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Certain patterns are probably very familiar to the guys who day-trade OCDO. And sometimes the moves even standout to me.
Like today, when the biggest volume of the day (2) landed just as the sp broke through the falling trend (1) just after lunch:
https://invst.ly/14m-ic Why would someone looking to offload wait through the morning for the price to fall and then sell just as it starts to recover and break upwards again? It isn’t a smart selling move unless the objective is to use the power of volume to limit the price and drive it back down.
Later on, a little bit more volume also helped nearer the close too, helping the price to a nice low going into the auction,
Just imagine if you had happened to sell around 7k of shares during that last 15 minutes (at, say, 16.28.24) for £25.31k knowing that you might somehow buy them back just after the UT (at, say, 16.36.23) for a bit more - like £24.7k. That would have been an easy £580 in less than ten minutes wouldn’t it? Not big time stuff but OCDO is perfect for it - you couldn’t do that so easily with Shel or BP. That example was purely hypothetical, of course, and I’m absolutely sure the transactions I referred to were not connected.
Boyobach
Thanks...yes I agree with your post ....
Musk regarding Tesla : " Any manager who retains more than three people who don’t obviously pass the excellent, necessary and trustworthy test” should resign"
maybe that is needed a bit here .... some more cost cutting to improve margins and achieve those cash targets
The FED may now set the tone for the next SP move .... but... the H1 Results are becoming clearer in terms of making some key figure predictions ..
What is the collected wisdom of when to buy in - At 240 perhaps?
That’s a useful and relevant set of information Pokerchips.
Yes: I think the bulk of the cap-ex spend on Tech R&D should have been done by now and the spend on CFC’s will be largely according to demand but will include an ongoing maintenance/update element..
I haven’t seen any additional Tech spend guidance but I would assume that the ‘£34.7m to technology projects (FY22: £26.5m)’ contained In your post would cover it and it would only get increased if there was a clear business justification. I’m sure those budgets would have been rigorously set by the start of the year, hence outlined fairly precisely in those FY23 figures.
Once you’ve developed a product ready for sale then nearly all of the development tech spend is done. There’ll be ongoing R&D to ensure the product is updated and improved as needed but the heavy lifting has been done and they should then target R&D in a strategic (sales orientated) way. In terms of selling the existing systems/products it’s simply a matter of building and installing them according to demand: no demand = no manufacturing or installation costs (beyond the core team employed full time - who possibly support existing clients anyway when they are not too stretched).
I’d be very surprised if VP’s Cash Reserve depletion scenario comes to pass because net cash outflow is reducing at a reasonable and controllable rate
TS (along with the other founders) is an ex GS banker isn’t he? If he was a Tech Guy I’d be less confident - only because the technology can become the main goal for them.
Boyobach
following on with regards cash needs , towards the end of the FY Report ..it states
" Contracts placed for future capital expenditure but not provided for in the financial statements are as follows: "
" Of the total (£105m) capital expenditure committed at the end of the period, £66.5m relates to new CFCs (FY22: £232.4m), £2.3m to existing CFCs (FY22: £1.3m), £nil to fleet costs (FY22: £7.6m) and £34.7m to technology projects (FY22: £26.5m)."
so does that indicate in itself the lowering of CAPEX for committed infrastructure....?
Do you have any 2024 Guidance figure on the TECH spend ??
....again, was a large amount of the requirement spent in 2023 meaning far less now needed in 2024?
I absolutely agree Pokerchips and in trying to dismiss the notion of cash reserves being depleted in an uncontrolled way (ie cash burn) I missed the opportunity to emphasise that the cash was used in a planned way to invest in key aspects of the business. Although VP would have seen the word investment used in the Financial Statement and understood this, but AquarianAge possibly hadn't.
And I also agree that many people are missing the point about the pre-tax 'Loss' including amortised costs (like the cash just invested).
Thanks for pointing that out.
Ha! It was, of course just over a week ago in April, not March, when 342 was the go-to bottom at reasonable pace, with a 335 overshoot at one point.
Time flies when you are in trading view.
The drop below nominal support line 350, isn’t too much of a surprise and the trend to 342 got the usual steeper branch added today:
15minute trading chart at 2pm: https://invst.ly/14mwwl
What has surprised me a bit has been the relative slowness of the drop. In March, 342 was the go-to bottom at reasonable pace, with a 335 overshoot at one point.
