# PRG - Programmed Maintenance Services



## System (27 August 2011)

Programmed Maintenance Services (PRG) is a provider of staffing, maintenance and project services, employing several thousand staff and tradespeople in government and the private sector. PRG has a database of personnel to service customers under mostly long term contracts, through branches located in Australia, NZ, the UK, and Singapore.

http://www.programmed.com.au


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## prawn_86 (19 December 2012)

Has anyone had a look at this?

Paying a 13c (6.7%) dividend and forecast earnings are increasing. And directors buying recently.

On the chart a break of $2 might stir some interest.

Worth further research?


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## brty (19 December 2012)

Yes, I have had a look at this. This company is on my buy list. I'm waiting for a technical reason to buy, hopefully a retracement to the $1.75 area.

The directors buying has not been conclusive, small $10-20k purchases recently. I tend to discard small buying as a signal. In June a director stumped up $120k for 50,000 ; $2.40/share. He got it wrong, but that is a positive sign of confidence in those prices.

Looking at debt levels, this company has been paying off debt with the high cashflow over the last couple of years. My suspicion is that if cashflow can be maintained within 70% of last years, then both earnings and dividends will rise. I'm surprised the purely FA investors are not all over this.
There are many small to medium companies that are showing good dividends, have low price to book ratios, and lowered debt levels over the last couple of years. Also looking at price multiples compared to pre GFC, there appear to be lots of bargains to be had.
PRG had cashflow of 18c/share, earnings of 26c/share and debt of $43m in 2005, while the share price spent a lot of time north of $5. Today we have have cashflow of 40c/share, earnings of 26c/share and debt of $58m, yet SP of $1.94.
Dividend in 2005 was 14.7c/share and grew to 18.1c/share in 2007, while cashflow went from 18c to 23c in the same time period.


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## skc (19 December 2012)

brty said:


> PRG had cashflow of 18c/share, earnings of 26c/share and debt of $43m in 2005, while the share price spent a lot of time north of $5. Today we have have cashflow of 40c/share, earnings of 26c/share and debt of $58m, yet SP of $1.94.
> Dividend in 2005 was 14.7c/share and grew to 18.1c/share in 2007, while cashflow went from 18c to 23c in the same time period.




Where did you get these numbers from?

The H1 results showed that NPAT was $12.3m (10.4cps), net op cash flow was $19.1m (16cps) and net debt of $96m.

Back in 2005, PPP (public-private partnership) was all the rage and PRG can win a 30yr concession for a project with guaranteed revenue... those opportunities are no more.


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## brty (19 December 2012)

Apologies, those figures were for the year ended 3/12 from the annual report. Have not updated for the first half 12/13. Debt figures were for long term debt, with current account showing improvement (again in the latest annual report)

A quick squizz at the 1/2 year shows LT debt has risen slightly to $63m and C/F up to $19m compared to previous corresponding period.

I find actual results a good indicator, rather than what -iffss. I only mentioned 2005 as a comparison as some of the metrics were similar.


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## systematic (19 December 2012)

I had them a little earlier in the year and ditched them for something else.

I currently have them as one of 5 (in the ASX300) very 'deep value' picks that have a good financial score.


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## prawn_86 (19 December 2012)

systematic said:


> I currently have them as one of 5 (in the ASX300) very 'deep value' picks that have a good financial score.




Care to share your other 4?


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## systematic (19 December 2012)

prawn_86 said:


> Care to share your other 4?




Yeah sure, for better or worse...unsurprisingly(?) mining services feature heavily...
GRR, BLY, MAH & EHL


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## trillionaire#1 (19 December 2012)

I  bought a few thousand shares in PRG last week,part of my dividend paying portfolio .
A steady enough company in unsteady times.
There are more spectacular stocks out there ,hopefully i already own them!


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## Country Lad (15 November 2013)

Yesterday's closing chart, break this morning from the Country Lad setup.





Cheers
Country Lad


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## piggybank (12 December 2013)

It looks like Country Lad is enjoying the fruits (full-time travelling) of his recent buys in the market


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## notting (12 January 2015)

PRG	trading at 2.38	values SKE at 1.45 which is now trading at 1.59. 

