George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
The Board must act. They can't pretend that the current mess is down to external factors - 1/3 of value of company wiped out due to factors within the management team's control i.e. financial forecasting, operational excellence etc. Did Bundred & Johnson really NOT KNOW the situation 4 weeks ago when they confidently told shareholders tthings weer stabilising? Bundred must resign or be asked by the SID to step down and a new chair appointed who will grip this mess
Awareness to sell if you missed the RNS
Nothing we didn’t already know, but the publicity from appearing in the (short three paragraph) Daily Mail Saturday stock watch is certainly going to raise awareness
Very much agree with a number of the comments made here in recent days. This remains of great potential on a truly long term view (10 years +) IF we can get there. But the Board have damaged their credibility enormously over the past year or so. The H1 financials were hugely disappointing and it was a leap of faith to say the least to imagine that they would get anywhere near the original forecast but of course there was confidence, even adamance, that they would do so. I can deal with manufacturing challenges, that's to be expected to some degree. But the disingenuous communications and what therefore feels like U-turns is completely unacceptable. I have always had mixed feelings about Bundred's style. In Q&As he is perfectly civil but swats away reasonable questions from shareholders as though they are irritations. It is of modest comfort to know that he is in the same boat as many of us. I remain in for the long term (through intention but also now necessity).
Totally agree with your comments. However, there needs to be much more done here:
- first, the Board needs to instigate urgently a thorough review of what went wrong: messaging, financial forecasting, operations management, and staff oversight and training. And they need to do this AT PACE because shareholders need answers!
- second, Easton needs to drastically overhaul the operational team and find out how they Johson & the Board could have signed off on this portion of the 1H results statement on Sept 29th:
"Our operating loss (before non-recurring items) was £4.6 million compared to £2.4 million in the same period last year. This is due to a number of ramp-up issues we experienced as our production capacity increased to meet growing demand. These ramp-up issues resulted in lost contribution of £1.6m and costs of £0.9m with equipment failures and scrapped production. We have overcome these technical challenges and do not expect these outlays to re-occur. Indeed, the work completed has resulted in improved production processes and the design of proprietary equipment."
-third, heads must roll. Bundred should resign as chairman and be replaced by s/o who actually challenges Johnson and isn't in love with the product. And we given the international nature of customer base; high time we had European or US NED
-fourth: they need to overhaul their approach to IR & communications. today's announcement shows the level of reporting shambles within the company. Absolutely no proper oversight/understanding of any key function : financial forecasting (over to you Isabelle), shareholder management (over to you Isabelle), operations (over to you Easton).
- fifth, the Chair & Johnson should get on the bloody phone and apologise to their advisers/ & equity analysts whom they have comprehensively hung out to dry
-sixth: urgent discussions over working capital - they need to get on with it.
Absolutely time now that Bundred stepped down. Absolutely clear that Johnson and Bundred have hung us out to dry yert again by the continued inability to do the basics well.....frankly staggering that Johnson has the effrontery to make his comments as if its bloody obvious there are going to be problems. Absolute shambles of a management team that (1) has misled their shareholders (I mean ffs at what opint did they realise they couldnt make their own bloody numbers, numbers which they had assured us all were achievable)
This has been on my watch list too, but I have kept on the sidelines....mainly because scaling up is always a big challenge and it is hard to do it without some problems along the way....the scaling up was always going to need more working capital at some point, IMO.
Johnson works hard and is committed , but he has had to wear too many hats and appointing Stephen Easton in May, but not getting him started until September added to the problem...with Johnson not as experienced with the complexities of manufacturing processes.Johnson needed the room to stand back and see things more from a distance, instead of what has turned out to be a period of fire fighting to get problems resolved ... something that has proved expensive in terms of fixing the problems that they did not foresee ..although they must have learned a lot from it all, including to realise the furnace design wasn't good enough
Easton looks like the right man for the job and has skill,experience and leadership experience ....but he came in too late unfortunately ..they needed that COO much earlier
" the Company will have sufficient cash to continue its extensive three year capital expenditure programme and working capital required as sales increase through the year.".
