News blog

Porta Communications

• BY: Andrew Hore |
• POSTED: 09/05/2013 |

Porta Communications reported revenues of £8.38m in its first full year in its current form and a strengthened balance sheet means that the company has a solid base from which to grow further. 

Porta was originally a shell and there were some initial revenues in 2011 but 2012 represents a better representation of the marketing and communications provider and the revenues were better than expected. Acquisitions were made in 2012 so the underlying revenues are greater. Annualised revenues were £16m plus.

Even so, there were still costs in building up the business and revenues from the start-up operations are still lagging those costs. Offices were opened in Germany and Belgium last year and highly paid management were taken on across the group. Two advertising business that were acquired last year have been combined under the Twenty20 brand.

A loss of £4.63m was reported for 2012. That excludes a £486,000 loss from the media bartering and sports consultancy buinesses that have been sold. Legal and consultancy central costs were £1.5m during the year but these should fall following the ending of litigation related to Media Square.

There was net debt of £3.29m, excluding contingent consideration, at the end of 2012 and the balance sheet was strengthened in March when £4m was raised in a placing at 10p share. Most of the borrowings are from Hawk Investments, a company related to Porta chairman Bob Morton. Since the year end, the loans have been reduced and there is £450,000 repayable by March 2014 and a £2m bond repayble at £2.86m in March 2016. The additional payment is equivalent to the interest that would have been paid.

Some of the cash raised was spent on market intelligence firm Cauldron Consulting and it will also be used to finance the expansion of Porta’s operations in Asia Pacific. There is already an office in Hong Kong. An office in Beijing is planned.

Porta expects to move into profit and it recognised a deferred tax credit of £196,000. There are a further £5.2m of tax losses.

At 9.38p a share, Porta is valued at £13.8m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFApril2013_43.pdf