Nastid, you know the product and market and thanks for sharing your views. I don't believe many ordinary investors would have this understanding. Thus the under performance in the share price is due to inertia through the absence if good news. PR has been ok bur there's nothing exciting. A lot of late nights and hard work I'm sure. But nothing earth shattering. It's not even a year since OSS acquisition and inter duration takes time. But were is the really big knock out deal. The restart of production with new machines in Canton may excite the engineering types, but it isn't going to touch the blue paper. On another note, the directors must be concerned about their share incentive. They've made nothing in a period of very high earnings for businesses in general. They are at least sharing our pain.
For what it's worth I don't think the current position is much to do with the insurance issue. The negotiations were difficult as you'd probably expect in any situation, and since the reactors are of a new design, rather than like for like, this would've complicated things. The drag will be the natural effect of operations being disrupted for effectively a year (including re-permitting, client re-engagement etc), even with/if insurance pays out generously. There is also the matter of the outstanding ventures with Southern Oil, and ESSAR, with the latter being less likely. I'm still expecting OSS to be being doing well, although how much feedstock competition will have hampered this, is currently unknown. I'm expecting the strong pound to have mitigated this somewhat from those competing outside the UK. A few years back, it looked like transformer oil was the poorer cousin of motor/industrial oils, but with general capacity for the more expensive to produce naphthenic oils shrinking, and more so for high quality products, Hydrodec's main focus is back in the limelight. There looks to be over capacity in motor lubes as refiners switch to the easier to produce group 2/3 oils, including those that produced fuels which has seen a margin crash. Still, there remains a good market for premium products, and for a company with high quality/high recovery re-refining rates, to make further industry deals.
Hi Bazz, those who have been invested the company for some time know that the product is a winner and that management did everything last year to make this a truly commercialised entity. The problem is the insurance settlement as you rightly say. For some reason management are being very coy about the value of the claim. They probably don't know the amount but that's because either they or the insurers are playing hardball. I am truly confident that the company will be very very profitable but the horizon has become more distant. We seem to be approaching the land of making a lot of money in a sailing boat rather than a speed boat. It will come but the head wind has been stronger than expected. Personally I don't hold out much hope of good figures on 30th. I've learnt never to expect too much and then you're not disappointed ! The interims should be finalised now. There may be some good accruing for lost profits. That would make a huge difference. I suggest management invest in a new outboard motor to get this boat moving !
Morning All, I hope your all getting to enjoy some sun! I was wondering what the consensus is on next weeks Q1 earnings. My view is that Canton off line volumes etc of SuperFine will be minimal and therefore numbers low but this will be expected? so if this is posted can you all see a drop in the SP? I think the main focus will be on the numbers generated by OSS - I have previously stated my thoughts on this. A fantastic purchase and as such I am actually quite excited about their first set of unburdened numbers, it would also be nice to know how much the supply competition has affected everything. I am nervous at the moment as until we get the insurance resolved the SP will remain clipped but with that rectified I think there is a definite5-10p of upside. Lets hope that the BOD can pull something out of the bag- best day in the office would be Insurance settled this week and OSS group paying its way next week even as an optimist thats asking a lot!!
9 Jul '14
Bought back my flip out
just sub 11p...if nothing else, this is a trader's temptation
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