When a company bids for another usually it goes down, PRG went up!

OK so share holders like the idea of a tie up and the offer must have been so low that everyone loved it.

SKE fast tracked the new CEO into the seat presumably because the guy exiting is less likely to be motivated to hang on and try and grind the company out of it's oil related services lag.  Also SKE informally called the bid opportunistic. It's basically a swap with 25c cash to SKE holders valuing the deal at current price of 1.45.

So it aint going to happen here.  Does PRG really want to start raising the price at this point in this mining services environment?
One would think if they did, well, that would put a bit of a downer on PRG.  Their all looking a bit BLY to me.  As in, that's what happens to drillers when times where OK and flat!  Now times are cactus and very much downward looking.


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## pixel (24 June 2015)

Originally, I bought PRG for the dividend (11.5cFF ex on July 1st)
Was a little on edge when they went into Trading Halt immediately after, but it seems the Merger with SKE is finding support.

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01635519




holding, watching, current stop: $2.70 (while cum-div)


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## notting (24 June 2015)

They basically raised the scrip bid by only 5c!
A miserable but sensible amount.
Surprisingly PRG is acting like a company that knows what it is doing.
I much prefer to see take overs happening when things are looking horrible than when things are looking good.
Still I'm shorting this one today!


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## SilverRanger (2 July 2015)

Still struggling to find borrows to trade the arb, still some decent amount of juice out there


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## ukulele (6 July 2015)

notting said:


> They basically raised the scrip bid by only 5c!
> A miserable but sensible amount.
> Surprisingly PRG is acting like a company that knows what it is doing.
> I much prefer to see take overs happening when things are looking horrible than when things are looking good.
> Still I'm shorting this one today!




You'd be decently happy with that short Notting? I went short just before the dividend and took profits because I didn't want to hold over the weekend.


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## notting (6 July 2015)

ukulele said:


> You'd be decently happy with that short Notting? I went short just before the dividend and took profits because I didn't want to hold over the weekend.




Yeah.
And it just stuck it's nose under 200 day moving average so, could be more to come quickly if it doesn't consolidate for too long or reverse with attitude (volume)


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## Wysiwyg (6 July 2015)

This is a stock I bought 4000 units in today. The volume was less than average while the price closed on its low. $2.50 or a stopping volume day should mark the low in my opinion.


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## tech/a (7 July 2015)

Stopping Volume is the exact opposite.
Volume is much greater than average.
You would like to see close above the 
Low --- infact above the open ideally.

Low volume and closing on the low
Indicates sellers ar looking for buyers
At lower prices.

A line on a chart won't do a lot.


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## ukulele (7 July 2015)

I have to admit that it does at the moment look like the proverbial dropping knife. Interested to know your timeframe for this trade Wysiwyg?


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## notting (7 July 2015)

I wouldn't call it a falling knife at this point.
There has been keen buying at this level although last time it was clapping the second take over proposal and also heading up to a dividend payment.
Now SKE is yeilding quite strongly at this level so one may hope that the dividend can be maintained even with the part cash payout and merger costs.
It is heading into the 61.8% retracement at $2.47 and looking at what it did last time it would be prudent to take some off the short table, let it bounce, see how high and what volume does if and when it heads to retest these levels after a bounce.


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## craft (7 July 2015)

SKE has indicated that its intention is to pay out the cash component of the offer as a franked dividend. If that happens SKE is about a 10% cheaper way into PRG for low tax entities like superfund’s.

There are time cost of money, deal risks and failure to pay the full franked amount to consider, but If you’re positive on the combined business then SKE may be a better entry atm.

If you look at the relative strength since they announced the deal it looks to me like the ARB is trying to close.  Of course they could both go down as the ARB closes so if you’re not particularly keen on the combined business and a possible repricing to recognise the synergies you may want to pair trade it. Mind you a long in SKE even as part of a pair against PRG won’t be real pleasant if the deal doesn’t go ahead.


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## Wysiwyg (7 July 2015)

ukulele said:


> Interested to know your timeframe for this trade Wysiwyg?



1 day to whenever.


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## PZ99 (7 July 2015)

hmmm... Me thinks Nick Kyrgios must be the new CEO of prg... @ $2.50 they've tanked in the worst possible way!


