecrets data has been updated for Q3. Forbes Tate had Q3 revenue of $6.78m (+9.5% on Q323) and YTD revenue of $19.64 (+6.5% on 9M23). Crossroads had Q3 revenue of $6.21m (-1.4% on Q323) and YTD revenue of $18.93m (+2.7% on 9M23). Alpine Group had Q3 revenue of $4.5m (-3.8% on Q323) and YTD revenue of $14.03m (+0.7% on 9M23). O'Neill and Associates (which I believe is a state level organisation that does minimal federal lobbying) had Q3 revenue $0.27m (+4.5% on Q323) and YTD revenue of $0.86m (+3.2% on 9M23). Aggregate PPHC regulated revenue for Q3 was $17.76m (+1.9% on Q323) and YTD revenue was $53.46m (+3.5% on 9M23). I note there is a small discrepancy of about $110k between the amount PPHC reported in their RNS Reach announcement and the OpenSecrets numbers. |
 PPHC 3Q24 terminations and registrations. Clients paying a quarterly fee consistent with >$100k annually are marked with (*).
Forbes-Tate registrations - Barilla America, Glade Brook Capital Partners, Ionis Pharmaceutical(*), Palm Creek Ranch(*), PNC Bank, Red Angus Association of America(*) and Zero Hash(*)
Forbes-Tate terminations - Block Inc., H2 Global Technologies, Homeward Health, Scanstat, Sorare SAS and The Williams Companies(*)
Crossroads registrations - Americans for a Clean Energy Grid, Avue Technologies Corporation, Cohere US, Inc., Discovery Energy LLC (DBA Rehlko)(*), Hone Health, Last Energy Inc.(*), Leukemia & Lymphoma Society Inc.(*) and Marius Pharmaceuticals
Crossroads terminations - City of Oak Harbor, WA and Taylor's International Services, Inc.
Alpine Group registrations - City of Provo, UT, Gamechange Energy Technologies Corp. and Sharda Cropchem USA(*)
Alpine Group terminations - Aura Sub, LLC(*), Dynavax Technologies(*), Forescout Technologies, Inc.(*), Independent Petroleum Association of America and Rebellion Defense Inc.(*)
O'Neill & Associates registrations - Leader Bank and Massachusetts Association of Approved Special Education Schools
O'Neill & Associates terminations - none
Alpine Group experiencing relatively high turnover in the past year. Of the $4.68m billed in 3Q23, $900k has terminated including $330k in 2Q24. Waiting for OpenSecrets but I think Alpine billed $4.55m in 3Q24. Maybe they had a departure? Forbes Tate doing better than the others at the moment. |
These shares are very cheap with dollar dividend increased again to run at a yield above 8.5% and the PE sector willing to take out similar companies at multiples of this stocks valuation.There are some technical factors around free float to understand but I don't think that should worry private investors. It's an acquiring people based business which operates organisationally in a federal way. An interesting company to hold to diversify a small cap portfolio. |
Glad it's helpful I've found OpenSecrets to be a useful resource. The new client wins/losses come from the raw data in the Senate Lobbying Disclosure Act database which was pretty easy to navigate. Hopefully the Forbes Tate 2Q24 new client wins translate to a bit more revenue traction from Q3 onwards and closer to the stated 5-10% organic growth rate target. The lobbying business seems underaprreciated and hopefully digging out some of the additional detail will help highlight its attractiveness. On the Zeus podcast Stewart said that the regulated lobbying is by far the highest value activity with revenue/employee above $800k and >90% renewal rates. |
Thanks for the OpenSecrets figures, gsbmba99. Very helpful. |
Interview with Stewart Hall, CEO, conducted by Nick Searle for the Zeus podcast. |
WPP has agreed to sell its remaining, controlling stake in FGS (a financial PR and public relations firm consisting of Finsbury, Glover and Sard Verbinnen) to KKR. Zeus published a note this morning with their read-across.
"Zeus note today’s announcement by WPP confirming it has agreed the sale of its majority stake in FGS Global, a leading strategic communications and advisory firm, for an enterprise value of $1.7bn. FGS generated an operating profit of $87m on $465m of net sales in 2023, implying a purchase EV/EBIT multiple of 19.5x, materially below the current FY24E EV/EBIT of 6.0x for PPHC. Were PPHC to trade on a 19.5x multiple, our analysis indicates shares could be worth north of 200% versus the current price of 133.5p.
- PPHC generates superior margins: FGS Global generated an operating margin of c. 19% in 2023 versus PPHC’s 25.9%. Zeus forecast PPHC’s operating margin to reach close to 27% by FY26E.
