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It's good to see the level of confidence in SCE's Open Offer. £27m raised, versus £20m they were aiming for.
https://www.lse.co.uk/rns/SCE/result-of-open-offer-05tqj6w00zhm7lt.html
I have a modest holding, and a 1:12 subscription didn't net me many more shares, so I applied for quite a few more and got them all.
The Offer shares go live on 19th December, so I'd expect the share price to remain sluggish until after Christmas as PIs cash in their 5-10%, but after that (fingers crossed, touch wood, sage the room, avoiding ladders, black cats and cracks in the pavement) the share price should rise significantly from 10p over the next 12 months.
It was only July that 4 board members put in a hefty chunk of their own money, buying shares on the open market at an avg of 32p.
It's interesting to note that the share price has remained higher than the Offer price even as the Institutional shares have gone live, suggesting that they aren't being flipped significantly.
£27m raised.Chairman & CEO responsible for operational/financial debacle. What could possibly go wrong?
So...the whole fund raise will collectively add 110.3m shares and be a 35.5% dilution with 90.3m shares still to go live after the AGM
" We continue to expect to move into profitability and free cash generation in 2024."
"The Company does not currently anticipate requiring any further external funding for future expansion up to Phase 3"
The production capacity must be functioning 100% as planned if they are indeed going to be able to fully fund Phase 3 from cash generation (the combined revenue capability of the existing and extended Knowsley footprint will be £150 million p.a.)
" the share price has remained higher than the Offer price even as the Institutional shares have gone live"
Only 18.6m and 1.35m shares have gone live so far....the bulk ...62.9m and 27.4m have yet to hit the market ( post AGM)
Surely... SURELY, 2023 will be in line with guidance issued on 3 Nov of £8.6m sales. If not, the Board are continuing to tell us one story whilst conscious of another. I'm taking it as read, perhaps foolishly, that there will be very little variation from that.
Therefore, the critical moment becomes the first 2024 trading update., where we need to see largely problem-free sales of £1m+ per month. If the first few months of production are materially behind the run-rate for 2024 full year guidance, then my confidence in this management team will be eroded. In the meantime, I'm prepared to give them the benefit of the doubt.
" problem-free sales of £1m+ per month "
DamayHill
They have stated.... if this can remain on course ...and the production faults be resolved ..then £1m+ per month seems more than possible
" The Company remains on course to have capacity equivalent to £50m sales per year run rate in 2024 and for £75m sales run rate in 2025"
Thanks pokerchips. Unfortunately, there's a world of difference between having the capacity equivalent to £50m sales per year and actually delivering product at volume, as we've seen this year. October sales were apparently £1m, so they need to demonstrate a gradual ramp-up during H1 2024 and certainly not a further reversal.
DamayHill
The thought has to be that they have learned a lot from the issues of 2023 and that with a new experienced COO added to the team things can indeed look better from now on , in terms of the production.... and of course sorting the funding requirement puts to bed the work needed for that...
The loan decision appears to be "imminent" and I would guess is waiting for the AGM to pass the Resolutions so the fund raise is fully voted on ...
You haven’t a clue what you’re talking about.
Your post nails why there needs to be boardroom change and soon before Johnson et al burn through all this new discounted funding sorting out yet more issues. Precious little faith in Johnson's CEO capabilities to drive this business to consistent performance and profitability over the long term. Lets hope there is some proper strategic discussions about the management's competence taking place around the board. Johnson and Bundred cannot afford yet another operational disappointment
Considering the Open Offer was way oversubscribed.....it now looks even more disappointing that the main man ..the CEO...only took £15k worth of shares in the Placing ....
You said it! And one non executive director refused to take any!