PCG Entertainment Plc (LON:PCG) is a trading and media distribution company that develops and capitalises on media and other technology opportunities.
Its main area of focus is the Asia-Pacific region and, in particular, China, where it has worked with Chinese production companies to adapt popular western media properties to the People’s Republic.
Two years ago, the description of the company would have centred on Center Point Development Corporation (CPDC), a company that has a licence to distribute games and gaming software in Asia, as that was the company’s breadwinner.
A dispute with a principal customer over trading terms previously agreed proved insoluble, however, and the business was sold off in January 2017 although the group retains its various licences for operating games and other media content in the People's Republic of China.
Since then it has raised funds and is looking to strike out in new directions.
Looking to clean-up in environmental technologies
In April 2018, the company announced it was in discussion with Dubai-based Cavitation Solutions to distribute their cavitation technology in China and elsewhere in Asia.
Cavitation Solutions is an official environmental solutions provider to the Regional Organization for the Protection of the Marine Environment and the Marine Emergency Mutual Aid Centre to deal with various oil and other environmental pollutants throughout the Gulf region.
Approval from the marine agencies means it can provide environmental solutions, including waste oil collection and processing; oil spill and oil contamination clean-up; contaminated and wastewater treatment; remediation of contaminated land and environmental emergency response.
Its technology can separate different types of fluids and is applicable to food waste, oil and water, and the partial desalination of salt water.
We say distributed smart ledger technology; you say Blockchain
The company is also in talks with ChainZy PLC, a company with a platform that uses Blockchain technology. These discussions are around the possibility of ChainZy using PCG's infrastructure in Asia to distribute its technology in the region and may involve PCG making an investment in ChainZy PLC ahead of a possible flotation of the latter.
ChainZy is a company well known to PCG as Michael Mainelli, a director of PCG, is a shareholder and director of ChainZy.
PCG announced in June that ChainZy’s initial public offering (IPO) process is progressing well.
Both of these potential investments would seek to leverage the group’s existing distribution infrastructure in Asia.
They may seem a long way away from PCG’s historical main area of focus, which is gaming, but the company is clearly not hung up on sticking to one field; it goes where the opportunities are and where it can add value.
It has not, in any case, forgotten the gaming market and remains in discussions with a third party for the use of its media and gambling licences for the broadcast of certain sporting events over the internet in China.
It has previously said it might look to get involved in a joint venture to exploit those licences and has not ruled out adding more licences in the future.
It’s all a bit “blue sky” at the moment
PCG Entertainment shares many characteristics with a cash shell at the moment, albeit with some history and valuable licences. As such, from an investment perspective, whether you back the company depends largely on how you feel about the sectors PCG has focused on and the geographical areas it is targeting.
Chairman Richard Poulden believes the irons it has in the fire have great potential.
“We’re looking at application of Blockchain that we might use our Asian distribution structure to get involved with,” Poulden told Proactive Investors.
As for Cavitation, he said the pre-approval by the maritime agencies to do oil clean-up work was a “very significant step forward” and that the Cavitation engine is extremely interesting.
“We’re looking at applications for that worldwide, outside the Middle East,” Poulden said.
The company recently terminated an equity-sharing agreement with D-Beta One that led to D-Beta offloading its 98mln shares in PCG, thus removing a stock overhang from the market.
“From a shareholder’s point of view, there is now no downward pressure on the share price and if we have good news flow, which I believe we will, then that should deliver an improvement in the share price,” Poulden said.