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Started: Moneymule888, 14 Jun 2024 08:56
Last post: DamayHill, 14 Jun 2024 14:12
This is 80% about execution of a complex manufacturing process at scale and 20% about much better forecasting and expectation management. They can be forgiven for the former - this stuff is hard. The latter is much harder to forgive - they have been naive in the extreme, disingenuous and lacked humility at key moments (Bundred in particular).
The lower end of their guidance HAS to hold weight. That revised guidance was their 'coming clean' communication and the market will have little to no tolerance for anything less.
The next Trading Update is due early July (which will be mid-year). They've said £4M revenue for Q2 and said it as recently as when we were already well into Q2 so it absolutely must be £4M. If it's not, I'd suggest things could get pretty ugly as it would be an immediate let-down on a final chance.
Thank you Damay.
I know a few manufactures, more in the vehicle space, who also encountered many issues in achieving scale (cost control). The key is to have the right people in place and hopefully they learn from their mistakes. There can’t be too many more chances. You’d think with the money committed by Liverpool council and the importance of the business to the region and potentially country, they would use this as a serious steep learning curve.
Does their lower end revenue guidance still hold any weight? I see they did the raise after announcing this range.
Any news when we have another update?
To answer your original question moneymule, SCE was valued at around £70M-£80M market cap two or three years ago and that was prior to quite a high proportion of the £390M contracts being announced. Self evidently, there is a very high level of empirical risk built into the SP and MC based on management's inability to manufacture at required scale to date and therefore the cash burn and multiple raises that have decimated the holdings of LTH's such as myself. If - and it remains a big if - they can deliver to the sorts of metrics in the latest presentation then market cap should easily get back up to those sorts of levels but it might take 24 months of solid, issue-free delivery for confidence to be restored to that degree, I would suggest.
£70M market cap would be c.5.5p SP. In reality, without the problems of the last two years and bearing in mind some of the larger contracts have been announced during that time, plus the prospect of more contracts to come, this already ought to be £100M market cap. But as I say, there remain high levels of risk built in. I personally decided to increase my % shareholding via the recent open offer but I had also previously participated at 40p, 10p and also prices a little above 40p so I've been hurt by this. Others, as you can see from Fevertree's ongoing anger, wouldn't part with another penny and I respect that.
New to this stock. What do we think the valuation could be if the lower range of revenue is hit this year?
The business seems awfully cheap given how much they’ve just raised!
Started: dreamchase, 14 Jun 2024 11:13
Last post: Moneymule888, 14 Jun 2024 13:35
Did you mean a strong case for cash for the business?
So they’ve raised when they didn’t need to?
The presentation is the reason why there is such anger toward Bundred, Holly Johnson, and Haddocks. All of them failed to make a strong cash for the business,, failed to acknowledge their absolute hand in the napalming if the share price, and in Johnson's case mumbled about being "too optimistic".....The only one of the team with any shred of credibility left is Easton.
Anyone invested here should have already watched the recent presentation which deals with all the issues you seem to be concerned about, especially worth listening to Stephen Easton the COO. Also, stick around for the Q&A.
https://youtu.be/n7ICmNGjGhg?si=v0JwLdL4Q3yKOS01
This is a problem for many small businesses who try to produce and make profit.
Hopefully they use the cash for some high quality recruitment as this really is their last hurrah to be raising at 1p (of course they probably can raise more at massive dilution).
They need to now prove to the market that they can fulfil on scale this wonderful product and meet orders
I too am new to the share. The issue appears to be fulfilling the orders due to incompetence and/or poor processes leading to very high scrappage rate.
Would like to hear this is being addresses.
Started: Goldwater, 14 Jun 2024 07:43
Last post: Goldwater, 14 Jun 2024 07:43
To reduce scrap the following must be look into.
1 Material
2 Method
3 Machine
4 Man
You got to look at these 4 with kaizen.
Which is 5 s.
1 Sort out 2 Set in order 3 Standardize 4 shine and last one is Sustain.
Md have to walk the factory everyday and speak to the operators and the Toilet cleaner How the these can be improved.
Not just the managers who are lazy and bullying the shop floor worker.
