Unfortunately you only have to review the Edison report to see why price keeps falling . Declining margins in low, sustained oil price environment, no profits for some time, more worryingly no free cash flow for longer , delays & problems in their DNA despite sweet PR chat...and the report present the UK facility as a done deal rather than med/high risk on planning approval! Who would want to buy into this vs other opportunities: maybe directors if it's a steal - no sign of that sadly.
Current SP 50% discount to fair value in the Edison report, given current assumptions; happy getting in on that undervaluation. Company has certainly been 'unlucky' and that has knocked the SP, but that is behind us. Raising money from banks in this climate is tough for any company, but Hyr is fortunate it doesn't need to ask, as we have a very aligned majority shareholder. Most companies on Aim require a tiptoed view to see the horizon, but I feel comfortable with the board, the product and the discount to value at the current SP.
At last some numbers....Edison who do you think they are writing this on behalf of?...and the balance sheet is horrible...look at net assets( what company owns) over forecast period...look at cumulative cashflow( when will it ever generate net free cash).If the best they come up with is 11.3p gla!Dogged by bad luck & operating in a low oil price environment makes for a weak future.The latest short term loan( by major shareholder who at least hadn't shafted them on interest rate) reconfirms they need funds....no bank likely to touch them...do shareholders have the appetite to fund if real value way over the horizon ?
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