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We reached the critical point of profitable trading ,and now all the risks have been addressed the future is bright...Very bright....
Mike,
The RNSs last week and this morning very welcome, but considering the potential of the RNS last week thought the market response "muted".
Still believe the market is looking for the company to show it is run in an operationally efficient manner in the short / medium term in results from existing contracts - an extrapolating this efficiency in high margins, tight fixed cost and working capital management onto a future portfolio of growing and widening income streams.
Short term executional excellence will drive the share price.
We have been here several times before but perhaps this time we may reach escape velocity.
Kromek wins three new CBRN contracts, one with large new customer.
https://www.proactiveinvestors.co.uk/companies/news/1031469/kromek-wins-three-new-cbrn-contracts-one-with-large-new-customer-1031469.html
View from Vox
A major contract win for Durham-based Kromek as the US and other governments increase their focus on biological threats, particularly in light of the Covid-19 pandemic. The £5.9m 4-year programme aims to provide increased capability to detect and identify biological threats in response to the operational needs of the DHS.
Kromek will pilot an agent-agnostic bio-detection system capable of providing species-level identification of biological agents. To date c. £15m has been invested in the programme, including c. £11.5m of non-dilutive grants from the US Defense Advanced Research Projects Agency (DARPA), Innovate UK, and the UK Ministry of Defence.
The contract gives Kromek good revenue visibility over the next 4 years, with US$874k to be awarded during the 1st year to October 2024. It also provides further substantial endorsement of Kromek's IP, building on its existing expertise in the field of bio-detection solutions.
Investors welcomed the news, driving
KMK
shares 15% higher on Thursday. Broker Cavendish maintained its target price of 25p (21-31p range) in which the biological threat detection programme is valued at £30-50m or 5-8p per fully diluted share, compared to Kromek's current share price of 4.9p, which gives it a market cap of £28m. Cavendish does not believe Kromek's biological threat detection programme is yet reflected in its valuation.
Kromek Group Plc
KMK.L
Kromek Group Plc
GBX
Pedro,
Cant take any of the credit for Shorns prompt removal, but i did report him to Lse and mentioned that it was tradey in a new guise and could they do a check lol - departed very shortly afterwards lol. So clearly he's trying to circumvent his permament ban, will continue to keep the eyes open for him, he's so easy to spot with his righteous tone.
Well done on removing todays reincarnation of his, he's not one for giving up an argument but he's truly had his wings clipped and needs ro stay as bad history.
Heard it all before.
3 days of rises....Only the start....Seriously undervalued.....Long way to go....
@malcylon. Correct, this is typical of kmk marketing. They simply have no idea. They should be featured in the Financial Times and peak time news forecast. But never have been.
The rerate continues......Very....Very......Undervalued play.....that has recently turned a corner.....No longer a cash drain....soon to be a cash machine.....this is the inflexion point.....Upwards from here....I think....
They win such an important contract and then give the media scoop to the North East Times. No disrespect to the North East, but this is another example of how poor the commercial strategy is.
Not sure when this was updated -
https://www.kromek.com/bio-detector-information/
For what it's worth : I don't like to take sides on companies. I think it's inherently dangerous to become emotionally attached to stocks in some way that loses your objective analysis. That said I have learned from this forum - in some ways the hard way - by having attention focused on the weaknesses of management. I don't think many CEOs set out to lie to their shareholders. But some are naive or their skill set lies elsewhere.
In the case of KMKs current CEO and KMKs overall approach, the fear I have built up is that they are potentially too much a collection of geeks interested in inventing things, and not commercial enough to sell the things they've invented at scale. That's one simplistic view. There are others.
Above said, winning contracts from a US government agency isn't easy. So I remain open-minded. There is a chance that the solutions they've designed are slightly ahead of their time, and that as we head more into a world of geopolitical instability, which seems clear for the next decade at least, that sales of these solutions will gain traction. Then my fears become: will foreign agencies seek to replicate what they've built? Maybe too hard. Or worse, do some of these solutions just not have a big enough addressable market to make the ROI of inventing them worthwhile? I'm not deep enough into it to know the answers.
But I am far enough into being a shareholder of KMK over many years that it's not worth giving up the intimate sense of the share price that I have built up over time. This is worth something, especially if it's a company that has some potential even in the hands of weaker management. In my view you don't buy stocks like this and sit on the holding, otherwise your average cost price will always be too high. I started out at 12p or so but when I realised the price was in a constant drift, I implemented a much more involved trading strategy. I wait for deep levels of weakness and buy in, then sell on days of strength like today. It's the only way to bring your average cost down to an acceptable level. Some don't have time for that which is understandable. Some understandably prefer to move on to a company with better management. There is also a flight to quality going on which has more to go in my humble opinion. Financing is more expensive and the availability of credit is getting tighter, so you've got to manage your risk much tighter now. Good luck everyone :-)
"The contract has been awarded under a four-year programme, which commences immediately, and the Group expects to receive $874k during the first year base period." £874k only first year and how much of that is actually profit?
Ironknut. You are definitely not wrong.
As long term holders have experienced Basu’s bullsh17 and his lies plus the BOD’S lack of respect for shareholders. we have seen many Simon Thompson’s analysis giving small spikes only to be followed by long trending declines.
There are many new bloggers here in the last couple of days who have just bought in and not experienced the above which long term holders have. I genuinely wish them all the best especially as I’m still in here drowning. I need to see 17p to breakeven so I’m hoping this can be the best turnaround ever. However I’m not holding my breath as I’ve got none left to hold!
Stu.
These r&d type deals are based on direct cost plus a fixed % of overhead cost to cover corporate costs such as buildings - the % need a to be approved and probably on an open book basis, so low margins and no immediate exploitation of IP. But ensures high utilisation.
Big difference between before and now....It is called profit....No need for Investors to cough up.....no need for people to sell....The future looks nailed on....Realistically over a 3-4 year period 20p could be achieved....but at this s.p. and given the orders will start to flow in ,this has lost its risk rating,in my opinion....
This contract is clearly good news, but it is for R&D for new items and not for sales of what they have already developed. We need some substantial sales of the things that are in production to get this share moving in a positive direction. All in my humble opinion, of course.
Ironknut - they are building a varied portfolio of contracts and just need to 1. Keep central costs static so gross margin from contracts is leveraged 2. Control working capital 3. Execute against the contracts.
As you say history says not, but I can see the early signs that the cfo and chair are starting to get a grip. Let's hope so.
A long way to go before 20p is achieved. If it ever does i shall be delighted to say i was wrong and eat my hat. This i suspect is the latest in a huge number of false dawns however. Just look at the history of the sp. A nasty chart to look at.
Only the start...This will rerate,now.....20p?
Looking at this company it's winning quite a few contracts, with homeland in its pocket, should open many many more 🚪
With this new contract, that should open many doors...
And sorting out its money issues...
Could this company be ready to hit 12p
This contract will open many door, transformational.