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It appears to me that the recent dilution can only be blamed on the FD and the company"s financial advisors. Sounds as if the auditors refused to certify the accounts unless the company raised more money.
It has been obvious for a long time that the company needs more financial leeway.
Hardide has a great platform, technology, customers (Airbus, Schlumberger, ExxonMobil, Graco, Halliburton, General Electric) well invested furnaces and delivery capability. I lost trust and confidence in the previous Chairman. Too much hubris, lack of honesty and waffle. I hope the new Chairman can refresh the board, management culture and drive the commercial revenues. Broadly speaking increasingly revenues from £5.5m to £6.5m ensures group is cashflow break even and £7.5m we are in profit with some resilience for customer destocking. An additional £2m of revenue within 18 months and Hardide will be generate a 5 to 10x return from current prices. Flipside is anaemic customer growth, more destocking, emergency equity and massive dilution.
EV here is now around £3m. Yes £3m. Small wonder there has barely been a sell since the placing last week. You’d have to be rather desperate to sell at these going bust prices.
I’m not going to set out the entire investment case, from my standpoint, in this post. But it’s convinced me to stick around and probably add more to average down.
The fact is this company possesses unique and, yes, disruptive technology. Yes I can hear all the counter arguments… never made a profit, poor management, lack of commercial focus, purely R&D Co., snails pace progress. All of those things are true to some extent. But the past is what it is, the Past.
What we have now is a company that is in rather a good place re their technology. It’s unique. It has a very large moat now. No one else can do what they can do. They have no direct competitors who can compete with them on a level playing field with their technology.
It just needs a management team that can unlock the value and potential.
I saw several promising snippets in the recent results that might have gone unnoticed.
I’ll share them in future posts.
One thing I do know is this company is def worth substantially more than £3m. Absolutely absurd when you look at the garbage out there on AIM that’s valued at multiples of that price.
No matter what your view of Hardides progress this is NOT a bucket shop stock with bucket shop placings though the recent placing resembled one with a scandalous 21% discount to the SP. Disgusting IMHO. However, that said, investors in the placing are not, imo, going to be able to shift their shares even if they wanted to. The reason? This stock is extremely illiquid. They simply wouldn’t be able to offload on the market unless they could negotiate an off market bulk sale. And why would you when you have taken the shares at a going bust price?
No I don’t see overhang as an issue here. The issue is the fundamentals. Can they get the sales to drive the revenue back up? I don’t see a lot of scope for further downside here. It’s now a classic recovery play at this price.
17m placing shares
how many sticky? 6m?
we've seen best part of 1m already snapped up in the (secondary) market
i'm edging around to a buy...but feel pretty confident the overhang will limit sp rise
John Peter Lobbenberg - an 84 year old former Chartered Accountant (not normally the kind of profile that take huge risks!)
Also previously ran a Portfolio Management group.
This company is currently priced to go bust. I’m roughly 50% down with an average of 9.75p
But tempted to average down because they will either get taken out or recover, or both.
20-30% discount to placement price
I'm not so confident in this case: the play is decent; the possibility of a bid lurks; and they didn't issue that many new shares
tp 4p
This company has been run in a criminally incompetent manner for years. It's little more than a lifestyle play for a few people at the top. It has NEVER been self sustaining and keeps coming back for more funding to maintain the lifestyle support. This should never have been allowed to float.
Given the placing that is going on and the current share price is there a danger that this company is now "ripe for picking"? With the price so low and given the unique technology that HDD has does this leave the company open to a takeover. Danger in my mind is that someone could pick this up so cheaply and leave existing shareholders well out of pocket. I still believe in what HDD do and want to see us all share in their success but the way they are currently running the business surely raises a lot of issues/questions. Hopefully we can all weather this storm but I really think the company is so undervalued it really is looking like a steal!! Continued good fortune to one and all. Rgds, S
Late in the day placing announced and closed by 6pm bookbuild @ 4.5p
Maybe it will fall to 4p neil777
130 000 fees for it????
It is very simple. Mr Chairman please do whatever you think is required to refresh the Board and Management. As shareholders we are tired of endless disappointment. 30% dilution and 16% placing costs is disgusting but reflects poor performance over many years. Please just fill up the furnaces, turnaround the operational performance and failing of previous Chairman.
This thread didn't age well
A placing at 4p all to raise 800k.. disgusting and AIM is lethal
New low of 5p today -8.7% but 10% spread .
AIM mugs pis.
Interesting to see appetite to mop up that sale
Any compelling reason to buy given what they're sayin??
Unfortunately found some in ISA
Not worth much must of be there before 2019.
05 Mar 2019 Consolidation
Now 7.75p
Down 20% today with 6.7% spread , everyday it seems one of my AIM shares tanking .
Since the last look 5th October 2022 a steady decline to today , little bounce up back to 15.5p 5th October 2023.
In hindsight should of taken a loss and got out .
Indeed , I too wonder at the low sales ....
I suppose the Covid years stunted any growth in aerospace and didn't do much for their traditional markets either but you would have thought they would be coming thru now ?
Anyway , I think i'll just average down some more and keep my fingers crossed . I also think with any decent pick up in sales it will get taken out.
GLA
It's taken Hardide ages to get aerospace approval for coatings in the airborne machinery. That gives it a big moat. Patience does wear a bit thin after all these years but I do think Hardide is on the cusp of greater things....fingers crossed.
Today feels like a good day to respond to Richie’s post from November.
The company has been around for 20 years now and we know Hardide works as advertised but the growth just isn’t happening. What is it about this product that isn’t solving a problem? I can see that for companies with a business model that revolves around maintenance (Rolls Royce for example) a coating that extends the life of components presents you with a new problem. But it just seems incredible that the market for a product such as this only amounts to £5million worth of orders.
I wasn't expecting a fundraising, the 50k and 100k sells recently were a clue I suppose although I stupidly ignored them and bought a few this week .
I agree, if demand is high enough they would be able to price at a level that would provide funding for expansion.
SCE is another company I hold that has striking similarities to HDD in that they are a British engineering company entering a safety critical market with a superior product, a recent surge in demand saw the SP at 70p+ but scale up has been problematical with them requiring additional fundraising on top of money already raised that was supposed to see them through to self funding, this has resulted in the SP falling to a 5 year low of 9.5p. If Hardide were to see a dramatic increase in demand then I would tend to agree with Dibs that a buyout may be the best option. In this situation the barriers to entry would be very relevant.
I respectfully disagree. The problem is not building capacity to cope with demand; the problem is lack of demand. Hardide is at broadly the same revenue position as it was 4 years ago pre-Covid (£3m revenue for half year) only the balance sheet strength (£4m cash) and market cap (£20m) have evaporated!