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Hi McDoule,
I live on the c2c line so travelling to London is not a problem for me.
I have also attended an AGM in Banbury which was well attended and was held within their grounds in a marquee. Therefore I couldn’t understand, given the Covid situation and social distance requirements, why a room in a high rise building in London was their first choice for the AGM.
Wasn't Malcolm querying why London and not Banbury at the AGM; if so, he, or you if the same Malcolm, didn't sound impressed by having to come to London. I also got the impression PF was tiring of Malcolm's/your questioning!
"Malcolm - did not like to travel to London".
What are you on about I was there!
Their fixed costs and admin is about that level so it’s why they are so geared at this level. Increased revs drops straight to the bottom line. Nice position to be in. 2022 is predicted to have £23mill revs and £5.3mill PBT
Panda, for the year 2019, pre covid, it was the same, being £6.4m on turnover of £10.9
This was probably because lower margin tech contracts accounted for a higher proportion of revenue due to Covid.
The managed services contracts are higher margin contracts 50% +. This was mentioned at the AGM today
I think we will have to wait and see if it is their intention to spread the cost over the life expectancy/duration of equipment/term of contract.
Looking at last year's income statement, cost of sales was 60% of income, £6m on £9.9m of turnover, which seems a lot unless a high level of expenses are attributed to the year incurred.
Yes but my point is that a lot of those set up costs will be capitalised and amortised over the life of the asset/project, not expensed immediately.
Gibbo, I have recommended your post as I am completely with you on your last paragraph.
Gibbo, I was not stating a fact; it was a comment of my expectations.
PF did repeat what he said in the RNS that these two projects required various initial preparation costs, he stated at the AGM that funds would come from the revenue stream of these two projects, so my "expectation" is that these expenses would result in little profit, but only "initially". Although I know there will be ongoing costs, maintenance and upgrading, throughout the term of the contract, I see no reason why these two contracts will not be highly profitable, bearing in mind the comment about increase traffic going on the bottom line.
McDoule - think you have "DRC and Liberia - revenues from these two to fund expenses, so do not expect much profit initially, but less likely to see additional funding to support these two contracts." wrong.
He was taking about capex which will be depreciated over the life of the assets. Arden is forecasting around £5.2m net income next year.
Pre-covid DRC embarking passengers were 1.1m pa. 20 year contract with no break clause and an option to extend 5 years. Contract worth circa $500m over its life. The market has way under-estimated the value of this deal.
So, my take is to expect:-
Prospects - very good. Potential investors should start monitoring the company and get ready to pounce, otherwise you will be kicking yourself.
3rd large contract this year.
Saudi Arabia - to come on board, but any contracts not until next year.
Future Funding - maybe some more dilution but more shareholder friendly avenues likely to be the way forward.
DRC and Liberia - revenues from these two to fund expenses, so do not expect much profit initially, but less likely to see additional funding to support these two contracts.
For those not able to let Iran go - live and hope as has been the case for a while, so no change and not banking on it either.
Director Dealing - not convinced any meaningful action short or long term or via monthly drip feeding, but hop to be wrong.
Malcolm - did not like to travel to London.
Share Price - based on AGM, very little initial reaction.
Time for lunch.