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Seller gone? Libya news coming? Looking strong on level 2, rarely have I seen such depth on the buy side!
again and I am being joined by Baroness Kingsmill, she can make the sandwiches.
Red flags make APR Energy a sell: APR Energy, the temporary power company, spooked investors by warning of rising costs and a boardroom reshuffle that combined sent shares almost 8% lower. Questor thinks the latest round of boardroom changes should be a red flag to any investor. Laurence Anderson, Chief Executive, told Questor that increased costs of operating in Libya and Iraq would reduce results this year. He expects earnings before, interest, tax, depreciation and amortisation to be up to 5% lower, or about $16 million, off the full year target of about $321 million (£194 million). The warning on earnings came alongside more action in the APR boardroom. Only two months ago, Andrew Martinez the Chief Financial Officer, announced his resignation on June 5. Now Mike Fairey, the Non-Executive Chairman is making for the exit and John Campion, the Co-Founder and Chief Executive, will step up to Executive Chairman. Laurence Anderson, the Co-Founder and President of APR, will become Chief Executive. The typical customer is a country where growth has outstripped the power grid or a natural disaster has destroyed capacity. APR has units in Indonesia and Senegal, and recently signed its biggest contract to supply war-ravaged Libya with electricity. The results in the first half were in line with guidance given last month. APR said revenue was up 192% to $254.2 million, giving pretax profits of $54.3 million during the six months ended June. The fleet size of generators increased by 37%, to 2,194 megawatts from a year earlier. The shares may look like they offer value, trading on about 8.7 times earnings and backed by assets, but Questor thinks this is a value trap. Those assets are worth a lot less if they are not on hire, as was the case with about 30% of the fleet at the end of June. We still don’t think there is value here. APR Energy at 505½p-41½p Questor Says ‘Sell’.
Surprised not more of a bounceback after these: Q2 revenue of US$134m, up 203% v Q2 2013 fleet expansion of 37% High utilisation Cash pile still OK pipeline remains strong, focused on securing a number of longer-term, larger-scale power projects in the Americas, Africa and Asia Pacific. leverage ratio comfortably within financial covenants MCAP well below NAV and price well below broker targets (apart from the Liberum cut issued before the interims). Am I the only one mystified?
Seems iis can't make minds up. Last RNS's: UBS went over 5% then sold some of that whilst Alliance Bernstein gave up all of their 5%. And now today before the start, seems about £33m / 6.2% reported sells, whilst after close c.£3m shown as buys. I wonder if it's related to re-financing referred to in interims...which seemed pretty upbeat overall. Will have another look. "The Group’s refinancing strategy is well advanced, with active discussions ongoing with its existing relationship banks. The Group expects to execute this financing during the third quarter."
Having been a holder I though I would revisit to see what been going on and to try and identify why this has fallen so much. From memory things were looking good, deals with GE orders up on the year etc but relying on a couple of big contracts including Libya. Lumpy contracts and lack of news made the SP jumpy. The Japan contract was ended but any info on the current situation from holders would be useful. It is just a case of the SP falling without real substance and on the Libyan situation and or lack of news
My head will join you in the sand Nezlob. I bought a few more at 460, it seemed v. cheap at the time. Shorters increased their position earlier in the month so maybe it was just a snowball, time will tell. As we are so close to NAV can't be too much more damage to be done.
CFO leaving announcement said he's staying on until September until after H1 results delivered 27 Aug. Doesn't sound like someone leaving under a cloud, dodging disaster or not coping. On the other hand he does have roles with other companies too, so "pursuing other interests" also sounds natural. So am hoping it's just the combined effect of the selling out factor (though UBS has recently upped their stake) and typical 2014 AIM yo-yoing on sentiment at the least thing (or should I say plummetting). Not that political unrest is a small thing, but translated to economic impact on APR, am struggling to see the price impact as a true reflection of that, but more likely increasing domino effect of stop losses and sentiment. But admittedly hoping hasn't done much for my holdings in this one so far. Just trying to make sense of it.
Surely they would have to announce anything they knew? I have emailed the company, personally I would be disappointed if they didnt rns something tomorrow either way and hope it is capital selling out the last and am ready to buy on the turn.
Many moons ago like 25yrs back ! Aggreko went to their NAV at about £1 , I ever bought in what a mistake that was. So am about to take the plunge once I have established the APR plant utilisation figure.
I have buried my head in the Libyan sand and bought another few more.
are proving as accurate with their 650 shot in the dark as was their 1350, unfortunately.
So is this all down to Libya, or is there more to it. CFO left a month back. Was it because he had cocked up, or he saw disaster coming, or the others blamed him for impending disaster, or felt he couldn't handle it, or none of the above. NAV is a good point assuming it can be realised and there is nothing lurking behind CFO departure! But wow, it just keeps tumbling away losing me some seriuos (to me at least) money..
An SP of 440 is the net asset value of the company. If the Libyan asset were damaged/destroyed they shouldn't loose the value of those assets, only may be the contract. That would be bad but not catastrophic, it would still be a profitable company thrown in for free.
Hi Nezi, IPP contracts are secured by the end user providing a letter of credit, sovereign guarantee or bond to the value of the equipment plus mobilisation costs and the revenue of the rental period. The guarantees are reduced as the contract is executed.. You should not APR unlike Aggreko deals in major contracts only they do not have sets for small on site rentals. The business needs a lot of fianance for the capital purchases, also I not in addition to diesels the are using large gas/diesel fuelled turbines which are not very efficient. APR are head to head with Aggreko so margins will be squeezed, MIDDLE EAST and AFRICA are key markets with ME in turmoil things look tough., Trust this helps
I was kind of being a bit flippant about how their price guide can vary so much in a such short period of time. Thanks though for the response Bobee. I guess the situation in Libya is playing its part in current fall, I looked up where their powerplants are and although they may not be right where the airport is and away from Benghazi they must be at risk. I guess also there must be some risk of payment defaults. APR must have considered some protection against these eventualities. How do you think that will fare (is that the right fare?) if things get worse, or something directly hits them. I'd be interested if anyone has some ideas as it could be worth me chancing averaging down, if some other shares I own come good and I sell to finance. I am well out on these right now!
Could be the Lybia project is seen as been under threat due to new unrest. It is the biggest deal on their books.
Downgrade from 1350 on 16/5 to new figure of 650. What made them do that?
One more to add to my collection. In at 575 FLA
Hang on in there mate, APR are backed by some big US investors like Madaline Albright the former Secretary of State . GE will also help the cause by using them in change outs and break downs.
£4.125m, ah, yes would have to be. Just accepted "blue" at face value, silly me. Thanks for additional comments. V reassuring. Have been buying in on the basis APR must have good growth opportunities in Aggrekko's space, but floundering price making me start to doubt. Happier with travel so far today though!
If you look again you will see that one of the £4.125m is a sell. However APR have taken some very good contracts the only worry for me was the one in Lybia where the rival factions are also selling the countries oil and reducing government reveniew, APR confirmed payments are upto date so with 80% + utilisation of the fleet they look to be in a sound position. A friend of mine was in a negotiation with the MD and he was very professional winning the contract in face of competition from Agrekko . The brokers have it right the only way is up wth a large step up !!!
£10.8m total big buys showing HL in last 24 hours: today 10:20 £1.8m Thurs 16:30 £4.125m Thurs 16:28 £4.125m Thurs 13:04 £0.336m Thurs 12:44 £0.422m Price still depressed. No comment on bulletin boards. What's going on?
This will be bought up by energy companies if there is a bad winter