The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
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They do have evidence and it was explained to you in the investor call. They advised they expect more orders and a ramp up. But it is just guidance and not legally binding so you are being a bit provocative using terminology such as insider trading and insinuating more practices that merit FCA review.
As I said, if you don’t trust them sell.
Why? Maybe because the institutional investors had better information than the retail investors? How might that have been the case?
NGR1616
The Board has clearly stated that 'cash' breakeven will be reached by next year.
Which part are you struggling to understand it seems clear to me.
So your opinion is that STM will provide a large order of magnitude £7m to £10m for gen 1 materials that will generate sufficient cash to reach cash breakeven next year?
Nothing wrong with that as ots your 'opinion'.
Any ideas when such a commercial deal will be delivered?
Pete, Im afraid people got carried away with their own enthusiasm. If it was such an easy win where were the institutional investors? There were no new ones that joined the $500m party and those already invested sold down.
Why? Because they are professionals and knew the risks and understood the guidance. Many did not.
For the Board to state cash breakeven will be reached next year you either have a large order on the table under discussion which would be price sensitive information and highly inappropriate to be launching a buy back at 24p knowing that you will sign within a few weeks or even months following 25th April, serious hot water for the Board and the risk of 'insider trading' or you are just guessing you might get something by Christmas in order to start shipping in early 2025...
It looks on face value that reaching cash breakeven next year is unrealistic and the Board have no reasonable evidence to support this claim.
Please do not question the companies narrative or try to work out how they can meet expectation they have put in the market because making such calculations may make said expectations look very challenging and there is no evidence of any commercial traction as yet that might justify their confidence. Just believe.
“ Until the board specifically guides differently, you can't make claims of discrepancies, misdirection, misleading or misguiding until there is more to go on”
Seriously?! Because they did such a great job on the settlement guidance didn’t they!!!
I was mistaken that's not what you meant.
For clarity I think BE FY25 will come from STM and STM alone for Gen 1 materials.
Furthermore there is no requirement to sign any more "commercial deals" at all to reach break even. I think the intention is to reach it under the existing arrangement. It's PO's we need but I assume that's what you meant. But of course more deals would be welcome (as referenced in the risk of a single customer BT mentioned in the investor call)
NGR1616
Nope that makes things worse if the first deal is signed in mid 2025 you need a much larger order to generate sufficient cash to reach cash breakeven during that year!
I think the answer to your question is during FY25
NGR1616
No it's not it adds to the discussions here.
Investors have been advised that cash breakeven will be reached next year.
We can estimate margins, I've veered on a lower 60% margin which seems reasonable.
We know that £23m cash will remain after the return of value.
In is now now mid April and we know contract negotiations with sinage followed by manufacture ramp up, delivery, invoicing and cash collection take months, ergo to reach cash breakeven needs upwards of £7m of commercial deals to be signed.
This is a forum for discussing and debating what Board guidance has been provided...my question is when will these commercial deals of such magnitude actually get delivered?
That my friend is a very reasonable and pertinent question for all Investors both existing and new to query!
I really don't want an argument, just a wider perspective.
For example....
-how do you know the cash burn will remain the same - perhaps there are additional costs in setting up the fab? Perhaps it will go up further on the back of new production demands?
-How do you know margins will remain as is for example? - they guide they are aiming to improve production efficiency.
-How do you know what the price point will be for new contracts for example? - perhaps initial orders are loss leading?
My point is we just don't know.
But, if you don't trust them-sell. I trust them just now, and aside from trading just now have no immediate intentions to sell or reduce my holding.
I understand why you have arrived at that figure, but these are not facts, they remain your opinion.
Until the board specifically guides differently, you can't make claims of discrepancies, misdirection, misleading or misguiding until there is more to go o. It's just your opinion but the broader point is your 'opinion' ( and that of other similarly minded individuals) in my opinion is harming ALL of our investment.
NGR1616
Exactly the Board have stated monthly cash burn at between £300k to £400k hence to reach cash breakeven they need c.£10m extra revenues if we assume a 60% margin and no doubt there will be tax to pay. Hence even discounting historical tax losses a minimum £7m+ of extra revenues need to be generated in order to reach cash breakeven next year...
That is a fact not an opinion you can't reach cash breakeven next year on thin air alone without generating some commercial deals in the meantime with the contract negotiation and deal sinage no doubt taking upto six months to finalise in advance of orders being delivered and invoiced!
These arn't opinions but simple practical business facts!
Where have they guided they need an extra £10m in revenue? They have only stated they will be self financing during FY25, and not published anything in relation to revenue. That's your interpretation.
In the same way we had clear discrepancies on the Samsung settlement market expectations as communicated by the Board and how inside 'preferred' shareholders acted we now have clear discrepancies in reaching cash breakeven next year!
On the one hand annual cash burn is around £3.6m to £4.8m yet to reach 'cash' breakeven as stated will require an extra £10m in revenues..
Are we headed for yet another Déjà vu event with this Board again misdirecting, misleading, and misguiding the market?
Confirmed - Zzzzzzzzzzzzzzzzz..............
Just to say that comedy itself has gone in a weird direction.
People seem to be really into ironic comedy, fakeness and cleverness.
Troublesome - do you think it odd that the ticks would be adjusted overnight or not or is this beyond your range of 'critical thinking'? I guess "lol" will suffice.
I was being ironic. I'm sure the phrase rings a bell with some. Even you could probably find it with some research.
If you think I have BT on a pedestal you are, as you are with most things, mistaken. It's just that for me he's not failing.
Brian (joke) Lol
@NGR
Rather predictable spiel that NGR but don't see an explanation for your 'its been emotional '.
Any ideas who or what that was caused by - I'd have thought too high expectations and excitement engendered by members of the Board, especially the beloved Brian might have played a major part. But of course, I assume you'd find that acceptable, I assume, as part of his 'game of bluff' with Samsung that has been mentioned previously.
HH I took a screen shot at 21:41 of your post you made at 20:42 re your "deceitful CEO comment" and sent it to my mate Brian (joke)
You had 17 ticks at the time. This morning only 6. Very Odd.