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I have been expecting a trading update this month, I hope the massive fall in share price today is not related to a poor update when it is announced and just to a 'bad stock market day'.
Does anyone know of the date for the trading update?
Hebridean,
This week has seen a sea of red in the markets, with prices crashing across the board, so the fall has to be seen in that context.
There were just a couple of moderate sells yesterday (30,468 and 11,378 shares), about a couple of hours before closing. causing the fall of 21.6%!
The 11,378 shares seller can't know much about OTAQ, or he would surely have waited for today's regular monthly SIP purchase or about that same number of shares, to give him a better sale price:-
17-Jun-22 11:50:22 15.50 11,777 Buy* 14.00 15.00 1,825 O
And it may have been the same seller for both, as they were quite close together.
OTAQ is looking ludicrously undervalued, trading at about net asset value now, with stellar growth prospects, and business appearing to be great.
I certainly think that OTAQ has £100M. market cap. potential, within a few years, which from the current cap. of just £5.47M. clearly gives quite extraordinary upside.
OTAQ has given us two good RNSES very recently (Tuesday 31st. May, and Thursday 9th. June), which were its first real news RNSes of this year, and it makes sense to spread them out a bit, rather than bunching them too closely together.
I believe that trading for the year ending 31st. March 2022 must be relatively in line with expectations, else the company would have more imperative to notify the market earlier.
Technically the company doesn't have to give a trading update at all for last year if trading is relatively in line with expectations, although it wouldn't be good practice to go too long without some sort of update.
But the final results were issued in July for the last two years, despite COVID-19, so potentially this could be brought forward to H2 June, and bypassing the year end trading update.
What will be more interesting though will be to see how this financial year has started, i.e. April-June trading, and the outlook statement.
Could we also see some more non-SIP director share buying at these lowly levels soon?
Well, not before the final results, because we're in the close period, which gives outsiders an advantage in taking advantage of what should be a great, and potentially pretty brief, buying opportunity.
OTAQ has gone down on pretty low volume, and likewise it could go back up on pretty low volume.
There's only a few £K. of stock available at about this level.
Plexus Holdings (POS) has announced a good contract win today, which shows that O&G activity in the North Sea is recovering well.
OTAQ's offshore oil and gas business should be a good beneficiary of this bullish environment.
20th Jun 2022 7:00 am RNS Secures Oceaneering Order
"Secures Oceaneering Order for Plug & Abandonment Campaign
Plexus Holdings PLC, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® friction-grip method of wellhead engineering, known for its safety, time and cost saving capabilities, is pleased to announce that it has been awarded a Purchase Order for Plug and Abandonment ('P&A') equipment and services from Oceaneering International Services Limited ('Oceaneering'), a division of Oceaneering International Inc., a leading subsea engineering and applied technology company.
The order includes tieback and subsea well control equipment together with hydraulic controls and services. The rental equipment will be used to support Oceaneering's vessel-based P&A services for a six-operator joint campaign in the Dutch Sector of the North Sea.
This order is estimated to generate revenues of circa £500,000 for Plexus in calendar year 2023, and has the potential to lead to other similar work in the North Sea and internationally both with Oceaneering and other customers.
Commenting on the P&A Purchase Order, Plexus' CEO Ben Van Bilderbeek said:
"We are delighted to be working with Oceaneering on this North Sea project and anticipate this opportunity leading to further potential for P&A work for Plexus, especially given the sector's growth forecasts. This new order for our unique services on a multi-well campaign is a major step forward for Plexus and represents a diversification of our business into support-vessel based P&A work.
After many lean years and following the collapse and near collapse of many companies in the oil and gas services sector in 2015/16, it is reassuring to see a widely reported recovery in drilling activity and capital expenditure around the world. Encouragingly this has led to an increased level of interest in our Exact-EX exploration wellhead rental services, Centric-15 mudline hangers and our POS-GRIP "HG" production wellhead technology, for which we are positioning the company to benefit, by way of planned investment in additional inventory and increased customer engagement." ..."
https://www.lse.co.uk/rns/POS/secures-oceaneering-order-ieezou9upisxkzx.html
Well, here it goes, results just confirmed what sp was showing, full-year loss quadrupled vs previous year.
Not like situation is critical atm, but another two years like that will sink them.
very disappointing set of results
What were you expecting, Dacintakkos, based on the H1 results:?-
Revenue £1.821M. Pre-tax loss £881K.
15th Dec 2021 7:00 am RNS Interim Results
https://www.lse.co.uk/rns/OTAQ/interim-results-pjcbcd45x2fm49r.html
I was expecting full year revenue of about £4M., and it's exceeded that greatly: £4.292M.
So H2 revenue of £2.471M., which is half-on-half revenue growth of an impressive £650K.: i.e. 35.7%.
Which is an annualised, compounded growth rate of 84%.
At this rate of growth, the company would soon reach profitability.
And indeed the company has said today:-
"The Group is also expectant that the revenue forecasts will be surpassed to alleviate the uncertainty around cash resources. Indeed, following the completion of the Group's first quarter, the Group is ahead of these forecasts."
