Porta's 'amazing' share price holds back acquisitions, says CEO David Wright

Porta CEO David Wright says acquisition opportunities in the PR and marketing sectors are better than during his time at Citigate from 1988 to 2003, although he will not look to raise money for purchases until the group's share price grows.

David Wright: "People are nervous about spending money"
David Wright: "People are nervous about spending money"

The company yesterday said it expected fee income to have almost doubled during 2014, when it made four acquisitions.

Wright told PRWeek the "bulk of the growth" was on the PR side; the firm’s PR agencies include Newgate, Redleaf, PPS and Publicasity. The latter two agencies were secured in late 2014 and Wright said the process of relocating them to Porta’s City of London head office had been "incredibly efficient and smooth – I would say ten times better than I thought it would be".

In December Wright told PRWeek that he would "definitely" be making acquisitions. But on Wednesday he said an "inhibiting factor" was Porta’s share price, which closed the day at 7.4p, giving the firm a market capitalisation of £18.7m.

"Given that we’re growing probably ten times faster than anybody else in our sector, it amazes me," he told PRWeek. "My Australian subsidiary is so good, I think it’s worth more than the whole of my market cap."

Wright said he would "absolutely not" be issuing new stock while the share price remained where it was: "I’m going to have to be a bit more creative about how I raise the funds if I want to do acquisitions going forward." More gearing could be one option, he suggested.

"You can look at a number of areas – I have no plans at the moment. I’m still hoping that the penny will drop in the market about what we’re doing and how well we’re doing eventually. I’m just waiting for that to happen and we can review everything," said Wright, who co-founded Citigate in 1988 and was a director of its then parent company Incepta Group until 2004.

He added: "But there are a lot of opportunities. I would probably say the amount of opportunities is better than at any stage when I was at Citigate. I don’t see many people out there looking to buy companies. People are nervous about spending money, I think."

Yesterday Porta announced that it would discontinue its media and creative agency TTMV as it had "not performed in line with its budgets".

"It had a couple of clients that reduced its spend quite considerably, and other things didn’t go well," said Wright. "I gave it a big opportunity, I’ve supported it as long as I could and I just didn’t want to hold back the rest of the group."

He said the reason for acquiring the group was to enlist the services of Porta’s chairman Bob Morton, who founded TTMV’s predecessor.

"If you ask me was it worth it, I would say categorically ‘yes’. Bob’s been a major supporter of our group both from an equity point of view and from funding."

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