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## Wysiwyg (8 July 2015)

ukulele said:


> I have to admit that it does at the moment look like the proverbial dropping knife. Interested to know your timeframe for this trade Wysiwyg?



Sold at a loss today fella. It's what they want, to sell at a loss that is.


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## VSntchr (8 July 2015)

craft said:


> SKE has indicated that its intention is to pay out the cash component of the offer as a franked dividend. If that happens SKE is about a 10% cheaper way into PRG for low tax entities like superfund’s.
> 
> There are time cost of money, deal risks and failure to pay the full franked amount to consider, but If you’re positive on the combined business then SKE may be a better entry atm.
> 
> If you look at the relative strength since they announced the deal it looks to me like the ARB is trying to close.  Of course they could both go down as the ARB closes so if you’re not particularly keen on the combined business and a possible repricing to recognise the synergies you may want to pair trade it. Mind you a long in SKE even as part of a pair against PRG won’t be real pleasant if the deal doesn’t go ahead.




Excellent summary of the current situation.

I am arbing it through a pair. The margin actually slimmed significantly this morning for the first time, but SKE is now catching up to PRG's falls.
The further down we go, the more downside is removed from a number of angles with regard to a long position on SKE - mainly; reduced downside in the event of a failed takeover and the soon to be combined entity will be trading on a cheaper multiple (note: it already looks decent based on multiples that SKE and PRG have historically traded at).
I got out of my SKE position at $1.55ish (too early) on the way up a few weeks back, but we are now back below that level. It won't be long before I regain my exposure...hopefully we can squeeze a few more cents first.


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## PZ99 (8 July 2015)

This newbie has reached a point where it's time to ask the experts for advice 

Having bought this stock on the XD date only to watch the subsequent value crash around 15% what are my best options? I've ruled out panicking and flipping the bird in their general direction  

Should I wait for future dividends (if they're sustainable at this level) to reimburse the lost capital? Or just sit and hope the price recovers?

TIA


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## tech/a (8 July 2015)

PZ99 said:


> This newbie has reached a point where it's time to ask the experts for advice
> 
> Having bought this stock on the XD date only to watch the subsequent value crash around 15% what are my best options? I've ruled out panicking and flipping the bird in their general direction




If your not going to sell then your next two options cover it!


> Should I wait for future dividends (if they're sustainable at this level) to reimburse the lost capital? Or just sit and hope the price recovers?
> 
> TIA




You could average down
You could sell part of your position to Minimize further losses.
You should revisit why you thought it was a good idea to buy it.
What went wrong or what's changed.


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## notting (9 July 2015)

Mr Greedy guts who was pigging out on the 25th of May, for a few days but was feeling too sick about things yesterday. Seems to have returned to the table at the opening bounce this morning.
Lets see if he wants to go the whole hog through 2.40


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## PZ99 (13 July 2015)

tech/a said:


> If your not going to sell then your next two options cover it!
> 
> 
> You could average down
> ...



Thanks for the reply 

I take it "average down" as in buying more stock to lower the cost basis? I'm considering it but just unsure if further losses in the price are imminent.

I guess my error was in expecting a lesser drop after the XD and maybe selling just prior to the next event might be the way to go if I apply the above scenario


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## Wysiwyg (19 October 2015)

PRG got away with a deep discount takeover of SKE at the cycle low. Skilled Engineering, a 50 year old Australian company is no longer. No material wealth from the takeover if held SKE above $1.70 ish.


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## Wysiwyg (28 October 2015)

Very happy with the outcome with the SKE cash and final dividend, PRG dividend stream and future growth confidence. I think this recent run up has peaked but the higher lows since February suggests the longer term weekly trend is continuing up.


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## PZ99 (28 October 2015)

I sold mine for the same price I bought them for in June (2.82)... 2 dividends minus 2 brokerage minus 6 coffees a day. Panic over


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## Wysiwyg (8 November 2015)

Had more share supply turn up at + $2.90 last week and price has tried to hold. Historically this stock is pointy peaky so I am expecting a pull back in the $2.60 to $2.70 range. Together they have most employment sectors covered for staff supply.


