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Further thoughts about finance - at the risk of becoming a bore. Asset finance was being considered according to the results. Not to sure how that works but we will need some sort of finance. If a reactor can generate a Mill per year at full chat then at say 75/80% capacity it would take 4 years to generate around 3.5 mill. At a margin of say 50% this would be a return of 1.75 Mill.
The operating costs are unknown to me but I reckon that full payback on a reactor is around 4 years. As they have few moving parts apart from the vacuum pumps the maintenance costs are minimal and they last for many years, we're still running the original large reactors 7/8 years down the line.
On that basis the long term profitability is assured, it's just getting productivity up to what is hopefully an increasing level to satisfy a growing demand. We will definitely need some sort of cash injection. Exiting days ahead.
Hi Team83. Yes the new facilities will remove any physical bottlenecks incurred at the current site but with only 2 current production reactors I'm not to certain how much revenue this will gain us.
The cost of new reactors is crucial. If we can't fund them then it matters not a jot how many wing pads airbus want or how many turbine blades EDF want. We need to spent money to increase production. We are certainly at an important point in our growth and which comes first - the futuristic chicken or the short term egg.
gi curtt
TT reading the comments about the new facility in Bicester I would expect to see some improvement in productivity which may well help increase the revenue per reactor number - it appears that bottlenecks occur around the current factory and are not just linked to the constraints in the reactors themselves - this may help us increase revenues and fund the new pipeline of reactors we will hopefully need!
All good news again but still frustratingly slow progress and i think we will have to wait for the relocation to reach any inflection point but am here for the long term! ;o))
Hi Richie, At a Q & A session at a presentation some 12 months ago Kirkham stated that each reactor could generate around £1 Mill in revenue. He also stated that the 3 Bicester reactors only operated at some 75% capacity to allow for R & D and testing. This totals some 5 and a bit production capacity.
If that is so then we're pretty much at maximum revenue until the new reactors are commissioned which is why I was pleased that the 1st one is now going stateside around April/May time as a couple of months ago Martinsville was at maximum capacity. There is some credence in those statements as 60% of our revenue comes from there with 60% of capacity also there. I dare say that we can squeeze a bit more from the current situation but not that much.
I've said before that, for me, a continual rolling build programme of reactors will be needed to be in place to attain real growth but as the cost is upwards of a £1 Mill apiece, which includes pre-treatment facilities, funding will be a major issue and the 12 month lead time is also against us.
However with new premises to come and aerospace now generating initial revenue plus the turbine blade business to come in say 18 months time we have never been in a better situation. Onwards and upwards!
All heading in the right direction with a strong start to the financial year. Reference to asset finance important as fed up raising capital at a low share price. Lots of inferences to new customer conversions especially aerospace. Really need to see management deliver these customers and double digit revenue growth or they will start to lose all credibility given the superlatives they have been using around growth and reaching an inflection point. With £5m of revenue and parts approved for flying in aerospace surely the pace of customer conversions has to speed up?
Plenty of positive info and a lot going on on several fronts. Noted that the 1st new reactor will now go to Martinsville instead of assisting the Bicester move. This has to be good for production figures. As we have an MC of 6 times revenue I'm not expecting any major lift until we get better figures. As ever a bit of patience needed but I'm pleased with the all round progress.