Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Volatile/falling prices yes... not stable low prices is what I meant.... low wholesale prices in general is good for Yu
If wholesale prices fall - margin call increase as it's the difference in price paid against market price. so it's worse. When wholesale prices fall the sales price falls. This is a long game and large sums of cash are needed, think that YU is worth more than the current price due to its customers, systems, licences etc. So a good time to get in but will be sold for under £3/share
Don't agree momeyspider with Yu running out of cash and having to sell. They're adding cash in the bank all the time and wholesale prices are still relatively low and looking to stay low or go lower even. There is a good article on the Guardian today about renewables in the UK. Forecast oil and gas prices remain low into 2020 and 2021 according to the IEA. So long as volatility remains low, the low prices are good for Yu and reduce margin calls like the £3.2m they paid recently to their trading partners. If BK had to sell, he'd be kicking himself at the long term potential in the UK energy market for SMEs
I have been trying to tell everyone for a long-time now that profits in this business were way off in the distance. The issued forecasts seem to bear that out, with all the losses in the business cash will get tight. No chance of a fund raise in the future, so I too believe that they will have no choice but to sell the business. It will go for sub £3 in my view. But plenty of upside from this price.
This reminds me of Footasylum. I have a worry that someone will buy this out for low offer of £2 at these silly prices.
Hence sp is 82p and not £10+
Yep. Nothing is certain with any company. Plenty of time to track progress from now to 2021. And plenty of macro and micro stories to impact Yu in the meantime. Positive and negative
Sorry, you say profits in 2021. Hopefully, yes! But that's a long wait, and still carries uncertainty.
Quote from the half year figures you refer to - "The EBITDA loss to 30 June 2019 was £2.7m, being a material reduction on the £5.3m EBITDA loss in H2 2018. The Board anticipates incremental improvement with EBITDA loss in H2 2019 expected to be significantly lower and continued progression in FY 2020 as the historic contract book continues to expire."
In plain English, this means an EBITDA loss in 2019 (full year) and a smaller loss in 2020 (continued progression). Official market forecasts have been guided to the market by the company.
"While these initiatives will take time to deliver an acceleration in growth, the Board is confident in the long-term outlook for the Group." The phrase is take time. The company does not say any where that profits are expected in 2020. Read it all through again, very, very carefully.
SNN
From tecent RNS from Yu for H1 2019.... Adjusted EBITDA loss of £2.7m, an improvement of £2.6m on H2 2018 loss of £5.3m (H1 2018: £1.0m loss following restatement)
Otherwise, overall profits are expected in 2021 itself.
I have picked up profit forecasts from Halifax Share-dealing website - 2019 a loss of £5m and negative eps of 30p and for 2020 it is a loss of £1.2m and negative eps of 7p. Profit is not expected until 2021, the results for which will come in 2022. That's a long time to wait for a typical private investor. My guess is that the PIs are slowly selling and reinvesting funds elsewhere. This is causing a slow decline in SP, which inevitably, eventually, emotionally triggers other PIs to sell - a self fulfilling prophecy.
The company has guided that 2019 revenue will be about £105m and that 2020 Revenue will be flat - "The Group expects revenue of approximately £105m for the full year to 31 December 2019 … Revenues in FY 2020 are anticipated to be broadly flat due to the Board taking time to reset certain sales processes". Though 2020 will be a better gross margin, overheads will be higher (mainly sales dept.), hence, another loss for 2020, though should be lower than 2019.
Cash levels are bound to fall in line with losses, however, the company has more than enough cash to see it through the next two years into profitability. The customer retention rate is going to take a hammering as low / loss making contract customers are unlikely to renew on the new much higher prices. The company has forewarned on this - "Retention levels in the near term will be impacted as the Group actively manages out legacy low margin contracts as they wash through the book." This will all show in the next set of accounts - is it in the share price yet? I don't think it is, but people are slowly working it out and (perhaps) selling out.
It is far, far too early for me to buy into this stock at the moment. Assurance is need that the company has tuned around and is able to cut a profit. I will look again in 6 and 12 months time. The share price may be lower or higher. That is irrelevant. What matters is preservation of invested capital and a greater certainty over that preservation.
One to leave on the watch list.
SNN