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I think we'll be in a better position to sell if there's no .London eating a big chunk of revenues, so I'd prefer to get rid now - and they were only waiting for the legal side to be completed.
I'm not sure what will happen from an accounting point of view, with the "onerous contract provision" already shown on the balance sheet as a large loss, with the cash coming out to pay it.
I would think around the £150m mark . I do not agree that there will be a discount for ICM ,it’s all in the mix now .
and how much do we discount for the ICM portfolio? It will be a consideration imo.
if they can get to $9/10m+ profits then add in the $5/6m that can be saved in current o/h/expenses, then that could be near enough.
so a valuation of approx £147 m ?
I agree Silverblade. I certainly have higher expectations for an eventual buyout of the company. The beauty of the company is the now predictable annuity income which will appeal to not only interested industry insiders ,the candidates having been noted by SL in the past ,but also to hedge funds etc.I am working on a 16p price ,a price I am sure most would be happy with.more would be good but 16 works.
The two big recent deals (donuts and .org) show the PE money is there when required. The issue which we might have - and this is just conjecture - is at what price our larger II's would be prepared to sell (SJL aside as he is a PI like us - just on a slightly larger scale....). Lets assume there was a line drawn in the sand after the review when whatever was on offer was not enough to sell (and i think its safe to assume after running the numbers at that time that potential acquirers saw too much risk with our income and priced accordingly ). So we are in a position where our BoD are possibly aware from our larger II shareholders what their expectations are on any future exit - hence the continued focus on sorting the balance sheet, creating a strong recurring EBITDA (and more importantly - a net distributable profit), and demonstrating continued growth in our portfolio. What is going on in the company results wise is relatively transparent given our plc status - FY2019 $6-7m EBITDA, FY2020 $8-10m range? - and that's a completely different business to a whopping $14m loss in 2018. So - plenty of cash in the market - as always the question as noted is what would it take to convince II's to sell - many have been here a long time and would look to exit at a substantially higher price than where we are - who knows maybe our 'low' expectations are the result of so much negative focus in the last 18 months. I think it was ezzza recently who noted somewhat higher expectations - now that would be something waiting for.....SB
yes Sunday, but how many can afford us, and at what price?
I agree with you Bakky,only if this rate of growth is maintained I think it will be much sooner than your timeframe.MMX has to be on the radar for any serious player in the field that can afford us.The synergies involved make us a compelling investment.
it matters not in the big scheme of things as I expect this to be sold in the next 12/18 months anyway.
Morning Tap ,
Actually I have NO idea whether they will go the dividend route . Having spoken to them several times in the matter , I do know that it isn’t some of the BOD’s preferred route esp with the US taxpayers in mind as any such dividend would be taxed as a “non qualifying “ dividend so subject to less favorable tax treatment . I don’t think it is an unwillingness on the part of the company to part with the $$$, I just think they lean more towards more US and perhaps other jurisdictions tax favorable ways to structure cash returns . I have repeated my mantra that the tax tail shouldn’t wag the dog on this and personally it would be my favored route , so we shall see . They will do something I’m sure to return cash , would give divi odds at no more than 50/50 .
As stated before , my reading is that the settlement documents have been “ agreed “ but may or may not have been signed out of caution from one side or the other . November / December are massive net cash inflow months with at very least .xxx launch renewal anniversary date of Dec 6th and the RARS tend to pre fund their accounts with the registry last minute to ensure the “ auto renewal “ of the names , so an abundance of caution is wisely being applied . Personally , in truth , given that the whole outstanding contract loss liabilities have already been provided for I have always been very ambivalent about whether they paid the $5.1 MM cash 2019 or let it roll out over the remaining period of however many years left . In some regards it’s a pity that management / the company don’t have anything up their sleeves or initiatives afoot that they believe they can’t realize a greater ROI on the $5.1 in that time scale ! Now that would be an exciting announcement ! All said and done tho I agree that having the predicable ( and therefore boring ) certainty and predictability of the enhanced income stream is probably more of what this stock needs to rerate it as the annuity type cash machine . So I think once the RAR monies are in and especially IF Adultblock is off to any kind of flier as we hope they will execute and announce . I think that they will be prudent and wait until the “ books are closed “ for year end until they officially announce any divi / tender / shareholder cash return plan . Would be normal housekeeping practice I think .
I'm just pleased that they are in a position to pay it off at all at this point. However. in doing so I think that any divis will have to wait a few more months imo.
.London is certainly our current Achilles heel - i'm with Taproot on this one in that we need to see the year out before we can make any comments on failure to achieve the settlement - despite all our wishes to see the earliest possible ink on the deal. .London continues to be a drag - we have more than 3K+ deletes in the pipeline - taking us to our current lowest registrations since 2014 on that property. On the plus side - everything else is looking good to great!! SB
Regards Luxe there is going to be bigger numbers because of the freemiums (500k) so I don't expect too much revenue from the extra 'sales'.
well I'm sure management know the rules and know what they are doing.
We would need to be "well in profit" as not just this years result as a stand alone so we need to clear the cumulative losses first before dividends can be declared so that's best part of 7m before we turn to positive territory to be legally able to pay a dividend. I should know this but what level of net profit are we to expect this year (putting yo one side the like of Luxe and AdB as these are unknowns - hopefully good unknowns!)
adds another 638... nearly at 9k now.Long may it continue too. Hopefully adultblock is doing similar and going strong..
there is no hurdle if they are well in profit.My point is after they have paid down .London etc then there won't be much left for anything else, unless Adultblock has blown the roof off?
Yes I would agree, so my thinking was the big loss reported last year put them back but if this year brings them back into the black they could be payable but if this hurdle is stopping them I'm not sure there'll be much scope even if they have the cash at their disposal.
all depends what profit/loss they show y/e this December surely?
I'm all for dividends but from a technical point of view are they in a position to legally pay dividends? Thinking along the lines that you can ONLY pay dividends from retained net profits and looking at the Dec18 BS they have retained earnings of (6.87)m so retained loss does this constrain the option to pay until positive net profit/retained earning are reported? Having cash is one thing but dividends can only be paid from profits. I may be wrong but thought I'd put this potential explanation out there for discussion.
Or possibly SJLs cat running amok in the Lawley household again - really should apply some 'pet guidance' on the Wifi access ;)
Regarding the issue of dividends, their 'ambitions' could have been realized through a dividend payment and hiding behind semantics for the company, doesn't negate the point Taproot and others are (justifiably) making, imho.
Atb
I wouldn't be surprised in the slightest Dandee!
Agreed that previous comments were about ‘ambitions’.....but more recently the interims referred to a progressive dividend or tender offer or both. And there has been previous activity on a tender offer - can you imagine the take up at 13p now!!! As I said to Taps - let’s see what happens in the next 6 weeks. SB