Photon Group shares drop a third in a month
Troubled Photon Group’s shares have sunk to the lowest point in the company’s history, with the capitalisation of the marketing communications group falling below $100m for the first time.
The company, which relisted its shares on the ASX at 10c nearly three months ago, has since seen that value decline by 45% since that emergency recapitalisation
Today the shares were trading as low as 5.5c, giving the company a market value of around $85m. The company’s share price has dropped by 34% in the last fortnight alone.
The company has not issued any new updates to the ASX that might explain the latest falls, although there was a flurry of trading of its stock late yesterday and again at lunchtime today. One potential explanation for the movement is that it was excess stock from the placement which is now working its way into the market.
Photon’s agencies include BMF, BWM and Naked Communications. The group hit the rails when it emerged that it was goign to be unable to pay what it owed the foudners of some of the companies it had bought.
Although the company made it through its recapitalisation, when Photon’s annual report was published last month it was clear that it still faces a tough time to stay afloat.
The company has debts totalling $273m due over the next two years. The first deadline is the end of next March when around $39m becomes due. October 31 next year sees another $77m worth of debts become due. Another $38m becomes due in April 2012. The final $121m becomes due at the end of October 2012.
The company has so far drawn down $283m of its $316m credit lines, leaving it with a further $33m available. At the same time last year it had $83m available.
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This would almost make them a buy now that debt is paid down and the earnouts off the books.
What’s combined earnings these days?
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Hi Tim2,
I’m not sure all the debt is paid down just yet although the recapitalisation did buy Photon some time.
Cheers,
Tim – Mumbrella
Another departure perhaps? Who’s left?
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You are wrong! You are quoting the maturity profile of the debt prior to the recapitalisation. Currently the situation is as follows:
Following the refinancing, and after the payment of Deferred
Consideration Payments due on or around 30 September 2010, Photon will have $206.8 million of drawn debt against facilities of $230 million. The term of the new debt facility is 30 September 2013.
You should get your research done first before publishing!
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still looks ugly no matter which way you look at it…
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Hey Guys,
I think the Photon bashing should now officially cease.
The rats have left, leaving only the good guys with a state of affairs as bad as GW left Obama.
Rather than the greedy tall poppies as before, they are now the underdogs in the fight, and it’s just unaustralian to diss the underdogs.
I’d like to see all the guys get the money they are due, and be given a fair go by the media, blogosphere alike.
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Hi Goldmember,
I’m not sure where the “bashing” is taking place. Unless you’re mixing it up with the word “reporting”. Or would you rather we just pretend it’s not happening?
You’re right – the people involved are part of the solution rather than problem, but that doesn’t change the fact that this is a big, ongoing saga.
Cheers,
Tim – Mumbrella
A buy back is whats needed. Return the agencies to independant shops with Photon financing staff shares and dump any crap companies that no one wants to buy. And learn a lesson – don’t do anything so silly again.
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Hi Tim,
My post wasn’t directed at you or Mumbrella. You have played the straight bat, always.
And it is a saga that should be covered.
My callout was to the people in the industry to acknowledge the good businesses and their teams who have been tarred by the few., God knows I have been as vocal as most on what was Suss.
But I reaffirm, we should support talent who have built great agencies, and wish them the best from this.
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Hi Photon watchers , (edited by Mumbrella for legal reasons)? they sold millions of shares just weeks before the trading halt- no sales prior .I would have salvaged 20000 $ if I had realised why they were selling at that time.
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(Edited by Mumbrella for legal reasons)
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Someone must have raised this with ASIC , they have a “whistleblower ” line on their site. (Edited by Mumbrella for legal reasons)
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Not all (edited by Mumbrella for legal reasons) ever deminishing pot of gold.
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What most people don’t realise is that Photon was primarlily propped up by the Field Marketing arm who contributed the lion’s share of ebitda to Photon. In particular The Bailey Group. Unfortuately as political games have been played out between certain “brothers” and Photon. As a result The Bailey Group has been (edited by Mumbrella for legal reasons) there is little hope of recovery – at least in the short term.
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hi Mumbrella,
are you in cohorts with (edited by Mumbrella for legal reasons)? and clearly shown in ASX company announcements-,you edited everything that Bob said rather than just omitting the peoples names.
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Hi Johnno,
No I’m not. Leaving somebody’s name out doesn’t negate an allegation if a reasonably informed person can still deduce who you’re talking about.
Cheers,
Tim – Mumbrella
Is Bailey Group still part of Photon (they are still listed on the website)?
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(Edited by Mumbrella for legal reasons) comments on asx posted major shareholder trading for Photon does not justify legal
censorship.
Am I allowed to ask who would look at an asx company posting listing someone as ceasing to be a substantial shareholder selling 3.75 million shares on 29 April 2010.@ 1.35$ .We know that a trading halt 5 weeks later resulted in shares recapitalised to 10 cents.
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