Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Am I right in thinking it has a fairly sizable crane on that? At 1500 tonnes?
I did a rough calculation looking forward on straight EBITDA for market cap (truly ridiculous as EBITDA is nominally 1/7th 10 1/10th of market cap.
At 80 million the SP is 23p (161p at 7 times).
Best of luck for the week.
TimmyTradeface...to answer your question: Because not all the vessels are equal and because the market is more interested in big class vessels atm.
In other words, it’s easier to find a contract for Seafox 5 than for a small class vessel. GMS has got 4 large vessels, 4 mid-size and 6 small size. If the 4 large and 4 medium sizes are all contracted and only a few of the smaller size were off contract, then the addition of Seafox 5 wouldn’t have been dead weight.
I need to add that with the sale of Seafox 5 by Seafox they ended up with a less attractive fleet, whereas GMS still got a good number of newer and better-maintained vessels.
It was something GFD mentioned could have been bought with a shariah loan a few years back.
I presume they were looking a using it for offshore wind farms or some such and decided against it.
As you say (its not a stupid question) there can be periods where the work has to wait until the boat becomes available. Or it can be a dead weight. I know it is similar to the ones already used by GMS.
It might have even been thought they could supply a pair and speed up time to completion of a project?
I dont know if there were others they would purchase.. But at the time the finances indicate the work was waiting for the ships. Not the ships waiting for work. With CO2 bargaining and renewables this could literally be political will (or party elected) or timing of elections that have some knock on effect on that score regarding contracts.
There are some heavily subsidised schemes (and quite rightly)
I just thought I would throw it in. At the moment with the low day rates paid it would take another ship to get the revenue back up to 225 million (219 before iirc)
must get to bed now. it will be an interesting week.
I hope this isn't a stupid question but what would be the point in expanding the fleet when the existing vessels are not all utilised? Surely that is just adding more dead weight.
There are so many red herrings to look at here.
just check out this buy marked as a sell! down the bottom of the page.no wonder people panic!
if they hold till the 2019/20 results come in they will have a tidy profit.
https://www.hl.co.uk/shares/shares-search-results/g/gulf-marine-services-plc-ord
btw seafox 5 would have added 22 to 30 million revenue had they acquired and found work for it.
I am rather looking forward to reading the results of the general meeting tomorrow. Whichever direction the shareholders vote, the main thing is we put an end to the distruption and allow things to settle into a new status quo.
Undervalued is the point.If you look back about 6 or 7 posts to the one marked "profitability" after reading this to confirm my point.The over the last year the share price dropped slowly then massively;There has not been much in the way of work (58% utilisation).The banking covenants have not been breeched after discussions with lenders..There is enough work there now to "better than break even" with long term contacts confirmed (and 72% utilisation).There could well be more contracts.There will be cost savings.There are loan renegotiations (probably leading to a better deal for GMS) Even before you take adding new contracts or loan renegotiations this year the company is primed to produce a profit at the of 2019.(I guess around 5 million, Adjust net profit of 30 million, EBITDA of 75 to 80 million, poss 90).Luckily the share price doesn't reflect this......get it while its going cheap. 30;s to 40's looks adjusted back.ROLL UP ROLL IP Cant help anyone more than that looking Monday.or Tues........save you searching a ton of RNS.
Quote from 26 pages back.
GFD.
"At the time that the Seafox RNS landed, the shares were trading at 20/21pps and rising. It really was an unwelcome intervention. We've yet to hear what our BoD makes of it."
As for the Revenue figures. Seafox 5. Shariah Loans.
The revenue in 2014 was 196 Million.
The revenue in 2015 was 219 Million,
I have not dug deeper nut I think these are around the same utilisation but 2015 having better day rates increasing revenue. I also believe (and again I haven't dug) but it tallies with me rough calculation in the earlier post of 194 Million for 100% utilisation..
Perhaps GMS would have been happy for an extra vessel or even 2. and could have found the work for it?
Perhaps the Shariah loan was aimed at that at the time? the numbers add up.
One thing is for sure.
I am sure if day rates are low and the work isn't forthcoming there are bargains to be had!
Perhaps the refinancing could include buying another vessel on the cheap!
They truly are amazing pieces of engineering.
mistake mid PROFITABILITY
FOR 2019 (ASSUMING NO NEW CONTRACTS........)
So that equates to around 139 Million Revenue.
Loss/Profit approx.4 to 5 Million.(Not Nil)
Adjusted net profit should be around 30 million. Or better with cost savings.
Adjusted EBITDA of around 75 to 80 Million.
Profitability.
GMS has been around for quite a while and has apart from its 2017 results always made a profit.
It made a profit when there was better than 180 million a year revenue. 30 million in fact.
Last year there was only 112 million revenue. 18 Million loss.
To achieve a base profit the company has to have a revenue better than 135 million I would hazard a guess.
This is where the increased utilisation should achieve this increased revenue.
After all a ship sitting idle is a double headache
1 it doesn't earn money.
2 Its still costs to sit idle.
Adjusted net profit is net profit after adding back non-recurring or non-operational costs.