"Despite the ongoing difficulties being encountered in the Group's historically core salmon farm ADD markets, the development of new products and flourishing performance from the Offshore and Connectors divisions gives the directors confidence that the Group can return to profitable growth."
"The Group's divisions, with the exception of Aquaculture, are trading better than in previous years and there is optimism that these divisions can return the Group to an EBITDA-positive position and improve the Group's cash performance."
https://www.lse.co.uk/rns/OTAQ/final-results-7ca0iib0e0q21p3.html
Increasing revenue has always been the key to reaching profitability here, to cover fixed costs, and in addition this year's losses have higher exceptional cost, so aren't representative.
The increase in overall revenues despite the decline in ADDs revenue (which will hopefully start increasing soon anyway) bodes very well for further revenue growth going forward.
I'm a bit surprised that the directors have flagged up a fundraising already, so perhaps they're planning a 'snap' placing to put the issue to bed.
Note that they can't have a placing below the company's par/nominee value, which is 15p/share at present.
That par/nominee value can only be altered at a general meeting, which requires a few weeks notice, but I would think/hope that the company would be looking to raise at at least that s.p.
And I think that the growth story here is strong enough that existing large shareholders should wish to continue to support the company, and not overly dilute their existing shareholdings.
Trading at well below net assets, and on a price-sales ratio of well below one, this is now looking very cheap compared to peers, and very vulnerable to a takeover.
If you apply the annualised, compounded growth rate of 84% to last year's revenues of £4.292M., this would be the growth:-
Year end 31.3.23: £7.89M.
Year end 31.3.24: £14.52M.
The closest comparable UK-listed stock to OTAQ is MYX (MyCelx), which is valued at far more than OTAQ, and has found it very easy to raise funds, as has OTAQ.
In current market conditions investors are simply becoming more discerning, and rubbish companies have - rightly - found it much harder to raise funds.
Quality companies however are still raising the funds they need relatively easily.
MYX (MyCelx):-
Current market cap. £10.92M., at 47.5p.
Results for year end 31.3.21: revenue US$8.5M. (£6.97M.), pre-tax loss US$1.1M. (£0.9M.)
27th Jul 2022 7:00 am RNS Final Results
" ... The Group is also expectant that the revenue forecasts will be surpassed to alleviate the uncertainty around cash resources. Indeed, following the completion of the Group's first quarter, the Group is ahead of these forecasts. For this reason, the financial statements have been prepared on the going concern basis and I am confident the Group will complete the new financial year with improved revenue and a more robust balance sheet. ..."
https://www.lse.co.uk/rns/OTAQ/final-results-7ca0iib0e0q21p3.html
So OTAQ's Chairman Alex Hambro has expressed confidence that OTAQ will have a more robust balance sheet by the end of this financial year, i.e. by 31.3.23.
Will he, and the other directors, back up this confidence by buying shares on the market, I wonder?
They invested £75K. in the placing last December at 22p, and the s.p. is now under half of that:-
15th Dec 2021 10:30 am EQS Result of Placing
" ... The following Directors have subscribed for 340,911 Placing Shares pursuant to the Placing for an aggregate amount of approximately £75,000. ..."
https://www.lse.co.uk/rns/OTAQ/result-of-placing-c3bm4jhp9q0qqsu.html
Hedgehog100, it would certainly give a vote of confidence in the company if the directors purchase shares.
The first trade today was a purchase by me - showing as a sell - I read through the final results again at the weekend and feel the company can still get back to profit within the next financial year with their portfolio of products. I hope my confidence in the company is not wrong. The next 6 - 12 months will be interesting indeed.
Maybe they're going to wait for the fundraising and then buy shares via that, given the difficulty in buying shares on the market in a share this illiquid.
You often find in a situation like this that a fundraising is the point at which the shares take off, as it removes that element of uncertainty.
20th Jul 2021 7:00 am RNS Final Results
"... Final Results for the year ended 31 March 2021.
... 18.5% increase in revenue to GBP4.05m (FY2020: GBP3.42m) ..."
https://www.lse.co.uk/rns/OTAQ/final-results-per68letf081xak.html
15th Dec 2021 7:00 am RNS Interim Results
"... Revenues for six months to 30 September 2021 of GBP1.8m (H1 FY21: GBP2.0m) ...
The Board anticipates that revenues for the full year will be broadly in line with the full year to 31 March 2021,..."
https://www.lse.co.uk/rns/OTAQ/interim-results-pjcbcd45x2fm49r.html
So at OTAQ's interim results last December, they were expecting full year revenue of about £4.05M., i.e. about the same as last year.
Whereas they actually increased by £240K.:-
27th Jul 2022 7:00 am RNS Final Results
"Final Results for 12 months to 31 March 2022
... Group revenue for the year ended 31 March 2022 increased from £4.05 million to £4.29 million ..."
https://www.lse.co.uk/rns/OTAQ/final-results-7ca0iib0e0q21p3.html
And this despite a H1 revenues dip, and a full year decline in Aquaculture revenues of £1.1M.
If non-Aquaculture revenues can continue to grow at this rate, AND Aquaculture revenues recover, then medium term profitability looks achievable.