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## pixel (9 November 2015)

Wysiwyg said:


> Had more share supply turn up at + $2.90 last week and price has tried to hold. Historically this stock is pointy peaky so I am expecting a pull back in the $2.60 to $2.70 range. Together they have most employment sectors covered for staff supply.



Agree with the above, especially the expectation of a pullback towards $2.60.
I have current resistance at $2.95; took some profit off the table at average $2.92 and lifted my trailing stop to a break below $2.82.


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## Wysiwyg (20 November 2015)

Day traders capitalised on a 10% drop this day with an exhaustion sell point of $2.55. Obviously the half year news triggered a desperate sell off.


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## Wysiwyg (31 January 2016)

Wysiwyg said:


> Had more share supply turn up at + $2.90 last week and price has tried to hold. Historically this stock is pointy peaky so I am expecting a pull back in the $2.60 to $2.70 range. Together they have most employment sectors covered for staff supply.



Expectation is inappropriate for the markets. Never meets expectations however I noticed the price made a bit of a turn last week. Not sure how much of a bounce but positive fundamentals will help I would hope (note not expect ). For a labour hire company, job ads. trending up is a good sign.



> The number of jobs advertised around the country was largely flat last month after rising for four months in a row.
> 
> The ANZ Job Advertisements Series shows job listings slipped by just 0.1 per cent in December, sesonally adjusted, leaving the yearly rate of growth at a healthy 10 per cent.
> 
> ...




http://www.abc.net.au/news/2016-01-11/job-ads-point-to-stable-unemployment/7081362


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## PZ99 (4 February 2016)

Stock's been given the royal dump today after a writedown and a slashed dividend... down to SKE level pricing at the moment


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## Wysiwyg (4 February 2016)

WTF!  Bought in days before this negative announcement and took a hit.


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## PZ99 (4 February 2016)

^ Sorry to read that 

@ $1.18 with a 5c dividend it is a good buy I wonder???

Last year it was 11.5c with the SP @ 2.86


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## Wysiwyg (5 February 2016)

PZ99 said:


> ^ Sorry to read that
> 
> @ $1.18 with a 5c dividend it is a good buy I wonder???
> 
> Last year it was 11.5c with the SP @ 2.86



The reaction was complete B.S.  The company halving its divvy is complete B.S. This market is complete B.S.

Top 200 companies getting sold off like a crap penny stock. Why does it happen?


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## pixel (19 February 2016)

Wysiwyg said:


> The reaction was complete B.S.  The company halving its divvy is complete B.S. This market is complete B.S.
> 
> Top 200 companies getting sold off like a crap penny stock. Why does it happen?



No use asking Why? If someone with deep enough pockets wants the sp lower, it only takes a little push after a less-than-exceptional report to send the lemmings over the cliff. Every sale must have a buyer. Earlier this week, I was one of the buyers.





I reckon it will keel rising into next week's AGM (Wednesday morning Perth time). If it looks like turning, I'll take profit; otherwise, I'll buy the dips. A half-year dividend in the order of 5-6c, FF, will justify much more than $1.25.


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## pixel (4 March 2016)

At the beginning of the flag pattern, I took part profit - hoping to buy back below $1.20.




That no longer looks very likely, so I'll simply hold the remainder and don't add or sell till the new direction becomes clear.  The flag pattern could break any moment now to the upside.


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## pixel (12 April 2016)

pixel said:


> At the beginning of the flag pattern, I took part profit - hoping to buy back below $1.20.
> 
> View attachment 66007
> 
> ...




And break it did  Meanwhile, another flag has developed, which, if breaking "by the book", should close the gap and move back well above $2.


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## VSntchr (12 April 2016)

Good to see you having success trading PRG pixel.

I did initiate a trade when it got to ridiculous levels but have been flat for a while now. 
Your chart has put it back on my radar


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## pixel (10 May 2016)

A really long flag/ pennant blowing to the right. Time to get some updraft.




Volume isn't quite there yet, but it's now approaching breakout point.
We're holding with increasing confidence in its playing out to the upside.