Other than manufacturing machine all the other thing can be improved by doing these things.
Started: Bethany1, 12 Jun 2024 09:47
Last post: Fevertreeman, 13 Jun 2024 18:25
And as regards the share raise, it points to a craven board, very poor advisory team, and a CFO who is clearly bitterly regretting joining as she is up to her neck in it now and probably desperately casting around for a new gig.
Scrappage rates were absolutely a key KPI...Johnson and Bundred effectively misled the market by not revealing that for every disc they were producing last year they were having to scrap another one..this is absolutely central to the investment case and a reason why Johnson has to be moved away from CEO role, as he cannot be trusted
Couldnt agree more...reasons
1. Arrogant and incompetent chair (and pretty useless board who were so far off the ball in terms of asking the right questions and being on top of the issues that they might have well been on another planet)
2. Out of his depth CEO, who doesn't understand financial markets, lacks the operating management skills, dispalys huge antipathy to outsiders esp his own shareholders, and exhibits extraordinary levels of paranoia around transparency
3. The fact that they raised at 1p speaks of the sheer level of chaos, panic, and unworldliness that Johnson has sat atop. No wonder the previous CEO jumped ship!
Thanks 30. To say it has been rough is an understatement! But it is what it is.
You're right that the fundamentals have not really changed much since the raise, which is why it was too low (because SCE got itself into a position to raise money when it was in a very weak position). But the £20m market cap is completely disassociated from the quality of the product, the quality of the customer base, the potential scale of the market etc. If SCE grabs even a 1/3 share of it (and it should) the money to be made is huge.
The problem, as you indicate, is about delivering/ manufacturing. I've been invested for years and knew the scale up would be a huge challenge. Perhaps I underestimated it. Perhaps details like the scappage rates were not revealed when they should have been. The company has also made many self-inflicted wounds such as delay in appointing a professional operations director and terrible financial forecasting.
But there is still optimism out there. Who wouldn't want to see this succeed (apart from Brembo!)?
Thanks Guitar - sounds rough and I agree this is definitely a shining example of what not to do (having raised money myself I know for sure I'd have done a better job).
I was asking more about why it was rising again, given that the fundamentals (notwithstanding the recent presentation about the improvements in production) haven't changed much, and yet the price is now over double the most recent placing, valuing a loss making business at more than £20m based on an order book that they still haven't confirmed that they can actually deliver.
I'm holding off until I hear more about then actually having solved the problems, and for me that'll come when they announce cash flow positive on a regular monthly / quarterly basis.
Last post: USER84, 12 Jun 2024 21:07
Poor shamy lad
Jesus what happened here? This was on my
Wish list at 50p I think
Hope you loaded up shamy lad
'Value' is how much someone will pay for something son.
Placing shares are being dumped onto private investors for a nice 60/70%.
Started: Goldwater, 5 Jun 2024 11:30
Last post: Bridgedogg1, 5 Jun 2024 11:48
I hope we get a full post period update with the final results. Too many orders with not enough capacity isnt the worst problem to have, ramp up of operations should be progressing fairly well.
This will triple Once scrape is reduced.
Started: EOTB1958, 5 Jun 2024 10:18
Last post: EOTB1958, 5 Jun 2024 10:18
This company has full order books and now hopefully getting its act together. It has the funding and has the customers. Of course DYOR
Started: Bridgedogg1, 3 Jun 2024 12:43
Last post: Bridgedogg1, 4 Jun 2024 07:59
Breach 2p today hopefully
Lots of interesting news hitting the markets today but SCE just slowly steadily climbing back up.
My exact thoughts. Plenty of people working on the shop floor with friends that could be buying. They will have a bead on how the ramp up is going. The orders are there so revenue is only constrained by how much we can produce.
Looking lively again. Speculating, but I wonder if there’s upbeat gossip leaking from within concerning improvements to production issues?
Thank you
Odds are this week, tomorrow or Wednesday would be my guess.
Yes, well done!
Night will follow day tonight as well!
Tell ya ma'!
Was there not a placing son?
Good boy.
Any more brave predictions? "Theres going to be a placing!"
