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whl2 i didnt say they owned 25% . i know what a trustee and a company is. Dont claim i said they owned 25%. The source of their 5% is what concerned me but i m glad if they made a genuine bet on the company. RNSes are of similar evidential value if not more than websites since they have to meet stock exchange regulations i think you ll find. Hollow laughter from this board just like most of the information hitherto
I will answer the holdings question first. Had you gone to the Harvest Minerals website, rather than blindly looking at advfn or lse rns's you would see the asterix pointing out that 20.2% of the HSBC holding belongs to the Edwards family. Ffs even quisad was shouting from the rooftops that day that HSBC did not own 25% of HMI !!!!!! As to the salaries and expenses, like yourself I have no say in the matter and like yourself I consider them out of proportion to the companies earnings.
I would add, however that I was impressed with the photo of the site today, and that site and the company are worth considerably more than 4.6 million pounds in my opinion. The new line of credit could (and should) open up new sales leads and push us to the magical 6 figure Sales next year. I still feel that all the expansion (production, storage and mining site) has been done for a reason - Veloso maybe ? Either way, I am more than happy to hold for another year and hope you will also be here when things pick up and we move to a more realistic share price. A lot can change in six months, JAN were 1p in May and now 4.75p today.
And why Whl do you ignore the vast expenses and salaries ?
Umpteenth of million that s 0 times, which is the accurate comment . On the substance it s good if you are right about the Edwards but it did look that all the holdings by hsbc were part of the erstwhile holding of the Edwards. I definitely wasnt the only one to think that, and the fact that HMI allowed that impression to be given shows the current level of competence.
Well I'm forever hopeful that something big will happen, for sure it's worth 10p if they can line the ducks up
For the umpteenth million time john, the Edwards family HAVE NOT fallen on hard times and hold the same number of shares (37,227,738) as they did in June 2018 after the placing. Their % holding was reduced from 28.4 to 20.2 due to the issue of the 18.5p placed shares but they have not sold a single share. Rest assured, no member of the family is engaged in robbery or prostitution, and like us they will presumably be frustrated by the share price and Brian's binge spending expansion scheme. Some good posts over the past three days, and yes that does include you bopd. It would be nice to see some form of trading update before the end of the year indicating that the company achieved 50k sales this year.
The company have always said they believe once they get customers on board that the year after and so on that same customer will buy more kp fertil each year. This does make sense to me as farmers try this brand new product and see results for themselves. Unfortunately those results will take a buying cycle or 12 months to see the benefits. Also would tie in with why they have expanded storage before next years sales. Just my opinion but I believe if we can hit 50kt tonnes this year then it’s only onwards and upwards in the future. I follow their Instagram page also and followers seem to be constantly ticking up. I know on the face of it that doesn’t seem relevant at the moment but hopefully it’s some more evidence the product is gaining traction. Just my opinion. May look to top up at this price... £4m mcap!
The Edwards family have seemingly fallen on hard times, having sold or forfeited some of their shares to hsbc and there may be more. If there is a placing/dilution at this price that could amount to an almost total write off anyway which if i were pessimistic could lead to insolvency and being bought up by the people that know its actual value.
YES I must admit I was for discounting the first 3 orders any company made for kpf
Because their cost of sale is 10$ a ton. So at 40$ we sell naff all, if we go below the competition we'll sell more. How long do you want to wait for the money, after all they have a 100 years of production full capacity. It's better to sell and get cash in. Then they can develop the other mines off the share price rising. The share price is **** because the sales are ****.
I'd be amazed if the management could get a 51% majority for a buyout given the disastrous fall in the price over the past three years. Certainly couldn't see the Edwards family agreeing to it. Company really is in the last chance saloon next year. Years of test results, fertliser still coming out of their ears after filling the storage sheds full - otherwise placing here we come.
