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Pebble Beach Systems Group PLC (PEB)

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WickedLester
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Pebble Beach Systems Group PLC (PEB)

#401133

Postby WickedLester » April 2nd, 2021, 3:02 pm

I've been finding it harder and harder to find value in stocks lately as so many of them have risen a long way from early last year but here is one I think could have substantial upside in a recovery albeit it comes with more risk than I usually take.

https://www.pebble.tv/
.
This was once Vislink but after some fairly disastrous mismanagement ended up as a standalone software company servicing the broadcast sector.

The market cap at 9p is about £11m and debt of over £7m takes the enterprise value to over £18m. The balance sheet is a bit weak with net tangible liabilities and net current liabilities but does show an improving trend. Net debt is also falling as the company seems to generate a fair bit of cash for its size due to the excellent margins.

In the last full year the company managed revenue of £11.2m and EBITDA of £3.8m. Reported net profit came in at £1.45m.

https://www.investegate.co.uk/pebble-be ... 00073994L/

This year has been tough for them, they claim due to coronavirus, and the most recent trading update suggests revenue of £8.4m and EBITDA of £2.6m so it has remained profitable on reduced turnover. They also expect the trend in debt reduction to continue.

https://www.investegate.co.uk/pebble-be ... 00102892P/

Kestrel Partners, who specialise in investing in software companies have built up a 29% stake and I believe they will wait for trading to improve and then force a trade sale of the business. I am hopeful that in a couple of years it will go for 20p+

https://kestrelpartners.com/

Therefore I have bought on the basis that there may be over 100% upside in a couple of years time as long as trading recovers once the pandemic is under control. Even if they just tick along at the reduced turnover I believe they are worth 9P a share.

Anyone have a view?

GrahamPlatt
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Re: Pebble Beach Systems Group PLC (PEB)

#401147

Postby GrahamPlatt » April 2nd, 2021, 4:19 pm

Just that it seems unlikely that covid would have been a drag given the nature of the business. Need to look for another explanation.

WickedLester
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Re: Pebble Beach Systems Group PLC (PEB)

#401314

Postby WickedLester » April 3rd, 2021, 9:11 am

GrahamPlatt wrote:Just that it seems unlikely that covid would have been a drag given the nature of the business. Need to look for another explanation.


I must admit I was a bit sceptical at first but then commercial broadcasters have seen quite a large fall in their income in the last year so I guess this could easily affect their spending plans. It's probably not such a bad excuse for last year's poor performance.

WickedLester
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Re: Pebble Beach Systems Group PLC (PEB)

#407562

Postby WickedLester » April 28th, 2021, 9:10 am

These published their final results today and they are pretty good all things considered.

https://www.investegate.co.uk/pebble-be ... 00047983W/

EPS of 1.0p

Net debt down to £7.7m after strong cash generation

More importantly to me the order intake in the first quarter is up 86% on the same period last year.

I still think these are good value and remain convinced they will go in a trade sale for significantly more than the current price in a couple of years time. As a result I bought some more this morning.

WickedLester
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Re: Pebble Beach Systems Group PLC (PEB)

#409162

Postby WickedLester » May 4th, 2021, 8:01 am

It seems Kestrel have had a man appointed to the board (they usually do)

https://www.investegate.co.uk/pebble-be ... 00133144X/

Chris, a qualified chartered accountant, is a partner at Kestrel Partners LLP ("Kestrel") and is their Head of Research, with a primary focus on the Kestrel Opportunities Fund, which puts an emphasis on smaller quoted companies and pro-actively working with management to improve their value.

I certainly hope he can improve the value of PEB.

Walkeia
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Re: Pebble Beach Systems Group PLC (PEB)

#410613

Postby Walkeia » May 9th, 2021, 7:32 pm

Interesting; the only thing is I don’t quite understand what the company does exactly. Can someone translate this?

Company Overview. Pebble is a world leader in designing and delivering automation, integrated channel and virtualised playout solutions, with scalable products designed for applications of all sizes.

WickedLester
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Re: Pebble Beach Systems Group PLC (PEB)

#410669

Postby WickedLester » May 10th, 2021, 7:43 am

I'm not sure exactly what that means either. All I know is that they provide software to the broadcast sector and seem to do it profitably and generate quite a bit of cash doing it.

I'm hoping for a better year this time and a further reduction in net debt. The only reason the balance sheet is so bad is because they don't seem to have been paid all of the money they were owed for Vislink.


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