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Good points MB10 and I think we are in broad agreement. Regarding the salary, I accept your conclusion but I’m sure DC would attract more investors if it were more aligned with the size/ cash flow of the business. Trust debt levels can be managed effectively.
As DC mentioned in the interview he gave today, only the business results will materially drive the share price.
MB10 - Always value your posts here. And I take your point about DC's commitment to and vision for the business. I also like some of the recent news with Riverfort gone and Close Brothers in. And despite the uncertain short term outlook, the underlying global demand and longer term margins look good. If this business gets to cash flow positive, it should become very profitable and the share price will reflect this.
But as DC said in a frank and assertive TW interview back in May, 2020 "is about survival". Not just for LVCG of course, but for many businesses. But in a half year where revenues were £968k, and the operating loss was £1,362k, paying DC £248k is, in my view, reckless. I heard DC highlighting that directors had taken 50% pay cuts as lockdown started, yet his pay for the quarter went up. With debts due within one year at £1,536k, I think cash conservation needs to start at the top.
In a previous post, you rightly pointed out that DC's remuneration last year was boosted by a deal commission, so why has it now gone up? I just don't understand this. Despite DC's commitment, endeavour and high shareholding, it feels like taking a £248k half year salary and then lending money back to the company at a high coupon (£72k on £500k is 14.4!) is only going to erode confidence.
I notice DC said he was "cautiously optimistic" in the RNS yesterday having perhaps sounded a little more bullish in the investor webinar a few weeks ago. I can see reason for his cautious optimism - I think many areas in which LVCG operates will escape the worst restrictions of Covid and today's news reinforces the appeal of the LVCG offer in the market. It is encouraging that the build program continues. There is a potentially very strong story here . But as DC says, the short term is about survival.
You need to get over DC's fees and payments and so on, there are non revenue generating companies on AIM in which CEO's take huge salaries, far higher than what DC takes out! He puts his money where his mouth is on lots of occasions, largest shareholder by a company mile and is constantly adding to his holding when and where he can to maintain his percentage. Again, many AIM CEO's draining companies and don't even hold many shares, if any at all. Without him facilitating loans and deferring payments in lieu of shares etc LVCG would have really struggled during CV19.
I have been following this in the wings - MB10's posts in particular are very informative and I have been tempted to dabble but I hadn't really appreciated how much the Chairman milks the business until having a look at the interims, it doesn't seem sustainable even with all the other cost cuts, he makes up 16% of cost...!
His salary has increased 13% from last year (despite everything going on) to £248k for 6 months - completely unsustainable given size of revenue even taking part in equity during Covid
£72k interest and fees on his £500k loan after only 5 months
He's also charging an interest cost on his CBILS guarantee despite no capital outflow from him - no wonder he says he was pleased to provide it in his statement!
He trys to spin the recapitalisation of £200k of his loan to equity as "his continued support" - classic spin / red-flag, wouldn't be suprised if Close lending was conditional on this recap / equity cushion
Happy for someone to counter the above but staying firmly in the wings for now
**** drop quickly bought up.
Small top up for me.
Only 50k shares left at 8.99 now.
I'm not invested here, but will be shortly, this appears to be a cracking entry point.
Nothing new in today's news.
We knew financials would be dire because they told us in previous podcasts and webinars.
The reason? Shock horror, Covid.
A start up business that couldn't meet demand because its proven model had the rug pulled from underneath it by a global pandemic.
Add in Riverfort and another seller and we have been lucky to survive.
But we have survived.
Contracts are still in place and demand is still strong for the product.
Our finance partners Close Brothers handle the UK CBILS.
A scheme that the Government has just announced its extending which contradicts the claim by the new troll.
Of course a second wave will be challenging but we are in a better position than 5 months ago.
Can't quite get my head around people that revel in a pandemic that threatens a business and their shareholders value.
All comes down to their moral compass I suppose. Some people are born t#ats.
Except they are generating revenue you fecktard!
''As of 21 September 2020, the Group had £157,000 of available cash''
well that ain't gonna last long especially with government backed furlough payments ending soon :-)
I reckon our resident architectural lego enthusiasts would be better off spending their cash buying their very own bricks and kits instead of wasting it on more cheap as chips shares as they won't be able to visit any of those clap happy and deferred exhibitions anytime soon and a balance sheet never lies