Ever since Plus put themselves up for sale in early February, the company’s long suffering shareholders have been waiting on tenterhooks to find out if management have managed to obtain a fair value for the business. The companies woes in recent years, that have variously involved the departures of both former CEO Simon Brickles and more recently the ex Chairman Giles Vardey, have weighed upon the share price. Amara Dhari one of the largest shareholders in the Group holding some 17% has been in the vanguard of pushing for management changes ever since their investment of £5m at a price of 7p per share in Sep 2009 began to turn sour.
With the clock ticking ever closer to the 11th hour and a postponement of the AGM, which is now due, it looks, in unison with Plus’s update to the market on the 17th April in which they stated – “The Board hopes to be in a position to make a further announcement in the coming weeks”, like news is imminent.
With the shares now trading at a penny, resulting in a market capitalisation of just over £3m, it is hoped that the expressions of interest by multitude parties will result in some restoration of fair value to Plus shareholders. Simple mathematics show that that accumulated tax losses that run to in excess of £30m, even discounted back (similar to the Vodafone – Cable & Wireless attraction), are worth more than the current market cap.
Throw in the current cash balance which is now likely around £2.5m and add the value of their principal asset – Plus SX [which is widely deemed to be worth x 2 revenues (£6m)] and a value of 2.5 – 3p could easily be applied. This of course excludeS the DX business (and which has received other expressions of interest recently prior to the for sale sign being hoisted) and the TS (Trading Solutions) platform that has been held out as a potentially large profit generator.
The mining entrepeneur Bruce Rowan has steadily bought shares at an average of just under 2p during the last 18 months, accruing a holding approaching 20%, and it is hard to see him not looking to make a modest turn on his investment. Stories of the company being allowed to fold we believe are just scaremongering, and that if a fair value could not be found for the business as a whole or in part, that AD and the other shareholders would likely support a re-injection of capital to allow the business to move forward.
We will watch with interest how this saga turns out in the very probable short term.