I wonder if it s worth enlisting the help of major shareholders like Pershing Square and HSBC (or even the Edwards family) to stop the incompetent and profligate course they are on. if nothing is done we could well see a management buy out in a while and current shareholders virtually wiped out.
f15jcm,
I don't think so, in the region where HMI are operating at, I can imagine there's a lot of competition. It's hard to get new clients, but easy to maintain and resell to them - especially big clients that would order in large quantities.
Which is why I think that maybe COVID MAY help out by taking out some of the competitors during this period. And when economy does start to recovery, maybe HMI are able to secure the contracts that were lost by their competitors?
Anyways, I'm going to follow their performance. Any improvement in sales in Q4 2020 may provide some confidence or outlook for positive cashflow in 2021.
We'll see!
ALL IMO. GLA.
I don't think that they should cut prices.
Why should they?
HMI knows and believes that their product is good in providing farmers with a good yield and better product. Cutting prices will just dent this belief. With positive test results, there is no need to cut prices.
The mine is situated in the biggest and fastest growing agricultural region in Brazil (and world). So ofcourse they are going to sell the most in this "local" region. But there is potential for countrywide and worldwide if they do end up acquiring good contracts.
There are sure to be big players within this "local region" that export raw ingredients (for coffee, soybean, sugar etc.) worldwide. But it's possible that these big players also have sites elsewhere. That's what it means to acquire a big contract with a big client.
Anyways, HMI's customer base is slowly building (even if it's smaller players). If their product is as good as they say, the current clients will be returning next year whilst the company secures new contracts, growing the business post COVID.
But until it's big enough to produce positive cashflows, investors are going to be tapped into for liquidity in future years. If Q4 sales is greater than expected, then it should be a positive step forward. But I don't think this will really take off until the economy starts recovering and there is stronger demand for products.
JUST IMO. GLA.
Slift
No because they want to sell in the local region. They're going direct to the growers to procure contracts. Noone has offered them a big deal yet. And they dont want to cut the flipping price like I said.
Interesting post, Slift. In hindsight, do you think they could have secured offtake before they completed the mine? I know the product is/was something of an unknown quantity but that didn't stop Sirius Minerals.
The problem is they dont want to lower the price. Cut your nose to spite your face.
bopd,
I've been pretty impartial with my analysis.
I don't have any position here, but will invest when I feel there is value or potential here - which is why i'm following the company.
Covid as for an excuse, you're right. It's the loss in distribution/sales contracts that have impacted this company.
It's not an easy task to gain recurring clients that will buy the product - especially major ones. This is the problem that this company is facing.
Once they have a contract with a major customer/client with multiple sites in both countrywide and worldwide.. that's where the real sales will come from.
I suppose in a way, the fact that covid has happened MAY help this company in securing these contracts when the economy starts recovering.
For any company, cash is king at the moment. But here at HMI, they are using available cash to build storage, expand site and acquire mining licenses when NOT REQUIRED. Especially when they are actually losing money with operations with negative cashflows.
They could have done this for the same price when it's required after there is demand for KPFertil.. It just seem like a big waste of cash atm.
Like I previously mentioned, they have two ways to improve accounting so that they "make a profit" this year:
1. Expanded site --> Adds value to asset so that added value is essentially "profit" on an overall accounting basis
2. Stock up with inventory within expanded storage facilities --> Again inventory adds value to current assets so this can be seen as "profit" on an overall accoutning basis..
But in reality, they really need to improve sales, and the best way to do that is to get recurring BIG CLIENTS that will use the product both countrywide on multiple sites and worldwide.
It seems as if they are simply targetting the smaller farmers at the moment.
JUST IMO. GLA.
Slift
The use of the Covid excuse is wearing a bit thin
When i raised the subject several months ago i was told that HMI did not anticipate any disruption to output or sales.
At the time i was sceptical to say the least but as a farmer in Brasil i can report that indeed very little has changed in the countryside where we have continued operating as normal which is a big contrast to the pandemic in the major cities