GMS has made a profit every year taking this into account, however this was 46 million less in 2017 than the previous year. Halving the EBITDA too. Adjusted net profit being just 4.6 Million.
The increased utilisation should increase the revenue. from 58% to 72% according to the RNS.
FOR 2019 (ASSUMING NO NEW CONTRACTS........)
So that equates to around 139 Million Revenue.
Loss/Profit approx. nil.
Adjusted net profit should be around 30 million. Or better with cost savings.
Adjusted EBITDA of around 75 to 80 Million.
In line with my thoughts above. 140 Million turnover. Nil Loss.
With the increased cost savings applied to the 180 million revenue (first 3 years minimum revenue) this could estimate to the Adjusted net Profit to better than 70 Million and the adjusted EBITDA close to 120 Million.
All we need are the contracts to get the utilisation back up to 100%.and a revenue of 194 Million.
There is of course the possibility better financing to reduce costs. Better day rates to increase revenue.
But these are just a simple sliding scale I worked on based on utilisation and past profits/loss.
Just as a rough ball park guide.
Last of 4 posts (couldn't think of an easier way to do that).
I dont for a second think all my comments should be agreed with!
Seafox.
It has triggered al sorts of problems for the board. To the extent the board issued a statement saying if has not been helpful at this difficult time.
Although they state they are not direct competitors there is some overlap and to be honest they have bought a large stake at a bargain price.
My opinion is the price was in recovery it was almost back up to 18p when Seafox offered the 18pps targeting 25% as its goal.
This effectively "halted the price recovery" to within a few pence either side of 18pps.
In some ways at that price it was bound to happen, others in the industry would bound to "want in" I dont think there is a chance of takeover (unless people want to sell heir shares to Seafox at 18pps), it would need over 50% to have control and better than 75 to delist and become private. It could cost Seafox considerably more than it did to acquire more moving forward.
Both of these options would drive the price considerably higher.
The cost savings (apparently of between 15 to 20 million according to Seafox) and reduction in daily opex of around 30% would have tipped to company into profit looking at the last set of figures, that before increased utilisation.
Something to think about. GMS believed these figures to be incorrect.
It is easy to state all sorts of numbers.
The fact there will be cost savings and more importantly the board will see the need to be looking at their expenditure and procedures going forward can only be a good thing.
The fact there is now increased utilisation and that some new contracts have been finalised again WILL ease the pressure going forward.
Even if it doesn't give us all the answers yet. Seafox has started the ball rolling looking at operating efficiencies.
As you rightly say I am sure the BoD will listen to the proposals of major shareholders (what their suggestions appear to be at the moment are operating efficiencies) but there may be other radical proposals such as the refinancing.
The banking syndicate.
The was fair warning that the banking covenants may be broken, If they were then the existing debt could not be offset (reduced in size) against other operating finances.
That would have increase the debt had it been broken (I think the present loan agreement goes out to 2023 iirc).
I did read something about the exact percentages in debt offset somewhere on this loan but this would take a while to find again.
The covenants have not been broken therefore the debt size remains reduced (offset against other financials) so in that respect it was a big problem taken care of.
This has been completely overshadowed in some respects by other news associated with GMS.
When it comes to renegotiating the loan agreement, all we have to go on at the moment is "GMS is in discussion".
As you rightly pointed out there is the possibility if shariah loan.
Perhaps that could be brokered through the present board members?
There are significant shareholders (non board members) who may maybe also able to broker this deal (and who may be appointed to the board) but this is beyond my ability to see if it is a real possibility that the banking syndicate would be prepared to offer such assistance.
The fact the covenants were not breached and the fact they are in discussions with the lenders to renegotiate all sounds positive. I would imagine the long term confirmation of contracts and year end figures and cost savings and increased utilisation might figure into these negotiations? That would be my best guess.
Maybe a board appointee or two on monday could change the situation, I certainly would expect an RNS Tuesday about the vote and the meeting (possibly even late monday).
Hard to say if the Banking syndicate would feel more comfortable with lending changes or change its position with additions to the board?
"in negotiations" would lead GMS to get a better deal at the end of it. Regarding debt servicing. I would think..
There is an awful lot in that last message. I will post an answer para by para is the easiest way I can think of.
The chairman (and board appointments).
From my experience you are correct, board resignations cause a big level of nervousness and thus priced in fear.
Equally sometimes board turnover.
A new appointment or replacement giving change of direction or vision can have a massive influencing factor.
There have been two major appointments since the Chairman resigned. Neither had a positive effect on the price as one would expect.. The same with confirmation of long term contracts.
The resignation of the chairman was brought about in some part by Seafox.
The planned savings by GMS (6 million) do seem prompted by Seafox, however GMS has also warned the Seafox planned savings of 15 to 20 million are not valid neither their reduced daily opex rates.
I would hate to see a point reached where Seafox representatives are appointed to the BoD and then not be able to deliver on its savings promise OR A REDUCTION IN DAILY OPEX and then the BoD are carrying dead weight or worst still they are asked to be removed if they cant deliver! This is all yet to play out.
It is something hinted at in one of the GMS RNS.
