Peoplebank boss claims all is sweet after share price plummet

by Stan Beer

Thursday, 31 July 2008

Page 1 of 3 ! The share price of Australia's largest IT&T recruitment firm Peoplebank may be less than half its  value 12 months ago but managing director Leon Lau claims the company is sound. Mr Lau blames the market's current fear of microcap stocks for Peoplebank's greatly diminished value, but some sources say the $100 million cash acquisition of Ambit in February is responsible. As far as Mr Lau is concerned, the current share price woes of Peoplebank are symptomatic of a general market downturn which always tends to punish the smaller stocks more heavily. "It's got nothing to do with the operations of Peoplebank or the integration of Ambit. It's got all to do with the fear in financial markets of microcaps," says Mr Lau. "If you have a look at the whole recruitment sector including Clarius, Talent 2, Rubicor and all the rest of them, you'll see that up until recently, we fell less than anybody else." When Peoplebank acquired Ambit for $100 million, $50 million was provided by private equity group Navis Capital, which now has a controlling stake in Peoplebank, a further 10 million came from "sophisticated investors", and the rest was made up by $40 million of borrowings from two banks, Commonwealth Bank and Westpac. It is that $40 million in debt to fund an acquisition of another recruiter when the market was near its peak that has raised some concerns in the marketplace about Peoplebank. However, although Peoplebank's market cap is now just over $53 million, Mr Lau dismisses any concerns that may be held over the company's debt level. Please read on to page 2 << First page <   1 2 3 Next page > Last page - Post your comment >>

 

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