I am here my son, as they say rest is history.....
Where are you son?
such a sage when predicting a placing.
no where to be seen when theres a quid to be made.
textbook
Started: Bridgedogg1, 30 May 2024 11:04
Last post: Pharmhall, 31 May 2024 15:33
I've traced back for past 12 months and cannot find Cantor's on the register before. I think it must have come in on the deeply discounted Placing and then the updates are further buying, or their clients taking up the O
Pharmhall
Was Cantor a previous large holder? The first TR1 states they went from 0% to 12% on 23rd so I assumed they were new shareholder ? but I see the reductions were due to the additional shares not selling.
Ticking back up quite nicely now!! Should see 1.8-1.9 today! Hugely undervalued here
Worth a punt so am in here
Looks good for a big re rate
Last post: Deeogi, 31 May 2024 14:47
Re-rate
Started: Bridgedogg1, 28 May 2024 07:09
Last post: Bridgedogg1, 28 May 2024 13:11
People need to remember there is no blueprint for what we are doing. This is in house tech and the scaling up of the manufacturing is inevitably going to come with some trial and error.
Unless Johnson has had a "Come to transparency " moment, I fear that he will continue to 'manage' (laughable he is CEO) on a need to know basis, which in investors case as we have found out, means that information has to dragged out of the poltroon
Equally, the former biggest holder was ex Baillie Gifford. The 800lb gorilla in the corner here isn't the tech, the customers, the order book, it is the management team , led by Johnson who seems totally at sea when it comes to running a listed company, accompanied by a CFO who committed £3,500 to the raise. Johnson isn't CEO material, as shareholders who have been on board over last 18-22 months will attest. And the CFO doesnt show any confidence in the management otherwise why the paltry commitment - £3500 - to the raise. The key appointment will be new chairman. I'm hoping it is an exec chair, as leaving Holly in charge risks a repeat of the last 18 months.
...and that's confirmation that all open offer and placing shares have now been added. I cant yet see my allocation on IG though.
As the dust settles a nice operational update would be welcome.
We've got a new significant holder: kave sigaroudinia > 3%
An Investment manager at baillie gifford - UK Equities Head of Research
Clear sign of how undervalued this at the moment.
Started: bocasefarm, 28 May 2024 11:53
Last post: KenilworthRd, 28 May 2024 12:04
My open offer shares on HL are the same? Purchase price showing and no daily movement on the price
Bridgedogg: I am with IG too. My allocation of 411K shares is showing as confirmed on the mobile app (trades) though nothing on the main PC platform. Still showing the cost. I thought trading was meant to commence today?
Started: SWLC, 23 May 2024 16:01
Last post: KenilworthRd, 24 May 2024 18:25
I'm in it for the long term, next week could be very interesting? If it drops low enough I might even add a few more!
Very large spread, 1.2125 to sell and 1.285 to buy, MM may have big orders to fill and we will find out after close then.
Started: Bridgedogg1, 24 May 2024 07:13
Last post: Bridgedogg1, 24 May 2024 16:16
And back up. Its been a very successful day as far as I can see. Huge churn, plenty of buying, a sign of things to come. Much fewer shares to be added on the open offer and I wont be selling mine.
Huge £101k delayed sell from 8.43am and price still holding, lots of churn going on
Sizeable trades going through on both sides and 6% up. Maybe the churn will not be as painful as the naysayers hoped/predicted.
Probably choppy until the quick-gain flippers exit once the new shares enter trading on 28th May, but this will be the bottom.
Unless Bundred develops new ways to snatch defeat from the jaws of victory!
This is an almighty recovery play, cash in bank and order book overflowing. Choppy waters for a couple of sessions then back up we go.
Last post: Pokerchips, 24 May 2024 10:12
Nov 2023 : " The Company does not currently anticipate requiring any further external funding for future expansion up to Phase 3 but will explore non-equity options in the first instance should any further external funding be required."
May 2024 : - Placings etc for 950 MILLION new shares .. an increase in total shares now of 370%
wow .....they really know how to screw their investor base ....
