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Has Mr Market forgotten the great acquisition here? The positive inertia within the business is a given; looking forward to the interims/update.
The H1 update may drop this morning, looking forward to progress which should include first numbers from the deal with the large global tech leader that shall not be named amongst many other deals signed last year, also details of any upfront platform deal payment’s signed in H1 and the progress with the integration of DOCOMO will be interesting which according to the recent loan RNS excellent progress has been achieved
My reading of the situation is that before the Docomo takeover Bango was increasing their headcount significantly. The Docomo takeover resulted in Bango increasing its headcount cheaply and at a much greater rate. They now have more than double the headcount they had a year ago. They have plenty of product to sell including to lots of new geographies. The extra money will enable them to put their additional staff to good use more quickly than would otherwise be the case. 2024 should be a very good year for Bango.
You saved me the job P167, why could they not just have said all that in the RNS yesterday
Poor comms
Https://bangoinvestor.com/what-benefits-will-the-8m-loan-deliver-to-bango/
I just bought 30k this morning, 45k turnover so at the very minimum 66% buy / 34% sell ratio and the price falls.
All my buys were priced virtually at the bid price so it does look like ongoing seller in the background, happy to be paid the bid to offload.
I’m confident the seller is pushing the price down and it will bounce once that sell is complete and/or results updated in July.
From the RNS 30th August 2022
Bango strategic partner and shareholder, NHN Corporation, has stated its intention to offer Bango a $10M three-year term loan on commercial terms (the "NHN Loan"). If Bango chooses to accept the NHN Loan, terms would be finalized at that time. This additional funding would be used to accelerate the restructuring and migration if required[3].
So the original intention of the loan was to accelerate the restructuring and migration rather than now just progress as per the RNS yesterday, huge difference in meaning between the 2 statements which could indicate cost overrun on the restructuring and migration thus the market reaction
In relation to the statement that a stronger balance sheet will assist in signing up the next wave of major customers for the DVM there is probably a requirement in the T&Cs of the deals that Bango need to maintain sufficient cash balance for a period of operation so maybe they had no choice but to take the loan to progress the integration and keep a healthy cash balance not only in relation to attracting new deals but probably staying within the T&Cs of already signed deals especially as many of the deals involve up front payments
Maybe as you say it could just be poor comms so let’s see what the trading update tells us in July and let’s hope it is July
Bit of a confused RNS. Larbey says “I am pleased that Bango is able to apply additional capital to progress the integration of DOCOMO Digital. The stronger balance sheet will assist in landing the next wave of major customers for our market-leading Digital Vending Machine technology”. So is it related to the integration or new business - which is it? And why would a stronger B/S be required for the integration to complete?
I’m sure this is all innocuous and will be explained early July - and after all, Larbey also says that progress has been “excellent”. Clearer comms would help though.
A potential 0.4% dilution, if the warrants are exercised, causing a 3.4% (at the time of writing) share price fall seems a bit of an over-reaction to me. Other than that potential dilution, I am not aware of anything else changing and the RNS is generally positive, in my view.
Odey must be nearly out now
Maybe just see this as a nice buying opportunity especially if you can hit the low point, from the RNS he still has a chunk of stock to offload so further drop expected and somebody must be buying albeit at discount to market value and considering the volume of stock he is dumping on the market the SP is holding up well
Spoke too soon, with Odey having offloaded almost 2m shares.
Starting its climb back up as it usually does towards the end of each half year. Would be nice to see it back to the 260p it reached previously before its inevitable retrace.
Stuart, I can safely say something has gone wrong with those IC figures. With 77m shares in issue, EPS of >£5 per share would be £385m. In fact cash profits are estimated by Singer to be $12m, or about 12p per share. So EPS would be less.
Investors Chronicle gives the following data in the 21 April edition. EPS NTM 514p. The same figure one month ago is 380p and 3 months ago it was a mere 8.6p. With the estimated earnings per share over the next twelve months being about 2.4 times the current share price, and the estimated figure increasing so rapidly over the last three months without having much of an effect on the share price, I am wondering if the data is correct. Has anyone else seen these figures quoted elsewhere?
Looks like Simon's article is being ignored. He is a bit like a stopped clock in that it will be right at some point during the day. His previous BGO call a few years ago ... tipping at 280p only for SP to collapse to 59p. GLTA.
Wow, $49m revenue this year forecast by Singer, plus cash profit c$12m. More than I was expecting but I guess the revenue can be rationalised as follows: take the 29m for 2022, add a further 10m for a full year from Docomo, add 1.5m from the business sold last year that’s now being spread over several years - that’s over 40m. Then add in organic growth - say 25% of c24m ex-Docomo - that’s $46.5m. So seems plausible. And then next year we get the first real contribution from the Tier 1 client. Exciting.
As suggested yesterday, Simon Thompson is bullish on BGO in IC on-line this morning:
https://www.investorschronicle.co.uk/ideas/2023/03/28/bango-s-profits-soar-after-its-game-changing-acquisition/?xnpe_tifc=bI1d4D_pxkoDhunXhkbdh9psafeWaeiWhFW5adLcbue3aG8Lbj43nkPlbdicauU.EG8.adJSxI4_4fQN4dUsx.zdbf4NO1TT&utm_source=exponea&utm_campaign=Investment%20Daily%20Email%2029%20Mar%202023&utm_medium=email
Concluding para:
So, although Bango’s shares have succumbed to profit-taking in the past three weeks, having previously rallied 39 per cent after I rated them a buy, at 195p, at the interim results (‘On the money’, 29 September 2022), the upside potential could be material, as highlighted by Singer’s 385p target price. Buy.
Totally agree regarding the underlying business iWantThatOne, and thanks for clarifying about the admin excess, I’m down at present but tempted to add shares at the current SP as I do have faith that as a long position this will do well.
Admin expenses went up by c$11m, much more than the increase in revenue - mostly because of Docomo. The $21m synergy savings that are targeted will correct this throughout 2023. There was also a $5m hit due to FX, which is fair enough. I think both of these have deflected from how well the underlying business is still doing.
There was clearly a big write off given given $5m pre tax earnings then swung to a 4.8m pre tax loss, I was extremely surprised to see the SP drop so much yesterday particularly given the recent upward trend, however despite a large sell off yesterday I’m holding tight with BGO as I feel going forwards this will prove a decent return.
I think the market may have misunderstood the progress the company has made. Whilst the results show a widening loss, they don’t yet reflect the majority of the synergy savings from the Docomo deal, nor the bulk of the additional revenue that will come from that in 2023. Add in organic growth and this year should see excellent results. I’d like to see analysts’ expectations for the year.
Quickly read the RNS and thought 'this is all pretty good' - so why the share price fall. Then read the Alliance News headline about the loss widening - had to then re-read RNS to find mention of that - well hidden - nice!
Suspect a number of Traders who were expecting a results bounce are departing.
Overall financials and prospects remain very good so now look forward to the mid term update.