- Implied valuation: WPP has agreed the sale of FGS Global for an EV of $1.7bn, implying an EV/EBITDA of 18.9x and EV/EBIT of 19.5x based on 2023 EBITDA (incl. ROU deprecation) of $90m and EBIT of $86m. PPHC currently trades on a one year forward EV/EBITDA of 5.9x and EV/EBIT of 6.0x. This implies material upside to PPHC’s share price and suggests the current valuation is undemanding versus its potential takeout value." |
OpenSecrets hasn't posted Alpine Group but my results matched the OpenSecrets results they posted for Forbes Tate and Crossroads so I think I've done it correctly for Alpine Group. According to OpenSecrets, Forbes Tate had 2Q24 regulated revenue of $6.63m (+8.7% on 2Q23) and $12.88m for 1H24 (+5.1% on 1H23). According to OpenSecrets, Crossroads Strategies had 2Q24 revenue of $6.36m (+2.1% on 2Q23) and 1H24 revenue of $12.72m (+4.8% on 1H23). According to my estimate, Alpine Group had 2Q24 revenue of $4.84m (+4.1% on 2Q23) and 1H24 revenue of $9.53m (+3.0% on 1H23). Across all three entities, 2Q24 regulated revenue was $17.83m (+5% on 2Q23) and $35.13m for 1H24 (+4.4% on 1H23). |
Lobbying Disclosure Act filings have (largely) been made for 2Q24. I'll wait for OpenSecrets.org to publish their revenue numbers as I want to cross check my results. In any event, OpenSecrets doesn't 100% match the company's regulated revenue. Helpfully, new registrations and terminations are listed. Across the three entities, more wins than losses (and hopefully more fees won than lost). Alpine Group had a few big name terminations - Takeda Pharmaceuticals ($50k in 2Q), The Blackstone Group ($40k in 2Q) and Walmart ($60k in 1Q, 0 in 2Q). Forbes Tate picked up Shein who paid $120k in the quarter ( for lobbying related to e-commerce issues.
Forbes Tate 2Q24 new registrations - Bank Policy Institute, Citizens for Responsible Energy Solutions, Datavant, House Rx, Infinity Natural Resources, Multiplan Corporation, Rainbow Energy Center, Safe and Ethical PPE Access Alliance, Shein Technology and Signifier Medical Technologies.
Forbes Tate 2Q24 terminations - Conduent Business Services and Human Rights Campaign
Crossroads Strategies 2Q24 new registrations - Basic Commerce and Industries, Inc., E-Z Treat and Spexi Geospatial.
Crossroads Strategies 2Q24 terminations - 2U, Inc., Breezeline, Cohnreznick LLP and Louisiana Mid-Continent Oil and Gas Association.
Alpine Group 2Q24 new registrations - Adtalem Global Education, Atmos Energy Corporation, Jerome Stevens Pharmaceuticals and Morgan White Group, Inc.
Alpine Group 2Q24 terminations - Calvary Hospital, Legence Holdings LLC, Takeda Pharmaceuticals, Team Health, The Blackstone Group, Trilliant Health and Walmart, Inc. |
Canaccord, recently appointed joint broker, has initiated coverage on PPHC with a note available to subscribers on Research Tree. A snippet:
"Materially undervalued hidden AIM gem that ticks a lot of boxes
US lobbying agency 'buy & build': PPHC is a UK-listed holding company consolidating
the highly fragmented lobbying & public affairs industries in the US. Since the 2021
IPO, it has built a strong track record of delivering organic growth and double-digit EPS accretion from four M&A deals, successfully consolidating a market where larger groups have failed in the past. This comes on the back of a well-thought-out M&A playbook that typically involves paying modest single-digit multiples upfront with a mix of cash and shares and significant five-year success-based earn-outs.
High margins; cash-generative & strong visibility: Lobbying for enterprises &
nonprofits is a regulated and attractive business in the US - PPHC's >1,200 clients
usually pay fixed annual retainers, creating a sticky revenue stream of which ~75% is
reoccurring. Lobbying spend is strategic rather than discretionary for most clients and typically comes out of CEO office budgets. PPHC's operating margins in the mid-20s are well above those of larger ad agency and comms groups, with free cash flow margins in the high teens % also impressive.
Valuation too low; material upside: Given the attractive financial profile, we view
the shares as significantly undervalued – 7x CY25E P/E and a ~15% FCF yield look way
too low, given much more cyclical ad agencies on >10x P/E and PPHC’s closest listed
peer, FTI Consulting, on 21.5x or 3x PPHC’s multiple. Our 250p target price implies 84% upside potential." |
Investor's Champion covered PPHC again in their free podcast at the weekend :-
looks like it has brought more investors in today. |
I hadn't intended for the comment to come across that way. I think of some of the various elements of progress made over the last year such as 1) dropping the Reg S trading restrictions which meant I previously could only buy shares in Frankfurt using the mirror quote; 2) adding trading capability through AJ Bell, Interactive Investor and, ultimately, Hargreaves Lansdown; 3) a write-up in the Mail on Sunday; 4) research coverage from a broker more accessible to retail investors or 5) a profile in Investor's Champion. If you had asked me which would result in the biggest share price movement over a few days, I probably would not have guessed 5). |
Mmm sounds like you are a bit cynical about Investor's Champion.