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## VSntchr (10 May 2016)

pixel said:


> A really long flag/ pennant blowing to the right. Time to get some updraft.
> 
> 
> Volume isn't quite there yet, but it's now approaching breakout point.
> We're holding with increasing confidence in its playing out to the upside.



Today's action heightened my interest also. Personally I'm waiting for a close above 156 to get involved again.


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## skc (11 May 2016)

VSntchr said:


> Today's action heightened my interest also. Personally I'm waiting for a close above 156 to get involved again.




Report due 25 May. Make sure you don't get caught holding over this unless you have a strong view on the actual results. Liquidity is terrible at the best of times. 

SPO may be an alternative... essentially the same space, similar chart pattern, already reported and much better liquidity.


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## VSntchr (11 May 2016)

skc said:


> Report due 25 May. Make sure you don't get caught holding over this unless you have a strong view on the actual results. Liquidity is terrible at the best of times.
> 
> SPO may be an alternative... essentially the same space, similar chart pattern, already reported and much better liquidity.



Thanks mate, timely reminder as the random-schedule results can really catch me off guard every now and then! 
SPO looks good, have had success with it in the past so happy to have a close look again.


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## Wysiwyg (25 May 2016)

Okay we got a break of range now. Seems the divvy announcement coinciding with a big Index lift attracted buyers.


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## McLovin (25 May 2016)

Wysiwyg said:


> Okay we got a break of range now. Seems the divvy announcement coinciding with a big Index lift attracted buyers.




I think it was the confirmation of the FY17 outlook statement (which did have a few caveats around macro environment etc). EBITDA of $130m, EBITA of $100-$110m. Say ~$17m in interest, so NPAT in the range of $58m-$65m (23cps-26cps). PE between 6-7x.  Looks pretty cheap on that basis.


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## skc (25 May 2016)

McLovin said:


> I think it was the confirmation of the FY17 outlook statement (which did have a few caveats around macro environment etc). EBITDA of $130m, EBITA of $100-$110m. Say ~$17m in interest, so NPAT in the range of $58m-$65m (23cps-26cps). PE between 6-7x.  Looks pretty cheap on that basis.




Cash flow performance was strong as well. So a pretty solid performance considering they swallowed SKE not that long ago. 

Funny that back in Feb when the company announced forecasted earnings, the stock prices got pummeled down to <$1. Today on confirmation of the same numbers the shares go up to now a high of $1.66.

Yeah the market is always right


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## McLovin (25 May 2016)

skc said:
			
		

> Cash flow performance was strong as well. So a pretty solid performance considering they swallowed SKE not that long ago.




It was a pretty good result all round I thought. I don't really follow these guys, but I know they're a bit of a crowd favourite on here with a few posters who I do follow.



			
				McLovin said:
			
		

> I think it was the confirmation of the FY17 outlook statement (which did have a few caveats around macro environment etc). EBITDA of $130m, EBITA of $100-$110m. Say ~$17m in interest, so NPAT in the range of $58m-$65m (23cps-26cps). PE between 6-7x.  Looks pretty cheap on that basis.




Just for the sake of clarity, I excluded the amortisation charge because it's pretty much entirely related to customer relationships acquired through the SKE acquisition.


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## notting (25 May 2016)

PRG jumps 17c on the announcement of a 5c dividend.
What were they expecting a 12c tax on each share held.
Break out helped a bit too I spose.


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## McLovin (25 May 2016)

Did anyone solve the puzzle? I'm guessing it has something to do with the ladder?


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## Smurf1976 (25 May 2016)

McLovin said:


> Did anyone solve the puzzle? I'm guessing it has something to do with the ladder?




Haven't studied the picture too closely but the ladder doesn't appear to be secured to prevent movement. 

There's no barrier to prevent someone crossing from the other side of the street entering the work zone.

Traffic cone and seat are close to the base of the ladder such that someone coming down could fail to see them and trip etc. Can't easily move the bench but the traffic cone could be relocated.

It looks like the intent is that someone goes up the ladder and then walks along the roof to get to whatever they need to access. Is the roof strong enough? What's there to prevent them falling off?

Assuming tools are required, how will they be taken to up? Shouldn't be carrying them in your hands since you're supposed to be holding onto the ladder when climbing it.