That was back in April.... today things tell a different story....
Despite all this, they do now look to have a team in place to move things along....but Johnson needs to step back and manage from more of a distance now that Easton is in place..
They shall raise the necessary cash soon You bet ! Could still be a good buying opportunity or top up chance below 18p. Might have to be quick though. Here is the summary from mid Oct. from a chat posting. .......................
Superb news - a '' £100m '' contract win from OEM10, "one of the world's largest automotive OEMs".
There's many a slip 'twixt the cup and the lip....or something like that.
Given the share price slippage today's news was predictable for those with a cynical outlook.
Nevertheless, with many years of know-how and experience now in terms of perfecting the product, a huge order pipeline, only one competitor globally, and an increasing need for their products, SCE remain in an enviable position.
For newbies and those looking to top up this is an ideal oportunity imo.
Let's hope the cap.ex facility is successfully concluded with at worst a small-ish fundraising and/or other financing for working capital. If the OEMs are as keen on SCE's products as they appear to be, then surely they should be prepared to finance the incredibly small sums (by their standards) necessary at a few % above base rate were SCE to approach them.
Yeah agreed. This share has been on my watchlist for a while but I have held off because it’s always challenging scaling up a business, particularly at the pace they’re looking to. And some people may be out of their depth.
Feel sorry for shareholders enduring this pain but it looks like it’s going to get worse before it gets better (if it even does). I will continue to watch and monitor but it’s not an enticing prospect to invest in atm
How to finance the working capital is the question left hanging but I think we all know what that means. Longer term this could fly but short term pain.
Agreed. This lot are out of their depth and lack the financial resources.
About time this business was sold to someone with the resources to accelerate the capex programme.
Nowadays this is always leaky on the news, the update explains the recent fall. £8.5 m is well short of the £13m expected for year end.
Looks to be more short term pain for the shareholders....
It was always the risk when they moved from a well worked batch processing method that they initially proposed to the current production line one.
The thing is James a contracted and prospective order book totalling £710 million with a 60% gross margin points to a company that will be multiples of its current valuation in the near future. A takeover now would be like selling fifty pound notes for a fiver.
" then I'm afraid we have never looked more vulnerable to a bid."
From a share holder point of view, is the above possibility not a good thing? (ie SP must go up). Or am I missing something?
Not great either way. We have world class tech with a big moat (currently) ; operate in a global duoploy; market trends are in our favour; we have a very large order book with some of the world's largest & most exacting OEMs......and yet. the company is struggling with concerns over financing and operational competencies....
If s/o , be it private equity or a global automotive supplier wants to buy a plug-in-and-play niche global tech business geared to very large global markets, then I'm afraid we have never looked more vulnerable to a bid.
The question is have SCE been able to ramp up production this quarter ? If so debt funding or a small equity raise should be no problem or not required at all.
If not and there are still production issues then 15p is likely to come into view quickly.
Patience is wearing thin among a pretty loyal investor base. If they raise, then Bundred has to step down, as he has consistently over-egged the pudding & doesnt appear to have had a close enough oversight on Johnson.
If you were OEM 10, you would want to know before awarding the 100m contract that ST was confident of financing its expansion. Therefore Johnson et al must have had to present detailed funding arrangements to them. The question I'd ask is what is it that they said on the finances that gave OEM 10 confidence to pull the trigger, notwithstanding the fact that the contract kicks in down the road?
Reputationally, another lowball equity raise will not only effectively destroy the share price leaving ST highly vulnerable to a takeover. It will also destroy Bundred, Johnson, & the new CFO's reputation. The markets are largely not to blame for the share price being where it is - the blame lies squarely with Bundred and Johnson and the board for their inept handling of things. Let's hope that message has finally got through !!!!
I think we will see another fund raise. A big reason why companies float is to raise money. AIM is in many ways a vehicle for this sole purpose.
