GreenRoc Accelerates their World Class Project to Production as Early as 2028. Watch the full 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.
The market could well react positively to this move now . The markets hate uncertainty and we should see a continued positive reaction now this move is definitive, IMO.
Alas poor 100, we knew you...
Official announcement:
https://www.lseg.com/en/media-centre/press-releases/ftse-russell/2024/ftse-uk-index-series-june-review
I make it being about 15 places / 15% below keeping it's place in the end. Rebalance is not effective until 24 June though, still in the 100 until then.
Maybe not all doom, I saw some stats last year (don't have to hand) that indicated that companies being demoted often out performed those moving up in the few weeks/months after the event. Lot’s of day to day volatility still to come I think and we have still not had a follow through day, either up or down, since last Tuesday.
Taking the cash so they don't get burnt like they did on Darktrace
https://shorttracker.co.uk/manager/kintbury-capital-llp/
OCADO GROUP PLC 0.49% 4 Jun 2024
OCADO GROUP PLC 0.62% 29 May 2024
OCADO GROUP PLC 0.73% 23 May 2024
OCADO GROUP PLC 0.89% 30 Apr 2024
OCADO GROUP PLC 0.93% 24 Apr 2024
OCADO GROUP PLC 1.06% 21 Mar 2024
OCADO GROUP PLC 1.11% 8 Mar 2024
OCADO GROUP PLC Kintbury Capital LLP 0.49% -0.13% 4 Jun 2024
Seems to be popping again. More short covering? Looks like fun at the moment if you're long.
Welcome to the party @Pearls 👍🏻
FTSE tracker funds selling out, and Smaller FT250 funds buying in. Once this is done, we will be back on track to £4 ++
Interesting piece Daniel
This is way over sold and I’m buying accordingly
Who’s Peril 🤔
https://www.ft.com/content/e4d32fb6-4f42-41bc-adf1-9a10edec4928
Flying Robot
Https://youtu.be/tR0znm__efc?si=rMG3fLdzHHRaO8bP
Petrofac still down 85% so the shorters have still won on that one. Fight them at your peril !
Shorts still closing now at 6.84%
Https://shorttracker.co.uk/company/GB00B3MBS747/
Please do your own research as always and follow FCA guidelines.
Decided to add a few more at 356p - for me there is more upside than downside atm - lets see
gla dyor etc
NURSE!!! Bring the syringe. No, the other one, the bigger one.
Kitty, step away from the catnip ;o)
We needs it. Must have the precious. They stole it from us. Sneaky little shortsies, wicked, tricksy, false.
Proactive:
"The story cites hedgies Millennium Management, GLG and Gladstone Capital as among those caught out by recent bids for Hargreaves Lansdown, Darktrace and Keywords Studios all soared after attracting offers.
"Shorting any UK mid-cap is insane, literally insane," one hedge fund source told the paper, as valuations are "so low in the vast majority of cases that a $2bn UK company is peanuts for any mid-sized American company".
Defo
They’ve booked their delivery slots & are filling up the van with their purchases right now while the offer is on
There’s an Ocado just for them to 😁
... the weird fluctuations today are letting more of the shorts out at mates-rates??
Weak FY23 ORL Performance: ORL, which we deconsolidate in our projections, reported only a small profit in FY23, which was in line with its guidance. This was due to higher fees and support costs, despite growth in sales from more active customers and more average orders per week, maintained gross profit margin and efficiencies in fulfilment and delivery costs.
In our view, over 1 million active customers (1Q24) that have shopped at Ocado within the 12 weeks to 3 March 2024 support future growth in average orders per week from 407,000 at end-FY23. Ocado had excessive network capacity, which it adjusted by closing its oldest and least efficient Hatfield CFC during FY23, but ORL is still paying Ocado's Solutions business unit for this capacity.
Importance of Profitable Online Channel: Ocado's technology achieves efficiency and profitability in the online channel, which is critical to retailers. Despite the post-pandemic normalisation, the long-term trend is for the grocery online channel to expand. In turn, this should continue driving demand for Ocado's solutions. We believe ORL is a poster-child for what can be achieved with Ocado's technology in the eyes of its partners and investors. This underlines the importance of its profit recovery.
Also note the debt :
LIQUIDITY AND DEBT STRUCTURE
Adequate Cash to Fund Investments: The restricted group has an adequate, but reducing cash position comprising around GBP800 million cash and a fully undrawn GBP300 million RCF. We expect that this liquidity position will support its FY24-FY26 cash absorption from its high capex investment, and we estimate an available liquidity position of around GBP0.85 billion at end-FY24.
Approaching Debt Maturities: Ocado's mid-term liquidity profile is strongly dependent on its ability to timely address upcoming debt maturities with GBP600 million convertible notes due December 2025 followed by GBP500 million senior unsecured notes due October 2026 with external resources and not eroding its RCF and cash balances cushion. The RCF expires in June 2025 but has an option to extend by one year that will need to be exercised. Ocado has demonstrated strong access to financial markets via capital raises in the past, including GBP500 million senior unsecured notes in September 2021, following a GBP350 million convertible bond issue (due in January 2027) along with a GBP657 million new share placement in 2020.