My personal thoughts are (if there are savings/cost cutting about to take place) these unpopular decision are going to be identified already (as they have quoted the amount believed to be saved) and it would be better to appoint the Chairman after these have taken place.
The new Chairman will not be seen internally as the ex man cometh.
He will be seen as the man to build on and drive the company back to full utilisation and a state of sustained stable profit.
That is why I would not be in too much of a rush find a replacement.
As you know I dont want to rush and find a replacement for the chairman asap.
I am happier they find the right person.
But this is food for thought. It just shows you how the news that is out there adjusts the share buyers(sellers).
Even when a long term contract is awarded look at the price after the chairman stepped down......
https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/exchange-insight/news-analysis.html?fourWayKey=GB00BJVWTM27GBGBXSSMM
all on a downward trajectory.........you would expect positive news like long term contracts to have had beneficial effect.
good to know when going against the tide is the right thing to do. the tide changes every so often....have a good weekend.
well done ssb1.
just glad I didn't try anything with interserve over the last month or so.
it could all be frozen.
this has taken a hit on the price but mid to high 30's looks like a reasonable level.
I know gfd (quite rightly)pointed out not all the work was oil based, but the price slipped in line with oil companies.
32 was low before the drop. when all the turmoil is sorted (I believe) that is the sort of region it will head back to as a minimum as the oil companies are heading back there.
all blue day in anticipation........
Not bought traded REDD instead and banked profit there
16.55p hmm
I know.
It is difficult to see if there is someone or group trying to achieve a controlling interest
Take a company private.
In more often than not the private investors are left guessing what is going on. A group of Venture capitalist or Large fund managers investing can give a truer picture to the balance or stability behind the core price.
Its another day of low activity widening spreads. Slow selling mainly.
I wonder if seaforx will try and buy some shares at 18p? Will there be a deal at the meeting?
Perhaps they were just wanting enough leverage for a meeting and not a greater holding?
It is a pity there is no audio feed from the meeting.
I think they should inform GMS of their holding and GMS release the appropriate RNS.
As all other shareholders do so we dont have the ass-you-ass-me situation (I know you believe it to be the case having spoken to them) but it is (and has been) standard practice for large holders to inform the COMPANY AND IT RELEASE a rns on their holding alone at every whole percentage point.IT IS SUPPOSED TO BE LIKE THAT TO TAKE AWAY THE AMBIGUITY WE HAVE HERE. Has seafox stopped buying? is it selling? how much do they hold? This is not a GMS problem. This is a shareholder problem. They are supposed to inform as soon as reasonably practicable over 3% as far as I am aware. anyway my rant over. you see it happen sometimes.no one seems to do anything about it. people tell you they dont need to or whatever and believe it when there told and there is ambiguity. that's why that rule is there. I did find it once a while back for another situation but its pointless "trawling" through it again. thanks for pointing out other services use the equipment besides oil and it is nice to know the more diversified the work the more likely any sector problems will have less knock on effect.
Do you know of anyone attending the meeting on Monday?
the SP recovered after the oils price shocks into the mid 70's then in 50's the drop into the 30's was truly oil price fear; compare premier oil SP as timeline and you can see that clearly.
An SP in the 70's is not too far fetched if things are sorted and the oil price is around 80 for 3 to 6 months.
I dont think the stocks can be affected directly, however those who are nervous or are thinking of "jumping ship" or "getting on board" as news is in the pipeline can be effected. With the share vote (if we knew who owned what) that too can make a difference to the private investors thought process. The raw profitability is utilisation and day rates.That's oil price driven. That will have the big effect on this stock in time imho. One of the seafox proposed NEDs has close links to banking syndicates but there is little mention of their history on the seafox website.
I am assuming seafox has 13 odd% not the 25% in its original statement? As previously stated every RNS has driven the price down since the chair left (including new contracts!). New contracts was not publicised anywhere.
Its a lot of negative reporting earlier giving people the jitters.
By that comment dont think I believe they should rush in an new chairperson either.
we need to start this ship sailing and get this rocketing
is this the support you were looking for gfd?
The Company's banking facilities are primarily sourced from a syndicate of banks based in Abu Dhabi. The Board believes that it would be in the best interests of the Company to consider the addition of UAE non-executive director representation to the Board to support the Company's engagement with the local banking syndicate. The Company will actively engage with its shareholders, including in particular all its principal shareholders in the UAE/MENA region, to identify appropriate candidates for consideration.
Non-Executive Director
The Board is also pleased to announce that Mohammed Bississo will be appointed a Non-Executive Director of the Company with effect from March 2019.
Mr Bississo currently co-heads Kasamar Holdings, an Abu Dhabi-based family office that owns 9.82% of GMS through Castro Investments Ltd. He previously spent more than six years at one of the leading mid-market alternative investments firms, based in Abu Dhabi, UAE, as a member of the private equity group.
Mr Bississo has a BSc in Computer Science from the University of California Irvine, and an MBA from Duke University.
if you want a bit of focus.
every rns or statement released has sent the sp down since the chairman stepped down.
although the volume was low of the he 5 biggest trades 4 were buys......