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Hi Dicky
Surely if a tyre manufacturers tyres work better run longer etc. they will be able to either charge a premium price for them or sell at a similar price to the competition and sell many more tyres either way they will have a better business at least until competitors pick up graphene as well.
Lucky O: Please explain what is meant by "Better Rolling Resistance". Thank You. ----- Yours, Max.
One of those factors is the tyres' rolling resistance. Tyre rolling resistance is the energy that your vehicle needs to send to your tyres to maintain movement at a consistent speed over a surface. In other words, it is the effort required to keep a tyre rolling.
Explanation off google Max, it improves the lifetime of the tyre basically and mpg or less energy used in an EV to maintain momentum.
No doubt that Graphene is a fantastic new material with a huge range of potential uses.
Plenty of companies in sector trying to commercialise but progress in terms of revenue looks slow to me.
In VRS case at present the small Graphene sales volumes that are occurring are at a negative gross margin so a long way to go in terms of a real commercial opportunity.
IMO Neill should use strong share price to acquire some of the smaller players like Haydale to get more scale and cut out duplicate AIM and Board costs plus lab costs.
The numpties (and especially one individual) on the other Board seem to be in the Kevin Costner 'Field of Dreams' build it and they will come mentality rather than appreciating that this is a developing area where NO-ONE is selling anything in any large quantities. They also seem to forget that VRS will only receive orders when the collaboration partners (in most cases though not all) receive orders from their customers eg AECOM need to get an order for arches before VRS will get one for Polygrene - the one obvious exception (to me at least) at the moment is potentially the Oil & Gas company in the US, though again even this may require an end customer order.
They also made great play - with thanks to the doomsters at Shorter Central (aka *************) - that VRS only sold ca £27k of Graphene in FY to 31/03/19 what they ignored was the self same accounts showing some inter-company transactions and also a significant build up in Finished Goods inventory (from ca £34k to ca £220k) which to me suggests that this is anticipation of future orders and also that the sales figure may not include inter-group transactions (we know for instance that AAC were used to produce the AECOM Masterbatch and have also made graphene enhanced sample products for other customers).
My final thought on the Sales figure relates to another point that gets brought up - which is apparently low R&D expenses - perhaps as part of the various collaborations, in order for VRS to gain access to / some level of ownership of any resulting IP, they 'invest' in the collaboration by providing the Graphene without being 'paid' for it (I'm not an accountant so I don't know how this would show in the books, perhaps it's already there as the R&D expenses) and so the Sales figure is artificially low???
You could argue that if they don't build it they definitely won't come fatherelmer, they do need proof of the ability to produce to required quantities before they will don't they?
Your take on the accounts looks more honest and do wonder if 'finished goods' , although that could relate to anything, will be Airbus, O&G and CPI related as they are all ongoing and there was a bit of a buzz around concrete but have absolutely no idea what that relates to?
They have said that they don't give it away which I hope is true as it doesn't make good business sense otherwise. Trouble is with figures that they can be skewed any way they like (shorters). I'm not an accountant either lol, but the shorters base their negativity on the accounts ignoring that fact that it is a growth company and Chris Leighs confidence in managing the finances is being undermined although there is a podcast with him that tells exactly what the situation is .
I do agree that proof of production capability is required - but a 700% increase in Finished Goods would seem a strange way of proving it IMHO, and would also go against Chris Leigh's (CFO) reputed parsimonious nature. Therefore, I would posit that this was more likely in anticipation of sales, though admittedly the subsequent Interims weren't exactly helpful here....
Bloody impossible to know unless you are the auditor I suppose, there must be a reason but what it is only the company will be aware.
No amount of good ideas on this board will do any wonders for the share price as it drifts lower. The only news that will reverse the drift is a substantial order, substantial revenue increase or a major taking a stake in the company. For the present time it makes sense to spread the risk. I am very much aware how much the big stakeholders will react but, my attitude is , it is better to be safe than sorry.
Not sure that is a fair adjective of Chris's nature, (parsimonious) so not sure where it comes from.
VRS are a small team that work closely together and decision make together from my contact with them.
Think that may be typical of all small companies trying to grow ABLE.?
Fatherelmer
There was no inventory in Cambridge Graphene at 2019 year and whilst it’s true that 2D Tech finished goods were up as you say massively overall I inventory increased from £40,502 to £226,513 so the numbers are not exactly huge in context of VRS market cap of over £100 million.
VRS is trading on a multiple of over 3,500 times Graphene sales which are currently loss making.
One for the brave IMHO
Tinopener, I just meant that Chris is careful with the cash and so to make such an investment in inventory must be for good reason (and probably with a high degree of quick expected payback).