If they don't raise this way then it has to be another. Why would they choose to increase debt if they don't have to.
The caveats to this are significant though. The last raise was a shock and killed the sp. The sp is so low now that, even if they could generate enough interest at 25p, the markets know that the sp will fall and be 15p in a matter of days. This begs the question as to whether a raise is viable.
It's a big question this and one that has to be well answered for the sp to move forward. The company will.move forward the sp is different.
you make a substantive point. in the past, both the chairman & johnson pooh-poohed queries about the robustness and rigor of the manufacturing process when pressed but as we know they fell flat on their face with the process issues, and we as s/holders have ended up paying for it as they threw several millions at trying to rectify the problems. so if teh oems are satisifued johnson would do well to explain the owners of teh company, what it is that has given oems comfort to award another 100m contract. really not helpful that he cant be more granular about this!
frankly, it has been a relief to get a proper coo on board and a new cfo. however, it is crystal clear that trust has been damaged, and that concerns remain about (1) depth of operational management skills (2) ability to expand & scale up production without more ****-ups (3) capability to produce at run rate needed to satisfy customer base w/o **** ups (4) quality control- again something that one of their recent rns mentioned as an issue
(5) finances: all very well trumpeting an 100m euro order if the cash is running out......shareholders were upset by the nature & timing of the last raise, they will be doubly furious if johnson & bundred pass the cap round again, having
used up a portion of the last fund raise to resolve operational issues of their own making.
I think the sp here is now driven by issues relating to financing the expansion plans (and the poor market conditions). The manufacturing issues are not that surprising and, we believe, are resolved.
On this forum there is plenty of discussion about order book and new capacity building plans. The share price however will be nowhere near where it ought to be until it is clear that the present manufacturing process is under control and able to produce at its intended output without lots of poor quality or wastage at the same time. I need some convincing that they now have a process that if scaled -up the new equipment will be reliable. If they don't then how do they know with lead times what equipment to order? For me the reports on getting on top of manufacturing issues have been vague - and insufficient in relation to what is needed to provide assurances. I have noted that they suggest that customers are sufficiently assured as to progress on some of these matters. Is it not overdue that shareholders were also similarly kept in touch?
Https://thebrakereport.com/porsche-911-upgrade-surface-transforms-braking-kit/
"Porsche 911 Upgrade: Surface Transforms’ Braking Kit
The Brake ReportThe Brake Report
October 31, 2023
Surface Transforms has announced the launch of its new Porsche 911, 992 GT3 RS Steel Brake Disc Upgrade Kits. This state-of-the-art upgrade promises to bring unparalleled braking performance to the iconic Porsche model.
Why It Matters
Braking systems are the lifeline of high-performance vehicles, especially those in the caliber of the Porsche 911. With this upgrade, Surface Transforms aims to redefine the braking experience, emphasizing precision, control, and unmatched braking power.
Key Points
Direct Fit: The Steel Replacement Kits are designed for a seamless fit without the need for any modifications to the vehicle.
Precision Crafted: Every component boasts superior engineering and precision, ensuring optimum performance.
Consistency & Reliability: These kits guarantee a reliable braking performance that’s consistent, whether on a race track or an open road.
Enhanced Features: Customers can expect the same robustness, durability, and enhanced thermal management that they’ve come to associate with Surface Transforms.
Bottom Line
Surface Transforms, as one of the few companies globally specializing in carbon-ceramic brake discs, utilizes unique Carbon Ceramic Technology. Unlike competitors using discontinuous chopped carbon fibre, Surface Transforms employs continuous carbon fibre in a 3D matrix. This results in a stronger, more durable product with enhanced heat conductivity—leading to superior braking performance. Their technology not only guarantees reduced braking system temperatures but also offers benefits like weight savings of up to 70%, extended product lifespan, consistent performance, minimized brake pad dust, and corrosion resistance.
For those eager to upgrade their Porsche 911’s braking performance, pre-orders are now open. Visit Surface Transforms’ website for further details."