Years later, which also leads to Ocado being paid full fees for its capacity and services later.
At end-FY23, Ocado's technology was employed at 14 international CFC by five customers, with an average of 3.14 modules in each, which have gradually gone live since FY20. Two new international CFCs opened in FY23. The slower than anticipated ramp up of partner CFCs has been due to lower demand and in some cases operational challenges. Ocado is helping its clients via its partner success programme and the results of these efforts are not fully in Ocado's control.
Projections Revised Downwards: We expect addition of on average three new CFCs per year over the next three years, which is less than our previous assumption. We now incorporate 17 instead of 22 live international CFCs by end FY24, then increasing to 23 CFCs by end of FY26. Kroger is the key partner with eight live CFCs, with no new CFCs added during FY23, and slower rollout than initially envisioned. Sobey's is another key partner with three live CFCs. Opening of CFCs for Coles has been delayed to FY24 from FY23.
This is leading to slower progression of EBITDA for Ocado, but is mitigated in cash flow terms by an average GBP390 million annual capex per year, which is lower than our previous forecast. Ocado also plans to grow its intelligent automation segment in a capex-light way. Despite the lower capex, we project an average GBP270 million annual negative free cash flow (FCF) over FY24-FY26.
Refinancing, Higher Cost of Capital: We expect weak EBITDA interest coverage metrics, at around 1.7x on average in FY24-FY26, as we expect Ocado to refinance its GBP600 million convertible bond with 0.875% coupon ahead of its maturity in December 2025, at a materially higher interest rate. The inability to refinance or refinancing at a materially higher rate than modelled would be negative for the rating.
Satisfactory Liquidity: Ocado has sufficient cash balances of around GBP0.8 billion to fund FY24 and FY25 capex, but cash will be eroded over the rating horizon. Cash will be supported by nearly GBP160 million cash inflows to be received from the Autostore settlement. We also assume that the revolving credit facility (RCF; GBP300 million), currently undrawn, remains available and is extended to support liquidity. We no longer assume any inflow from the M&S deferred consideration.
New Funding Needed in FY27: According to our rating case, Ocado may need to raise new funding in FY27 as its FCF is likely to still be negative after it has deployed its current cash balances. However, we understand that Ocado has further flexibility to lower its technology and support costs.
We also understand that Ocado's management does not intend to raise more debt beyond its refinancing needs and plans to fund growth capex from internally generated cash in mid-term. Current debt documentation has a debt incurrence covenant of a minimum 2.0x fixed charge coverage that does not apply to refinancing and
Good view of the fundamentals from 2 weeks ago, for any who want some background..
Fitch Downgrades Ocado to 'B-'; Outlook Stable
Tue 14 May, 2024 - 12:32 ET
Fitch Ratings - London - 14 May 2024: Fitch Ratings has downgraded Ocado Group PLC's Long-Term Issuer Default Rating (IDR) to 'B-' from 'B+'. The Outlook is Stable. Fitch has also downgraded Ocado's senior unsecured instrument rating to 'B-' from 'B+' with a Recovery Rating of 'RR4'.
The downgrade reflects our view of slower expected growth in profits due to the slower ramp up and rollout of international customer fulfilment centres (CFCs) than previously envisioned. This is combined with refinancing requirements in a higher interest rate environment during the financial year ending November 2024 (FY24).
Ocado's technology drives online grocery profitability, demand for which we expect to continue growing. However, we believe the execution risks for Ocado to reach scale and profitability remain high, due to slower than anticipated deployment of the company's infrastructure by its partners. Based on our estimates, Ocado will not need to raise additional resources to fund capex during FY24 to FY26, but its liquidity position is being eroded and it will need timely refinancing of upcoming debt maturities due in 2025 and 2026 to leave its cash balances available to fund the growth.
If debt is not refinanced 12-15 months ahead of maturities, with GBP600 million convertible debt due in December 2025, this is likely to negatively impact the rating.
The ratings reference Ocado Plc's restricted group only (as defined by its bond documentation), and exclude Ocado Retail Ltd (ORL, its joint venture with Marks and Spencer Group Plc; M&S).
KEY RATING DRIVERS
Slower Earnings Growth: Fitch expects slower growth in profits due to slower ramp up under existing CFCs and the opening of fewer new CFCs during FY24-FY26. We forecast EBITDA (post rents) to trend from around GBP60 million in FY24 to GBP175 million by FY26 (FY23: GBP14 million, based on our estimates). This is around GBP20 million below our previous forecasts for each year. We view the execution risk associated with ramp-up of existing CFCs, rollout of new CFCs and delivery of efficiencies to drive earnings growth as high.
We believe the business should generate adequate profit margins once it reaches scale, with EBITDA margins improving towards 16% by FY27. Our forecast incorporates improving direct operating costs, and reduction of technology and support costs. Ocado has stated it targets reducing its annual cash technology costs in the medium term to GBP240 million (from GBP292 million in FY23) and its cash support costs to GBP150 million (GBP191 million in FY23).
Slower Ramp-up of International CFCs: Our previous forecast assumed that an average international CFC goes live with two or three modules, and upon growing utilisation, Ocado's clients order further modules to achieve assumed average full capacity of five
More like Pssst as the bubble deflates..