"Unless Bundred develops new ways to snatch defeat from the jaws of victory!"
never underestimate the skill of an AIM BoD when it comes to snatching defeat from the jaws of victory. they are to commercial success what politicians are to honesty.
Or more pertinently what i am to successful investing :(
Started: 2reincarnated, 23 May 2024 15:17
Last post: Bridgedogg1, 23 May 2024 20:29
2re
Completely agree, unfortunately for you this already went sub 1p, some of us even got a little bite. Don’t worry it’s still a bargain.
I don't even know what that's meant to mean..
Obviously a different business to HE1 but they have hamstrung themselves in the same way by under performing forcing them into a heavily discounted placing. I will buy in here when it gets to 1p and wait for the rebound which could be explosive as with HE1, with a little good news.
Psychiatrist on the way!!!
I've let them know on Helium One BB that you have likened Surface Transforms to Helium One and they are going to get you one as soon as possible!!
YES this will come good but it is not going from here to where HE 1 did without going sub 1p.
Quite a few large orders were actually sells, that is why the price keeps dropping. I reckon they are selling their holdings after they have been confirmed their subscribed open offer shares.
All the large trades are buys 🤷♂️
Strange to drop after what was positive news. Guess it’s the fear of new shares coming online. I don’t think there will be much selling from the conditional placing shares, open offer shares are another matter. All going to plan, an operations update would be nice. This is sure to motor onwards and upwards.
Agree - the set up here is remarkably similar to HE1 a few months ago after their disastrous placing but the rest is history after that.
I'll wait a few days for the dust to settle but anything close to 1p should be a decent bet for a strong recovery
I bet by the looks of it a fair few shareholders were not happy in using a cashbox placing JersyCo and Zeus set up
Started: Bridgedogg1, 20 May 2024 08:47
Last post: Bridgedogg1, 23 May 2024 12:00
Depends what you value the company at. Current £10m mcap vs building up to £75m revenue. Adding 5p on that basis shouldn't be a problem.
Looks like the book build buyers are managing to sell for a very quick and healthy profit
I see the shares in issue hasn't been updated here , which makes the MCAP look distorted
Once all the shares are issued I suspect it will be harder to push the SP up at any great speed ..given that every 1p increase will add £10m to the MCAP
Interesting buy there.
23-May-24 09:23:14 1.64 3,319,000 Unknown* 1.50 1.60 54.43k
I’m with you-this is a ridiculously cheap stock
Looking good. This should go vertical at some point, all depends on the level of flipping. At the moment there seems to be no selling appetite. Once cash is in the bank, more shares in the market, higher volumes of buying and selling, inevitable churn. Should see some very big sessions.
If the very little selling continues then all bets are off
Started: Candlestick, 21 May 2024 07:21
Last post: Candlestick, 21 May 2024 07:21
I’ve set up a TG group, check it out via X
https://x.com/candlesticks18/status/1792801997638533326?s=46&t=ipW7IMp6GVgCsYSTs_Wd3g
Started: rivaldo, 20 May 2024 14:59
Last post: rivaldo, 20 May 2024 14:59
Nice mention in the weekend's FT in an article by James Henderson, "co-manager of the Henderson Opportunities Trust, Lowland Investment Company and Law Debenture":
Https://www.ft.com/content/331e610d-f633-4e36-b30b-d6c3a45bb705
"Surface Transforms has potential. It has just raised an extra £6mn to build a new facility to increase production of ceramic brake discs, which are much more effective than traditional brakes in slowing luxury electric vehicles with their heavy batteries. The company has suffered a string of mishaps and seen its share price annihilated in the past year. The hope is that it has turned a corner. It has a great product if it can manage its scale up. At just over 1p, its shares have the potential to accelerate rapidly from here."
Started: KenilworthRd, 15 May 2024 08:53
Last post: Bridgedogg1, 17 May 2024 09:37
Personally Im going to add more once it breaks out of the current range. and hits 1.3p then similar to you i will reduce between 3p and 5p, keeping some for much longer term.
Thanks BD - I'm fairly comfortable I understand what's holding the production and sales back now, and I'll be holding this for at least a couple of years, although if it got to 5p within a relatively short period I'd look to cash out a chunk, then leave the rest to ride.