Theanalyser, if you believe the other board then First Graphene (FGR) is the leader of the pack yet in their last set of accounts their sales were only ca £12k and they made a loss of ca £4m (figures to 30th June 2019).
Another outfit that is beloved on the other board is Nanoexplore (GRA.V) which posts very impressive sales numbers - ca. £30m - however they too are loss making (ca. £3m) and if you read the detail you'll see that they were actually taken over by a Graphite miner in 2015 and have then subsequently been on a major acquisition spree buying up 3 composite manufacturing companies and its these that actually provide all their sales. They also make a very big thing about mainly / initially targeting the Carbon Black Market which is very different to what VRS are focusing upon.
Final one from me re the competition - XG Sciences (XGS) - which in the 9 months to 30th September 2019 had sales of ca. £1m and a loss of ca. £6m, from reading the reports this comes mainly from Graphenes above FLG as they are still working out how to manufacture FLG, so again a (slightly) different market to VRS.
XGS have been trying for bloody years and still haven't cracked it. Doesn't or shouldn't make any difference people calling it down either and bearing in mind XGS the real value in VRS is the IP at present and will be with the future commercial products which the focus is on at the moment. China knows!
AECOM in the news today: linked with a new start-up called Magway based in Wembley (Having a kick about ?) ----- Yours, Max.
Two more from me to complete the picture....
Talga Resources - basically a Graphite miner with negligible sales (ca. £4k) and a huge loss of ca. £6m
Finally DirectaPlus (DCTA) a pure play Graphene company with ca. £1.8m of sales (mainly textiles related) at a loss of ca. £3.5m
So as you can see Graphene is still very much a developing industry, in the (very) early stages of commercialisation and very much pre-profit. Therefore anyone expecting anything different, or using traditional valuation approaches, is an idiot.
As for the so called 'prophets' they would have much more credibility if they did an industry wide comparison, and review, rather than just attacking individual entities, but then that would be serious research and journalism, something I doubt they understand, let alone are capable of.
fatherelmer I find your article sobering in your analysis as you are not decrying the company and like a horse race the fences have to be jumped before winning can be considered. Probably at a very difficult time market wise, the company is facing a uphill struggle trying to gain traction and I would suggest the conditions they face are similar to those faced by I.T.M POWER. It may be of interest to learn that the current C.E.O changed I.T.M Power's fortunes by researching the various grants that were available. If Versarien is following a similar strategy then all they can do is to grind things out. At least since inception they have managed to make some progress and the only way we can make sensible judgements is by studying the reports coming from the company or maybe news media outlets.
Some rather bold opinions of other people in your last post father...
Certainly not out to win freinds by looks of it?
Anyway, back to Graphene. Possibly the biggest threat to VRS at present are those companies making claims on products when those companies do not have ISO approval.
Graphene failure to meet expectations, could hold back VRS for a while?
Tinopener, no one (not even VRS) have ISO approval as the standards and characterisation methods have yet to be fully documented, and then standards testing bodies approved.
Having said all that VRS are probably closest due having had some level of confirmatory testing done by the NPL (who have published some initial British standards) as part of the Verified Producer Programme run by the Graphene Council. Until there are a single, common, set of standards, and some form of legal / regulatory requirement for testing / proof, its still the wild west and easy to belittle all claims.
Tinopener, as for bold opinions and not winning friends, I'm just saying it as I perceive it, doesn't mean I am any more right / wrong than anyone else.
Terrance Barkan wasn't happy with the belittling fatherelmer and the troll quickly retracted their attack. The 'blind' testing would be a nervewracking time for any company having samples taken from the 'normal' production process. Don't know why other companies haven't applied for the under ten layer confirmation.
True enough, however, I stand by what I said until there is a common, mandatory, test there will be a lot of differing opinions / claims. I also believe VRS have gone some way to proving their quality by having undergone the Verified Graphene Producer scheme, but until we can see who else has tried and succeeded / failed, the issue over who has what standard of Graphene will not go away - after all aren't there lot's of academic papers (eg by University of Singapore) that said lot's of companies claim to produce Graphene but upon testing few were found to actually do so.
There is also an argument, that can be made, that as different types of Graphene, have different properties dependant very much upon how they are used (functionalised) that even such tests will not demonstrate very much and that tests upon the functionalised product are actually more important (than layers and lateral size) as the users will only be happy if their needs are met / exceeded. Ultimately all that the Verified Producer Programme does is demonstrate that you produce what you say you do (which is a good thing as it removes one major area of risk) it does not, however, talk about the benefits you will / may get from functionalising the product (only testing by the users can do this - or sharing of testing already done by others).