The return seems more reluctant this time around. Perhaps that indicates that support is firming up. I think the shorts will give us an indication.
But, yes, if it gets pushed hard enough (even though I don't think the bad management and refinancing narrative actually stacks up) I can see a bargain price approaching.
Next stop 340p , then break 335p to set new lows. Sub 300p inevitable as no good news. Shorters paradise.
Bad management, high debts refinancing cost. Ft250 inevitable this value SP eroding everyday.
Boyobach
outside of any argument about share prices ....
You could argue that a lot of " cash burn" is used to enrich( or whatever word) the company ....as a result of R&D investment ( + tax rebate) , future non invoiced revenues ( currently a book liability) and accumulated Tax losses as a result of bottom line "losses"
so... I personally would use the term "cash investment" rather than the commonly used term "cash burn"
Of course this "investment" isnt shown within share prices generally , as terms like "burn" and "loss" are always taken in a fully negative way
Sorry, I tend to associate significant and continuing reduction of cash reserves with cash burn.
I apparently made the same mistake as AquarianAge (Considering the rate at which Ocado burns through cash...)
If the cash outflow continues to halve every year, then the picture would be very different. And with all the hard development work done and CFCs earning revenue, that doesn't seem an unrealistic prospect to me.
Yes, net debt doubled in 2023. Could go even higher in 2024...
Post about Ocado Automated Storage and Retrieval liked on LinkedIn by an Argos logistics manager.
She has a recommendation on LinkedIn written by the Coles Head of CFC Operations.
Fluff with no substance of course but Argos owner Sainsbury's have been starting to make more investment in warehouse automation.
" Debt has doubled this year. "
VP
I think you mean last year and NET Debt ( as a result of a drop in cash) +86%
Gross Debt remained pretty much the same
"Gross debt (including lease liabilities) at the period end was £1,959.9m (FY22: £1,905.1m), with net debt* at the period-end of £1,075.1m (FY22: £577.1m) "
Ocado is in 114th position currently
https://www.stockchallenge.co.uk/ftse.php
Are you assuming that main shareholders never loan out their stock to Hedge Funds?
The thread is about Ocados cash reserves. 443m was spent last year leaving less than 2 years of reserves left at that spending rate. Debt has doubled this year.
Cash raise in around a year's time imo.
This thread is about cash burn - which actually reduced y-o-y .
Recording the AS settlement as a receivable is standard practice but only 20% of it has yet appeared as cash.
As pointed out previously, the losses figure is a consequence of handling large software and system development costs (which have already been paid for) in a tax-efficient manner.
Conflating separate elements of the accounts can give misleading conclusions about future cash burn.
It is true that "This year's losses would have been higher than the last were it not for the one off Autostore receipt of funds re legal case settlement."
It's being paid in instalments but the whole amount has been taken into account as received:
Well that was clear from my post: The settlement has been recorded as a receivable measured initially at fair value and subsequently at amortised cost.
Most of the cash inflow from the receivable is yet to occur.
Underlying cash outflow is £472.5m (FY22: £828.2m) and improved by £355.7m year-on-year.
Current borrowing facilities include a £600m convertible bond that matures in December 2025, a £500m senior unsecured note that matures in October 2026 and a £350m convertible bond that matures in January 2027. These facilities are expected to be refinanced on a timely basis to maintain appropriate liquidity.
It's being paid in installments but the whole amount has been taken into account as received. Below is recent FY 23 accounts.
"Loss before tax of £(394)m, taking into account £187m from the settlement reached with AutoStore, an improvement of £107m versus FY22"
The one off Autostore receipt of funds re legal case settlement is being paid in 20 instalments:
Group reached an agreement with AutoStore to settle all patent litigation and cross-licence pre-2020 patents, for which AutoStore undertook to pay the Group a total of £200m in 24 monthly instalments, beginning July 2023. The settlement has been recorded as a receivable measured initially at fair value and subsequently at amortised cost.
Payments totalling £41.7m had been received in FY23, so a little over 20%
How much longer can they keep shorting this. The top 10 shareholders all lth have 71%. So they've shorted around a quarter of all available stock, if not more as there is likely other lth below the top 10. If a big deal gets announced they're going to be in big trouble.
Earnings out today, would expect some positive results and a nice jump in the share price.