My broker seems to be allowing an unlimited amount of over subscription shares. I assume any not taken up get allocated on a pro rata basis so I put in a fair amount and hope for the best? Seems to be a no brainer.
Good post Bridge!
If you want minimal risk I'd say wait until late June and reassess once the open offer has cleared and the inevitable churn is done. You may miss the boat but then you can just go elsewhere. Even getting in at 2p woul dbe a good confirmation buy that this is heading in the right direction. It could drop down to below 1p or it could steadily rise to 5p. Holding now is a risk BUT if you are holding for the long term then that risk is much reduced IMO. Looking ahead to £75m annual sales in the relatively not to distant future then 10p isnt an unreasonable target, and i think its a good upside for a potential 15-20% decline in the short term. I don't claim to know what will happen but I have a lot in here and am fairly comfortable with that.
and BD is fine, people have called me worse
Started: Bridgedogg1, 12 May 2024 17:39
Last post: 30silver, 14 May 2024 13:54
Well that's weird - the Video just dropped on the RNS...
Hey @andypa - I don't see it on the ST website, Hardman & Co website or on YouTube yet - perhaps it's still in editing before they release it? How long did it take for the previous ones to get uploaded? The November video was uploaded on 29th November which was a week after the research note, this time around the Research Note was uploaded on 9th May, so perhaps we're looking at Thursday 16th?
Does anyone have a link to the latest presentation? Thanks
Looking at the Q1 sales figures you can see where this is going.
"Sales in the first quarter were £3.0m.....Sales in March 2024 were £1.5m."
So considering sale have risen every quarter for at-least the least 6 quarters we can assume/hope sales are at least £1.5m / month and growing since March. If it were to stay at £1.5m per month that would gives us the lower £17m sales target for 2024, which I am sure is where they got the figures from - they are obviously giving the lower end of the range for everything at this stage and I think this target as well as others will easily be beaten, by quite a margin.
Started: kyoung3759, 10 May 2024 14:40
Last post: Bridgedogg1, 10 May 2024 18:29
Want to see a big ruse from this. Funding sorted, operational issues getting sorted, order book full- massively undervalued. Let’s get this up to where it should be with the risks/issues built in - 5p - and then rise into double figures as the risks/issues are resolved.
Agreed - he's clearly got a grip on what the issues are - time will tell how effectively the team can sort them out.
I thought the Chairman was a liability, as others have said, he was straying into "financial / investment advice" territory, and I'd wager that if their Nomad was in the room he'd have been getting a good solid kick under the table. You just cannot say that as a board member of a listed PLC, I know he prefaced it with "I'm going to answer this as a shareholder, not as the Chairman" - sorry, you're not allowed to do that. What was the other one, "we've got loads of problems but raising cash for capex isn't one" - really? No wonder he's being put out to pasture.
Impressed by Steve yesterday but definitely not the Chairman Blundred. No real acceptance that he presided over a very operationally poorly run organisation to even get to this point. I sense this newer team and hopefully a far more insightful Chairman will hit their targets and if so the fundamentals are good for a solid ongoing business. Market leading product, high order book (I am amazed a few customers haven't walked away) and hopefully a more efficient operational performance
Started: Guitarsolo, 10 May 2024 09:14
Last post: perkylad, 10 May 2024 12:31
Yep it's on Interactive Investor, final decision date is 20/05. Think i'm going to take mine up, might as well, its only small beer to the amount i'm out. Here's hoping that its not 'scrap' money! ;)
I think you have until 17th. Call your brokers and they should be able to link it up to your account.
Morning All, has anyone received any communication yet from the platforms about the open offer? I hold SCE through HSBC Invest Direct, Hargreaves Lansdown and AJ Bell. So far only AJ Bell have any mention of it and only to say "it is coming".
I fear HSBC in particular will either not allow me to participate in the open offer (they didn't one one of the offers I recall) or, as I am often travelling and the timeframe is tight, it will happen while I am away.
Do we know the final date yet when we will need to subscribe to the open offer/ excess application.
GS (been royally shafted by the 40p/ 10p/ 1p placements)