Depending on the task being done an EWP (elevating work platform) would be a safer means of gaining access to whatever is being accessed. 

Maybe a few more as I haven't studied it too closely.

As for the stock, well I'm holding it so quite happy with today's performance.


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## McLovin (25 May 2016)

Smurf1976 said:


> Haven't studied the picture too closely but the ladder doesn't appear to be secured to prevent movement.
> 
> There's no barrier to prevent someone crossing from the other side of the street entering the work zone.
> 
> ...




Lol. Thanks smurf. I can see I have a bit of revision to do before the next exam!


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## craft (26 May 2016)

skc said:


> Cash flow performance was strong as well. So a pretty solid performance considering they swallowed SKE not that long ago.
> 
> Funny that back in Feb when the company announced forecasted earnings, the stock prices got pummeled down to <$1. Today on confirmation of the same numbers the shares go up to now a high of $1.66.
> 
> Yeah the market is always right





I Suspect the market over estimated the credit risk and underestimated the diversification of the revenue. The debt in particular is well down on even forecast and robustness of the revenue has allayed fears of more cockroaches. Its still pretty cheap - obviously not as cheap as <$1.00 Its probably not going to exceed anything above modest earnings multiples for some time but the opportunity of really low multiples assigned to get to sub $1.00 have probably passed unless something I don't expect happens with the business.


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## Ves (26 May 2016)

craft said:


> I Suspect the market over estimated the credit risk and underestimated the diversification of the revenue. The debt in particular is well down on even forecast and robustness of the revenue has allayed fears of more cockroaches. Its still pretty cheap - obviously not as cheap as <$1.00 Its probably not going to exceed anything above modest earnings multiples for some time but the opportunity of really low multiples assigned to get to sub $1.00 have probably passed unless something I don't expect happens with the business.



I haven't bought any more at lower prices because I'd already reached my allocation when SKE existed  (yes,  it's pretty red).

Honestly,  (and no one should listen to me), with the current state of the economy (especially low infrastructure spending levels) I still don't see why this was expensive at $3.

If it manages to get through the current cycle,  and I think it will pretty comfortably as a combined entity, I think these prices will look very cheap in the rear-view mirror when economic cycles do as they generally do and turn.


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## Wysiwyg (26 May 2016)

Ves said:


> I haven't bought any more at lower prices because I'd already reached my allocation when SKE existed  (yes,  it's pretty red).



I still hold core SKE takeover shares and bought more lower. Would still be in the red too otherwise. That market reaction was extreme to get a 67% lowering of price and it shows what a powerful tool fear is.


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## pixel (30 May 2016)

Wysiwyg said:


> I still hold core SKE takeover shares and bought more lower. Would still be in the red too otherwise. That market reaction was extreme to get a 67% lowering of price and it shows what a powerful tool fear is.




Same here, wysi
Not only fear is a powerful force, but confidence can also be a strong tool. Or would you call it greed = fear to miss out?
Essentially, we're still dealing with the same company it was 6 months ago. Including even their being a Corporate Sponsor of the Fremantle Dockers


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## Wysiwyg (30 May 2016)

pixel said:


> Same here, wysi
> Not only fear is a powerful force, but confidence can also be a strong tool. Or would you call it greed = fear to miss out?



I sold everything including PRG (PRG, SPO & IFM were marathon sufferings) so flat as of today. Biased bearish for the time being as I reassess a 20% portfolio drawdown.


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## pixel (9 June 2016)

Wysiwyg said:


> I sold everything including PRG (PRG, SPO & IFM were marathon sufferings) so flat as of today. Biased bearish for the time being as I reassess a 20% portfolio drawdown.




A few minutes ago, James Walker told the Market that he'd bought 10k PRG shares.
It's a small number for a Director, but let's see how the Market reacts over the next few days.
So far, I still hold half my original position after taking profit when $1.90 failed. (As the 5cff dividend is only scheduled for next FY, I am still ahead at this point.)




My technical support is in the low $1.60's. If it gets there, I'll take another look at a buying opportunity.


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## pixel (27 July 2016)

Holding AGM today. Chair and MD speeches are quite upbeat:
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01760830

Market reacts positively.




I hold.


