PGA - Photon Group

[LeeTV]

I couldn't find a thread for PGA, so here it is.

PHOTON GROUP(PGA)
Current Market Capital of $279 million

Business Description
Photon Group Limited (PGA) offers a number of integrated marketing and communications services. PGA operates through its five strategic divisions: Strategic Intelligence; Integrated Communications and Digital; Internet Marketing and Communications; Experiential and Field Marketing, and Specialised Communications.

Company Strategy
PGAs strategy sets an equal focus on organic and acquisition growth. The strategy is to diversify its income stream by not being dependent on any one form of media, marketing sector, individual company or client. The company has a new corporate structure comprising of five divisions and intends to expand into international markets with its existing businesses that will be supplemented by acquisitions of local companies. The company has steadily built its international presence in the US, UK, and South East Asia including China. The company has entered into the high growth sectors of research, digital, internet, field marketing, and specialised services such as PR. The revenue from Experiential and Field Marketing division accounts for 36% of its total revenue in FY07, followed by 27% from Integrated Communications and Digital; 16% from Specialised Communications, 13% from Strategic Intelligence and 8% from Internet Marketing. With regards to EBITDA by division, the internet marketing division accounted for 21%, which is second to 33% from Experiential and Field Marketing division only. Photon Group reported NPAT up 25.90% to $8.64m for the half-year ended 31 December 2007. Revenues from ordinary activities were $245.61m, up 90.2% from the same period last year. Diluted EPS was 11.20 cents compared to 10.07 cents last year. Net operating cash flow was $13.41m compared to $17.93m last year. The interim dividend declared was 11.5 cents compared with 10 cents last year.



Credit Suisse 30/06/2008 Upgrade to Neutral from Underperform

Photon Group's recent share price retreat has triggered a Credit Suisse upgrade to Neutral from Underperform.
It maintains its $3.75 target price.


Merrill Lynch 05/06/2008 Downgrade to Underperform from Neutral, High Risk

Target $3.50 (was $4.40). Along with a mixed trading update the company unveiled a capital raising and to factor this in the broker has cut its earnings estimates by around 19% in FY09.
With little scope for any share price outperformance the broker has also downgraded to an Underperform rating on the stock.

Currently trading @ $ 2.78 as of close on the 1st August, 2008

 

[Grumpy Old Man]

So what do you think LeeTV? To me this still looks a good and well run company - obviously impacted by general market trend. Considering buying more stock - but obviously a punt on timing market bottom.

Ideas?

 

[munga]

nice little uptrend happening and looks good on macd. all new to this thought of buying in today any thoughts

 

[LeeTV]

I've been holding for quite sometime. Been on a long up trend now for months. Tighly held 118 buyers for 390,643 units 5 sellers for 7,696 units MACD is looking good, as you say. I'm far from an expert but imo there is more in the tank for this one before consolidation.

 

[munga]

thks lee. did buy in at $2.06 and took off. cant believe buy/sell ratio, im a bit confused on exit price will wait to see if sellers enter in the next few days?

 

[LeeTV]

thks lee. did buy in at $2.06 and took off. cant believe buy/sell ratio, im a bit confused on exit price will wait to see if sellers enter in the next few days?

Plenty of upside left. Opened at $2.40 this morning. Analysts reports have been good and expect a 100 - 200% increase in the next few years, I'll try to dig them up and post them later.

 

[LeeTV]

In relation to the announced equity raising most brokers reports, that I have read, have upgraded their forecasts to an average of around $2.46(close today of $2.15), not that I take much heed of brokers forecasts but thought it worth sharing

Macquarie: Upgrade to Outperform from Neutral $2.87 23.3%
BA-Merrill Lynch: Upgrade to Buy from Neutral, High Risk $3.40 35.3%
UBS: Downgrade to Neutral from Buy $2.30 4.3%
Credit Suisse: Outperform $1.25 - 76.0%

Details of the Offer
Eligible Shareholders are being offered the opportunity to
subscribe for 1 New Share for every 2 Shares held on the
Record Date at the Issue Price of $1.50 per New Share.
This represents a discount of 36% to the closing price of
Photon Shares trading on ASX on Friday, 14 August 2009
and a 26% discount to the theoretical ex-rights price on
that date.
Shareholders should note that the Offer is
non-renounceable. This means that your Rights to
subscribe for New Shares under this Offer Document
are not transferable and there will be no trading of Rights
on ASX.

