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Maybe looking for shares for orders ?
Reading the other board, it sounds like Wan (long term holder) went to the AGM. He posted a few juicy bits, April sounded like it went very well.
Agree with most on here; reading between the lines I think they are ahead of where they wanted to be, but given recent history they don't want to upgrade yet. They should have good visibility of Q2 now given we're halfway through May ie H1 is in the bag. Beta-hydroxy sales strong which I think is high margin so good news also.
I think the news on cash tax refund and that they've been getting cash out of Russian subsidiary is positive also, and probably unexpected. Hopefully means they'll beat on all three of revenue, profit and cash which market will love. And potentially means we could see divis return sooner rather than later...
Getting the new fermentation capacity utilised the remaining hurdle for the company, probably a story for 2025 numbers rather than this year, although some positive noises on this at interims would be welcome.
Think this is suitably encouraging, PoC driving headline sales growth. Fermentation validating more product lines for high end Pharma customers, which should underpin further solid growth into year-end and beyond. Return to decent positive cashflow generation, so we could well see a return of the dividend by EOY (for payment next), well let's see.
Net net, it looks like they're back on track and with a much tighter managed business model.
Dare we think the lows are now well and truly behind us?
Its funny that they had to title the RNS as positive update. But I guess its a novelty here.
Sales for fermentation services in Q1 2024 are up 156% year-on-year - not very helpful without the baseline number, since they were starting from 0 last year. However I think the overall strategy is working, and I wouldn't be surprised if they beat earnings this year. Chart looking ok.
Ok so its billed as an inline update, but reassuring enough for someone to be block buying 50k trades not to push the SP up too fast. Will be a shortage of shares soon. I think most have taken their position on this. Certainly `Mills has.
Hey presto here is the update!
Has been very quiet here for a while unsurprisingly, as there has been little news. Quietly topped up on the dips, but people piling in today which is hopefully a better sign, although maybe still range bound. Would need 34p to be considered a real break out I suspect. That requires an update
In meeting today, the opening shot from Baines was rather a panicked plea that his plan was all about focus and growth. I do wonder whether perhaps his pitch to institutional investors did not go completely smoothly.
They may have supported a dividend break, but I cannot believe they are happy with his snails pace execution.
It will be interesting to see what happens in the next couple of days and whether there are signs of IIs backing this as a recovery share.
I just have a nervousness about their operational capability as it becomes clearer that that there were more issues than we realised in the ongoing business as well as the updated fermentation business. And for sure timescales to get this up and running and selling the capacity have been vastly underestimated.
We could really do with quarterly updates this year.
Re: corporate governance. It was exactly this, james188, which caused one of Ashworth-Lord's funds to sell out of EKF a few months ago. They cited corporate governance issues and 'something of a revolving door' at management level.
Re: divi suspension. It's now clear that they intend to use the cash saved to build up a kitty to fund future sexy investments & acquisitions. After their previous wasteful splurge, which has precisely gotten us into this mess, that is v worrying.
I don't know what to do here. Nothing hasty. Give it a few days/weeks for the penny to fully drop... but when management are such poor allocators of capital and they don't know it, it's a good reason for selling out.
This may be the most frustrating company that I have ever invested in. The core business looks decent, but there have been multiple management missteps/knee-jerk strategy changes over the last few years which have damaged the company hugely. Add to that the complete lack of stability at board level and sub-optimal corporate governance. Only one year ago, Mike Salter was stated to be a key part of management (having been sacked as CEO for good reason) and the company did not even bother to issue an RNS when he left, using the excuse that he had announced first on LinkedIn. Not nearly good enough.
The IMC presentation this afternoon as upbeat, but the credibility of management is on the line and we need to see results, rather than empty promises (of which there have been far too many). Shareholders are now being asked to back management to deliver growth and to accept a dividend pause. It had better deliver. I asked the final question on IMC as to whether the board had discussed strengthening the board by splitting the chair and CEO roles. I believe that it should. The response that this issue had not even come up in recent discussions really concerned me. As things stand, the company is uninvestable for me. I have reduced my exposure at a painful loss, but still hold. That is under review.
Disappointing...that's an understatement. Todays lacklustre, late issue RNS is completely symptomatic of why the shares have tanked to their lowest level in years. The life sciences business is meant to be an exciting, dynamic and innovative space where companies develop new products alongside market and end consumer demand with a skilled management team driving shareholder value and navigating the companies place in the bio-tech sector. EKF appears to be limping in completely the opposite direction of where it needs to be in just about every category where I would measure success, pushing out growth into another meaningless time period where it now looks there is yet another failed investment - if this is what the business is aspiring to, they really should just put the business up far sale. SB
Results ‘as expected.’ Market hates a dividend cut. Business streamlined and new facilities in Cardiff. Missed the meeting but will watch replay. Looks ok to me, was not expecting miracles. Looking forward looks pretty exciting . Will another US company pounce on this derisory price . I know I have. Gl
I agree with comments so far that results are disappointing and I had also seen this coming given the previous briefings.
