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Found it impossible to join Zoom meeting - were we meant to have been supplied with an ID? Tried to contact Hardman but they don't seem to have a phone number!
Why on earth did they send out their report today just ahead of the proposed meeting rather than a day before?
As regards the report very little that is of any real help as to the production problems and whether they have been permanently solved. I am now wondering what the company had to say at the meeting about the issues. It is still not clear whether the main furnace issues are in Stage 3 or Stage 4. The website refers to 'furnace' at Stage 4 but all the earlier stuff was about relining the graphite which would suggest Stage 3 albeit is not described by them as a furnace. Perhaps it is problems with both? Hopeless communications with shareholders.
Poole, the session was recorded and so will be available to view, though there wasn't the granularity of detail on the question you're asking. I thought on the whole it was good. Without wishing to get personal, Isabelle Maddock is a very different creature to Michael Cunningham. More expansive and reassuring a presence. October sales were reported as £1m. There was some candour that whilst customers aren't happy with the ramp up issues, it is such a commitment to select a supplier and integrate it in the first place that withdrawing from agreed contracts is really not an option. It's the follow-on contracts that will be telling and you'd hope that if they can permanently resolve capacity issues, the quality of the product will encourage them to do so. There was also a vague scent of contrition and self-awareness. There was little to no recognition (although I suppose how could they really) that the financing story they are telling with the current fundraise is the same story they told with the previous (40p) fundraise and then promptly burnt through that cash.
I felt that Isabel (CFO) came across well which was comforting.
There was some (albeit only a little ) acknowledgment of over promising but under delivering. The situation is regrettable but taking ownership of the problem is a very good starting point for putting it right.
I’m glad of the explanation of having identified 7 pieces of equipment that are posing a potential risk to future production, and that each has been assessed as to the various options to mitigate that risk, including overproduction to create a buffer, and more specific planned maintenance. An update on this would seem particularly appropriate in the weeks ahead, since this was central to the bottleneck problems mentioned.
It was stated that the future is bright, that the OEMs are supportive and that quality exceeds expectations which is clearly positive, but it’s a missed opportunity not to have made more of both what has been achieved and what’s still to look forward to…in order to close the presentation in a more positive manner.
Underwhelming presentation for me: overall thoughts
1. No contrition, just slightest hint of apology from Bundred for the disastrous f+++ ups of last 12-18mnths. Quite surreal
2. Neither Bundred or Johnson seemed that bothered by events that have cratered the sp by 60pc, destroyed balance sheet & led to an emergency fund raise....
3. Board change desperately needed to show they mean business - Bundred must go!
4. CFO appears a steadier pair of hands., but I was unimpressed by her answers - a fair amount of hot air, and quite unforensic approach to unpacking (1) what she found on arrival (2) what went wrong & why things will improve
5. CFO seems quite confident about signing commercial loan which she pointed out was EU backed and gave them a fair degrees of flexibility over when it gets drawn down (has to be w/i 2 years of signing)
5. Lacklustre presentation that only increases my view that SCE lacks the management, money and skill sets to go it alone independently and that the only viable option will involve a takeover by PE or an industry player.
Individual points:
1. Focus seems to have shifted to 2025. With Johnson saying new business not a prioirity given their focus is fixing current clients etc, it sounds like s/holders will be treading water in 2024, as I can see no catalysts for rerating. Disappointing if true
2. Extraordinarily , there was no admission of the lousy way they handled the announcements. Didnt answer why interims Sept signed off by board then lead to emergency fund raising 5 weeks later! Clear there were questions about this but Bundred wouldnt answer them! That is a huge issue as its all about TRUST
3. Johnson fitness as CEO remains major issue.... evidenced by bizarre answer to legitimate question about why they overpromised and underdelivered rather than other way round. Johnson's response was worrying imo: he indicated that they has got themselves into a corner by dint of their first prioirity being to their customers who needed to be assred SCE could meet their demands & deadlines. Effectively he seemed to be saying that " We told the customers what they wanted to hear because they are our most important stakeholder and we didnt want to disappoint, so that's why we got ourselves into position of overpromising to the market."
A very troubling answer as it shows he does not understand about the relationship between company and its owners (the shareholders) and his responsibility to his owners in terms of providing credible forecasts that crucially decide the share price and hence the value of the company.
Thanks Fevertreeman - the last part would also seriously concern me if I was a client. The trust is lost, and you cannot rely on SCE to deliver.............so it doesn't get the relationship off on the right foot if you can't deliver what you initially promise. Credibility is lost and becomes very hard to regain. I will hold off for the foreseeable until there are tangible improvements visible. I expect it will tread water for the next 12 months
Very much my take too...... CFO and COO critical to regaining credibility. The presentation by Johnson was extraordinarily poor for a CEO fighting for his company's future. When asked by s/o about management bench strength, he was hopeless. We need granularity on the issues and all we got was "We hired new CFO and COO (why they didnt get one before is beyond me) and then some guff about broadening training and 4 managers being promoted/repurposed/
Fevertreeman
yes....... Taking on the expansion plans, the order commitments and pushing forward on the R&D and doing it without an experienced COO in place to help with the work load was indeed creating a real risk that potential problems would be missed .... and they were...turning managing the process into ..firefighting the process
"identified 7 pieces of equipment that are posing a potential risk to future production"
Jeez ! I was interested and I didn't attend but 7 ffs that's too many fires to fight for me for a company that has already been shown to be inefficient !
"identified 7 pieces of equipment that are posing a potential risk to future production"
is that the new COO at work ?
.... "potential risk" .... shows they are looking in more detail and assessing what could be done, before a problem arises ..
"potential risk" is a lower level than a "real risk "
who knows? but it says something that (1) these are potential risks and (2) one doesn't know if that includes the **** kit that had already broken down in qs 1,2,3