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## notting (30 September 2016)

pixel said:


> Holding AGM today. Chair and MD speeches are quite upbeat:
> Market reacts positively.




Revenue downgrade yesterday.
Market reacts negatively!!!
Thanks Mr Chairman.  Here come the cockroaches.|



> Programmed has concluded that in the short term revenue growth in its staffing business will now not offset the steep decline in the marine business. The net reduction in revenue will therefore lead to lower earnings in the year to 31 March 2017 than previous guidance. FY17 EBITDA is now projected to be approximately $100m (previous guidance $120m), excluding one off Skilled integration and restructuring costs.


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## PZ99 (30 September 2016)

Picked up some of these again. So revise the price target to $1


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## pixel (17 November 2016)

PZ99 said:


> Picked up some of these again. So revise the price target to $1




At $1 I'd definitely buy 
I would even take a break and hold above $1.55 as a buy signal, seeing how it bounced back off $1.35.




Note the big gap overhead. That could become an attractive target.
Needs volume though, and as always, DYOR.


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## pixel (23 November 2016)

pixel said:


> At $1 I'd definitely buy
> I would even *take a break and hold above $1.55 as a buy signal,* seeing how it bounced back off $1.35.
> 
> [...]
> ...




Bought the break, average $1.555
Hadn't counted on the Half-Yearly report out today. The Market liked it too.


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## pixel (8 December 2016)

That went quite well  I make $1.78 current resistance that needs to be broken.
Almost there again, and another push towards $2 could be about to succeed.

I added some more and am now slightly overweight.


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## Roller_1 (8 December 2016)

pixel said:


> That went quite well  I make $1.78 current resistance that needs to be broken.
> Almost there again, and another push towards $2 could be about to succeed.
> 
> I added some more and am now slightly overweight.
> ...





Hey Pixel,

for interest sake, what do your yellow boxes indicate?


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## pixel (8 December 2016)

Roller_1 said:


> Hey Pixel,
> 
> for interest sake, what do your yellow boxes indicate?




Google "Darvas Boxes"
The full history can be found here: http://www.nicolasdarvas.org/
They're not hugely "scientific", and it would be dangerous to follow the method especially during times of high volatility, low trending. I have my program (Pulse from Paritech) draw them in because I find them useful markers of support and resistance. If a stock is strongly trending, I may use them to identify top-up or exit opportunities.


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## Roller_1 (8 December 2016)

Cheers, I wont be using them. Was just curious. I like clean and clear chart imo


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## pixel (12 December 2016)

September gap closed.




I expect (suspect?) this level to offer some resistance. However, today's announcement of an offshore support contract could well provide sufficient impetus to push back above $2.
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01811830

I hold.


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## pixel (22 May 2017)

PRG has been quite savagely sold off after some adverse publicity and failure to meet market expectations. Luckily, I got out in time.
Meanwhile, however, it seems the worst lies behind us, the market has adjusted expectations, and the SKE takeover has been bedded-down.
Time to have another look at the chart again, and it looks as if MACD is developing a Bullish Divergence, which should make a gap close imminent. I'm watching for that.


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## craft (14 July 2017)

Prg recommends $3.02 cash offer.


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## Ves (14 July 2017)

craft said:


> Prg recommends $3.02 cash offer.



Hmm,  another one of mine being taken over.

I'd probably prefer that a takeover of PRG didn't happen right now as *I* still believe it's closer to the bottom of the earnings cycle than it is the top. 

Same thing looks like it will happen to VOC too.  Lost exposure to quality long-term assets.


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## pixel (14 July 2017)

craft said:


> Prg recommends $3.02 cash offer.



In stark contrast to usual "practice", this takeover offer appears to have been under very tight wraps.


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## craft (14 July 2017)

Ves said:


> Hmm,  another one of mine being taken over.
> 
> I'd probably prefer that a takeover of PRG didn't happen right now as *I* still believe it's closer to the bottom of the earnings cycle than it is the top.
> 
> Same thing looks like it will happen to VOC too.  Lost exposure to quality long-term assets.




Losing long term propositions prematurely is a bit of a pain. I think, in this case, considering the current market and price offered, there are opportunities to redeploy which will probably result in better long-term overall portfolio return outcomes.