The only positive spin I can put on this is that Baines is being ultra conservative and has instructed his CFO to build a reserve that can be released at a time of their choosing.
I think Baines took a blow to his ego due to the company's poor management and the insistence by major shareholders that he should assume an exec role to restore the company to health.
That would explain the ultra cautious forecasts, as his reputation is on the line.
Let's hope that behind the scenes things are better than they appear.
Thanks SB. I didn't appreciate the divi suspension was likely. Damn... not even being paid to wait... like holding a biotech then...?
I shall tune into the presentation this afternoon as suggested by Dartron. Presume man-of-the-moment Baines will be there to trot out the excuses. Hope people ask him about cash (levels and flow).
Can't say I was expecting much and the company didn't disappoint - market clearly know hence the share price performance of late. Fed up with the ongoing pre-covid stories - its 2024 and yet they are still harking on with 2019 comparisons to compare growth - none of which are particularly impressive anyway. Life sciences in decline - with limited income from a significant investment which has blown all cash to the point they have to cancel the dividend - although I think we saw this coming with Baines back at the helm. Even POC growth is grinding to a halt. Overheads reduced - but still way too high. Wonder what share options packages will be forthcoming at these depressed valuation levels. Painful yet again....and the thought there is any consideration for acquisitions sends a shiver....SB
Investor meet later.. lets watch that and see.
I'm struggling to get excited with these. I'm particularly disappointed with the divi suspension as I thought EKF was, above all else, a cash-generative business... at least that's what Mills & Co habitually emphasise. I'd imagined the dividend savings would be used to repair the balance sheet, but they say it's being done to "enhance shareholder value mainly through growth". What does that mean? It suggests to me the building up of a kitty to fund future acquisitions. I hope not.
Cheer me up. What am I missing?
Results look ok, some sensible measures in there, like pausing the dividend and discontinuing low margin products. They have a US tax rebate due this year of $2.7m USD.
Now they need to make further progress this year and get back to strength.
Completely unacceptable that the results were not out before the markrets opened.
Results due out today, but no sign yet.
Investor presentation at 3:00
If RENX was to go into administration - it would be a pre-pack deal and my money would be on Sinai and Harwood taking it private. They have sunk a lot of cash into the business and would not just walk away and let someone buy all their investment for a fraction of what they would value it. They both pumped further cash in today. So if there is a purchaser - they need to pay what Sinai and Harwood value the business imo. I took up some VRCI retail placing at 9p; and bought some more at 11p; hold a decent slug of EFK; and still hold some NIOX although have been selling at 60p+. Don't have any trellus. Not unsurprisingly I would like the bio tech sector to come back onto the radar for II's......SB
Just waited for confirmation on small cap report on renx from Paul Scott. He makes a very good point about the cash burn and possible further raise . On the takeover he asks why would anyone buy Renx when in all liklihood they can buy it out of administration? I saw someone arguing not to wait to see if it drops below placing price and why you should buy at todays price. I cant see that argument stacks up at all. Be interesting to see what Harwood does. So that leaves me with the choice of Vrci or more EKF… or more of the sllightly better Harwood case Niox! think I have overdone that already
Yes interesting to see the recent weakness, though it's on very light volumes, so frankly any seller or buyer (above say 200k shares) is going to move the shares close to 10% without any effort, this is AIM after all!
I'm looking forward to the update next week and expect to hear that the company is comfortably back to generating healthy monthly free-cash, and that the Fermentation/Enzyme business is starting to contribute progressively and then materially heading into 2025...
I see EKF being in the ludicrously cheap category and could therefore be bid for (at some point), like a growing amount of cash-generative AIM stocks. Think Wincanton, Hotel Chocolat, Mattioli Woods...
In the meantime, EKF has an excellent PoC business and they're likely to create a similarly strong market position in Enzymes, suggesting we're now in for a decent period of FCF growth, leading to higher dividends, share buybacks and a likely eventual take-out.
What's not to like here?
Just been relistening to Chris Mills discussing all three companies with Paul Hill recently. Ekf looks the strongest currently, with Mills on the board and he recently bought 100k shares@30p. He also flagged up that Rnex was running out of cash and needed a dramatic cash injection which unfolded today conveniently after the alleged approach which drove the sp conveniently up to 60p , nice timing . Tempted at this price, but maybe not that desperate to honest in this market! As chris says life science is not the easiest thing to raise cash for at the moment. Vrci on the other hand managed that quite successfully and I did mean to buy into that, but bought more ekf at 27p recently. Results expected to be conservatively in line with growth in the diagnostics side but nothing priced in for the enzyme business which is probably a year away from orders still.