I agree, they have probably a long way short of the SCSW or Simon Thomson (Investor's Chronicle.
It looked like there might have been stake some stake building over last few days and paying 9% at 126p and growing well it looked good value. DYOR. |
I appear to have underestimated the reach of the mighty Investor's Champion. |
Covered by Investor's Champion tip website :-
Flying under the radar with a big dividend
Public Policy Holding (AIM: PPHC), the government relations and public affairs group, which arrived in AIM in December 2021 has made its first acquisition in the UK.
Established in 2014, PPHC is a leading bi-partisan, full-service US government affairs business. It operates a portfolio of independent firms offering public affairs, crisis management, lobbying and advocacy services on behalf of corporate, trade association and non-profit client organisations.
Clients engage PPHC to enhance and defend their reputations, advance policy goals, manage regulatory risk, or otherwise engage with US federal and state-level policy makers, stakeholders, media, and directly to the public at large.
It is acquiring Pagefield Communications Limited, a premier London-based strategic communications and cross-party public affairs advisory firm, for an initial consideration of £16.2m.
Until now, PPHC's nine operating companies have been solely based in the US, although its c.1,200 clients - including nearly half of the Fortune 100 – have operations around the world. Alongside organic growth, as outlined at the time of its IPO in December 2021, PPHC has been targeting acquisitions within the key political capitals of London and Brussels, as well as more US states, in order to broaden its geographic reach and policy expertise.
Since IPO, PPHC has acquired three businesses in the US, with Pagefield becoming its first international acquisition and the 10th brand to sit under the Group umbrella, which encourages the cross-selling of services between operating companies to augment organic growth.
The initial consideration of £16.2m has been funded 93% (£15.1m) in cash and 7% (£1.1m) through the issue of new shares in PPHC to the shareholders of Pagefield.
A cross-party consultancy, Pagefield helps clients navigate the UK's complex legislative and regulatory environment and is known for high-level reputation, issues management and strategic communication campaigns.
Pagefield's clients include some of the world's premier brands, established listed companies, fast-moving start-ups and challengers, inspiring charities and individuals.
For the year ended 31 December 2023, Pagefield recorded net revenues of £6.0m, growing at an average rate of 10% for the past three years and profit before tax of £2.3m, an attractive 38% margin. The initial consideration assumes a c9.5x post-tax acquisition multiple, which looks quite reasonable.
In addition to the initial consideration, a further earnout payment could be made after the end of 2025, capped at £6.3m.
Following the acquisition, the effective debt position of the Group will be approximately $35m, which management considers to be a conservative level relative to its reported operating cash flow of $21.6m.
PPHC share price has climbed over recent months to 126 pence, but still remains down on the IPO price of 135 pence.
The house broker has updated estimates for the impact of the acquisition. Forecasts for the year ending December 2024 are for revenue of $154.8m, underlying pre-tax profit of $35.3m and underlying earnings per share of 22 cents/17 pence. At the current 126 pence share price that makes for modest 7.5x earnings multiple, however, significant share-based payments are excluded in calculating the underlying numbers. Conversely the Group does not classify acquisition costs (such as advisor fees) as a non-underlying item, which impacts profits.
As usual, the cash flow provides far better financial picture. Forecast free cash flow of approx. $22m/£17m for the year ending December 2024, is a free cash flow yield of 9.6% based on the enterprise value of £177m (Market cap £150m + current net debt £27m)
December year end net debt (excluding leases) is estimated to be $21.4m.
The forecast dividend of 14.6 cents/11.4 pence is a dividend yield of 9%. |
Zeus has been appointed as a joint corporate broker and this morning they initiated coverage in a note available to subscribers of Research Tree. Hopefully Zeus will be able to attract a bit of additional interest. A brief snippet:
"Public Policy Holding Group (PPHC) controls nine complementary lobbying and public relations advisory businesses in the US, with a compelling growth strategy including M&A into the UK and/or the EU. In our view, PPHC has high quality revenues, good organic growth (supported by structural market trends), an active M&A pipeline in a fragmented market, and attractive EBITDA margins, free cash generation and dividend distributions (60%+ payout ratio). Our DCF-based valuation estimate is 230p per share (83% upside), with future M&A providing further potential value. Due to its market leadership position in US lobbying, its growth strategy, and a peer-group-leading dividend yield of 9.2%, we believe the risks are skewed to the upside." |
If I've done the math right, the regulated portion of PPHC's revenue base which consists of Alpine Group ($4.69m), Crossroads ($6.36m) and Forbes Tate ($6.25m) grew 3.8% in Q1 to $17.3m according to OpenSecrets.
As an example, |
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