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DRB83, if you’re right I’ll be very happy indeed. Here’s hoping.
Retireby, the large step up in both revenue and admin costs was due to the inclusion of a full year of Modern Water. GB is forecasting £18m+ of revenue this year which all the growth will be organic (no acquisition). Organic growth will largely be achieved with small increases in admin costs.
I'd hope for admin charges being no more than £11m. Finance charges of £0.6m. Tax credit say £0.6m
Revenue £18m (conservative)
GP margin 57% (usually grows with growing revenues)
Gross Margin £10.26m
Admin charges £11m
Finance charges off set with R&D credit.
In terms of profit it will be close but cash is the main point. A big part of the £11m admin expenses is Depreciation/Amortisation (£3m ish) which are non cash expenses so from a cash flow perspective we should be generating cash in FY22. That is key. I forecast a £5.7m cash balance at 31 Dec 2022. Let's see.
Retireby40….at this rate you might need to change your moniker to Retireby50 ;o)
Admin included about £3m in amortisation as a consequence of modern water acquisition. This will not increase proportionately in 2022. DVRG will not make a net profit in 2022 imv but will be positive in EBITDA and cash generative before exceptionals.
The 50% increase in admin costs may well be too heavy but from 20-21 they increased from £4.561m to £8.732m.
So while revenue increased by a little over double admin costs weren’t far behind that. Anyway, it’s going to be very tight indeed and given of late we have over promised and under delivered I suspect we will be making another loss.
This is ludicrous.
In 2021 we had total revenue of £9.297m with cost of sales at £3.987m (42.89% margin) and admin expenses a whopping £8.732m and with other income the operating loss was £3.260m but with tax credits (R&D etc) we only lost £2.897m (would have been less but we had finance costs of £420k.
So this year they have had margins have suffered but let’s assume they’re the same.
If turnover is £18m then cost of sales circa £7.72m (42.89% of turnover) and even if we keep admin expenses the same (they will have increased a lot) at £8.732m that’s over £16.5m before we have finance expenses which will be a lot more but the same for the R&D tax rebate. My guess is admin expenses will have increased by at least 50% so now some £13m and we will be again loss making.
If only Shorteverything wasn't invested in DVRG they surely would have won the lotto! Fantasy football at its finest.
Now for a reminder of reality:
DeepVerge PLC's CEO 'very happy, proud of the team' after a strong performance
https://m.youtube.com/watch?v=jnNbc4H_PVw
Don't recall any speculation on these boards involving Avanceon or Al Amaq prior to recent company updates:
Microtox systems chosen to monitor water supply ahead of 2022 FIFA World Cup in Qatar
Largest single Modern Water monitoring systems deal worth £1.4 million
https://www.londonstockexchange.com/news-article/DVRG/modern-water-monitoring-systems-deal-worth-ps1-4m/15543852
Modern Water secures £2.1m projects for chemical wastewater and water desalination
All Membrane Brine Concentration projects in Asia and North Africa
https://www.londonstockexchange.com/news-article/DVRG/modern-water-secures-ps2-1m-projects/15564019
Which is strange given some of the claims here from those who claim to know better than the company itself what is happening...
Happy to receive spoilers of what to expect from Hangzhou Shangtuo Environmental Technology Co...:
@gjbrandon
@Modern_Water is now on a roll. A suite of skid-mounted and containerised desalination packaged plants, fully modular and near completion. Can be scaled to any size. Available in 20-foot containers for natural disaster clean water solutions. @DeepVerge #DVRG #AMBC
1:43 pm · 15 Aug 2022
https://mobile.twitter.com/gjbrandon/status/1559158856563015680
I believe in GB the Technology is fantastic. Here is the BUT the deals are to slow coming though for the amount of expenses they have now Don’t you think . Trill . I have business and run business if you get ahead of your self and have to many staff and not enough orders or production it only ends one way . You can not keep Borrowing money . Plus they need to buy MSYS and you know he will buy it with Paper which is a massive Red flag to me .
Keep the faith bud. What do you reckon a £100m plus stc deal would add to the sp? We're al guessing though so stick with your instincts.
Look i understand what your saying Trill . But saying 18+ million i believe by the orders Gerry is taking a risk here that orders will come in before End of December. If they don’t and more delays then what !! Another profit warning could happen . You have to
Look both ways . I am on a big big loss that money i could have invested else were and made more money or even got my loss back . I might buy more and average down one more time . Still feel more problems ahead as it always happens with DVRG if it gets to 16 i will think seriously of getting out and wait and watch to see if these deals happen . Before year end
Good luck to you bud. I know you already have a huge holding that I'm jealous of. The Guinness's are on you when this comes good.
The Board conservatively expects revenue to be in excess of GBP18m for the full year to 31 December 2022 , which is below current market expectations, leading to a smaller projected EBITDA figure, a modest reduction in gross margins and a slight increase in overheads.
"leading to a smaller projected EBITDA figure"
It does not say a loss, especially as they were only £17,000 EBITDA loss on half that amount.
£24m had £6.1m EBITDA in the original projections.
Costs increased in 2022, but I doubt double of 2021. However 2022 is expected to exceed £18m so the profit is expected to be somewhere between -£17,000 and £6.1m so hence the term "smaller projected EBITDA"
The estimated EBITDA for 2022 was presented back in August 2021 btw. https://www.deepverge.com/wp-content/uploads/2021/08/Deepvergeplc_Research_Update_3August2021__FINAL_BGv2.pdf
WE WOULD BE NOTIFIED IF MORE WAS TAKEN FROM THE LOAN, I have discussed this with Gerry so we can put that one to bed.