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## McLovin (14 July 2017)

Ves said:


> Hmm,  another one of mine being taken over.
> 
> I'd probably prefer that a takeover of PRG didn't happen right now as *I* still believe it's closer to the bottom of the earnings cycle than it is the top.
> 
> Same thing looks like it will happen to VOC too.  Lost exposure to quality long-term assets.




Yeah. Annoying. I'd rather play golf than have to go hunting. Oh well.


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## craft (14 July 2017)

McLovin said:


> Yeah. Annoying. I'd rather play golf than have to go hunting. Oh well.




Too comfortable McLovin?


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## McLovin (14 July 2017)

craft said:


> Too comfortable McLovin?




Never! Just nice to come up for air every now and then.


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## skc (14 July 2017)

craft said:


> Prg recommends $3.02 cash offer.




Once again the Japanese don't muck around.... ~66% take over premium?! Arigatōgozaimashita!

Let's see how it works out for the buyer this time. A few years on, the Toll Holding acquisition didn't quite meet the expectations by Japan Post...

http://www.smh.com.au/business/japa...job-cuts-at-the-business-20170426-gvsl70.html


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## notting (14 July 2017)

Mental.
WOR looking happy about it too


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## craft (18 July 2017)

PRG Arbitrage


Purchase price $2.96

Sale price $2.42 Approx. end Oct.

Expected franked Dividend $0.60 Approx. end of Oct.

Expected franking Credit $0.257 Approx. Aug 2018

Expected tax shield (2.96-2.42) =$0.54*Capital Gains tax rate. Approx. Aug 2018.


I have quite a few purchases that will be under the 12month holding period for CGT discount, making a CGT tax shield attractive, so I have implemented to offset those purchases. If acquisition doesn’t go ahead Capital gain/loss between new and non-discount parcels should just about net out to zero.



Risk.

Takeover doesn’t go ahead (~20%) – price falls by ~$1.20

Franking Balance not utilised (~20%) - $0.51 of tax benefit not realised.

Settlement date blows out tying up money for longer.


Reward

$0.06 positive cash flow in October 2017.

$0.51 reduction in tax payable Aug 2018.


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## skyQuake (18 July 2017)

craft said:


> PRG Arbitrage
> 
> 
> Purchase price $2.96
> ...




Where are they going to get the cash to pay out the 60c div?
Nothing in the deal docs suggests persol will loan them the cash pre deal closure. Have seen money from acquirer to target to pay business costs but not divs


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## McLovin (18 July 2017)

skyQuake said:


> Where are they going to get the cash to pay out the 60c div?
> Nothing in the deal docs suggests persol will loan them the cash pre deal closure. Have seen money from acquirer to target to pay business costs but not divs




Declare the dividend but don't pay it until after the deal is closed. Once it's declared, s/holders become unsecured creditors (or the dividend becomes a debt) whether or not the deal goes through.

More likely it will form part of the scheme and the dividend will be declared concurrently with the closure of the deal.


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## craft (18 July 2017)

skyQuake said:


> Where are they going to get the cash to pay out the 60c div?




I don't know - It's a risk.

Pretty strong incentive to extract the value of the franking credit balance. Short term credit is not exactly a scarce resource. It doesn't have to come from Persol, though they would probably be the cheapest source of finance. I guessed the risk of not obtaining finance at ~20%

Persol should be indifferent as to wether it pays equity holders $3.02 or equity holders $2.42 and debt of another $0.60 if they don't themselve fund it.


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## craft (19 July 2017)

craft said:


> PRG Arbitrage
> 
> 
> Purchase price $2.96
> ...




It would seem prg don't have enough retained earnings to utilise all their franking credits. They may be able to come to some agreement with the ato, but too many question marks and now too marginal (for my liking) with increased uncertainty as to size of dividend. I'm going to chastise myself for missing obvious and sell majority of arbitrage position.


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## System (7 November 2017)

On November 6th, 2017, Programmed Maintenance Services Limited (PRG) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement whereby Autalent Solutions Pty Ltd, a wholly owned subsidiary of PERSOL HOLDINGS CO., LTD acquired all of the Company's securities.


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