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00978474

 

[LeeTV]

PHOTON GROUP LIMITED
Pre Conference Interview

Photon Group to present at the ASX 2009 Small to Mid Caps Conference - Mr Matthew Bailey, CEO

http://www.brr.com.au/event/60613/partner/theaustralian

Conference is held on the 29th October, 2009 in Hong Kong

 

[excalitez]

PGA appears to be a well run company with fairly stable profits even through this downturn.
$1.7 mark appears to be a magic zone, any thoughts?

 

[bryos]

I held onto PGA for a while and sold out of them around the 1.70. Just had a quick look again and was suprised to see them down so much.
Does anyone have any views?

 

[zzaaxxss3401]

Most companies raise capital to expand a business. By the sounds of this latest release, it sound like they're using a life-jacket to stay afloat in the Pacific Ocean:
"... Photon is undertaking the capital structure review primarily to put the Company in a position to meet future deferred consideration payments and to ensure compliance with the financial covenants contained in its debt facilities..."

 

[zzaaxxss3401]

Just received my prospectus today and I don't get it.

They are looking to raise around $102 million, simply to:
* Pay down approximately $67 million in debt (from $274 million to around $207 million - a reduction of between 20-25%)
* Pay deferred consideration payments of $22.5 million due on or around 30 September 2010 (was 30 June 2010).
* Pay fees of around 12% for raising the capital.

This is also going to increase the number of issued shares from 187 million to 1,546 million (1.5 billion).

Dividends are likely to be frozen until 2018. They'll still have $200 million in debt after capital raising. And at 10% interest and a forecast of $20 million in Net Profit After Tax for 2010(FY), how do they expect to grow their business.

Is anyone going to be taking up the share offer? Is this a dead duck and should I be cutting my losses now? Any ideas?

 

[edurden]

I realise this is a super old thread, however..

What do people think of Photon Group now? Given the appointment of Jeremy Phillips and major restructure/debt reduction?

I got in at 0.089 hoping for a turn around...big gamble but I like the outlook and vision of the new management team...

 

[skc]

I realise this is a super old thread, however..

What do people think of Photon Group now? Given the appointment of Jeremy Phillips and major restructure/debt reduction?

I got in at 0.089 hoping for a turn around...big gamble but I like the outlook and vision of the new management team...

I have some quick analysis on PGA here.

https://www.aussiestockforums.com/forums/showthread.php?t=21005&p=605458#post605458

One for the patient and risk-tolerant speculator. Keep your position size sensible.

 

[edurden]

thanks SKC.

Anyone know when their next financial results announcement will be? Their site isn't up to date...

 

[edurden]

Anybody? I've invested a fair bit in photon so I am interested in tracking...

 

[robusta]

Anybody? I've invested a fair bit in photon so I am interested in tracking...

Still too much debt for my risk tolerance, cash flow not exactly strong and low ROE. Hope for your sake management can turn this around.

 

[zzaaxxss3401]

I'm still holding but only because it would cost me more in commissions to sell than to continue holding. I was caught by the trading halt / capital raising for 10c. I'll probably cash them in closer to June 30 in order to trigger a capital loss.

I think they were lucky to survive - their capital raising was to pay off debt rather than "expand" the business. As such all they did was dilute the share value with no gain to the shareholder. I didn't participate in the share offer - didn't see why I should. Glad I didn't... I'd be down 15%. No dividends until next century. Still large amounts of debt. And no sign of turning things around in the short-medium term.

 

[skc]

Anybody? I've invested a fair bit in photon so I am interested in tracking...

With PGA you are buying a 'potential' turnaround... with lots of risks. So you much keep your position size in check, and be prepared to lose 50-100% of your capital.

 

[edurden]

hmm...im a fairly inexperienced investor.

I bought in given the refinance and the new direction set by Jeremy Phillips. They also seem to have recruited some high quality talent. I bought in 10k worth fully aware it was a risk but looking for the turn around.

In my inexperience I attempted to day trade with a further 8k when the price was moving between .088 and 0.09 - got them at .088 then got caught when they dropped a little, now sitting at 0.085.

Hoping for a positive announcement to boost the price before I reduce some of my risk...