Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
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Have developments changed your mind about this one Velo, or do you think this is just a 'dead cat bounce'? SP movement suggests the shorters got this badly wrong again, just like Lombard and others did in 2019, but time will tell. I hope some readers (if there are any) took your comments with a pinch of salt and got on board around £15, because it has been a rapid 25% gain from there, plus a decent quarterly dividend.
If order intake is sustained into Q4 and component shortages continue to ease, this should have a lot further to go, imo, (and I'm "boring boy poster of the year").
Correction- although the case was brought in California, Comet are a Swiss company specialising in Radio Frequency and X-ray power products. It is unclear where the employees were based.
https://www.comet-group.com/
Although the $40m court loss and associated costs are probably already reflected in the share price, uncertainty remains on any future implications wrt product offerings and development
Maybe old news to some, but this article has some extra details about the case which I haven't heard from XPP or anywhere else:
https://www.jurist.org/news/2022/03/jury-awards-semiconductor-manufacturer-40m-in-trade-secrets-case-against-rival/
It appears that XPP hired employees who brought trade secrets with them from US rivals Comet. Comet originally sued the ex-employees in 2018, but subsequently dropped that action and sued XPP instead. The jury awarded $20m compensation on 2 of 4 trade secrets. The other $20m is punitive damages.
XPP are officially "considering" their next action, but it's unclear what options are available to them.
"XP Power declared a quarterly dividend of 21.0 pence per share, unchanged from a year ago."
https://www.lse.co.uk/news/XPP/xp-power-maintains-dividend-as-revenue-and-sales-grow-in-third-quarter-cp4e5fslm6lz643.html
Personal insults Velo? What an honour, but it's against the board rules and rather tiresome, so please desist, me old fruit. I have no objection to views other than my own, didn't you notice that I welcomed yours? Perhaps you just didn't read what I wrote carefully enough: it was the condescending "you lot" that I actually objected to.
The share price may actually be close to the bottom. The economy, politics and war are part of the downturn. XPP are forecast to see an upturn next year by some analysts, due to an easing of component shortages and a strong order book. If that transpires, the change in UK government and a more sustainable economic policy could provide the basis for a turning point in the trajectory of the SP. If they can put the court case behind them and return to growth, the SP could potentially recover quickly, and it has fallen a long way.
They also need to recover faith in the management. The court case was an annoying surprise because management failed to make adequate provision for it, and seemed to think it was impossible they could lose. Perhaps there is a case for clawing back their generous bonuses, which seem based on an inaccurate calculation of "success" which involved appropriating someone elses technology?
For anyone who's expecting a further divi payment, I'd like to be more precise on the jibe in my initial post about no more dividends after the year-end results are known.
And that is a dividend will be paid to holders next week, on 13th October (19p per share) but it puts into question if the merchant banks et al, will willingly issue credit loans to XPP once the full year losses are known (debt was up from £24m to £80 in the Q1 trading update. Their website is showing that debt has now breached the £100m level. What bank is going to willingly lend money to a loss-making company that wants to use that loan to pay out in non-returnable dividends?
Bound to be caveats attached to the loans, especially with rapidly rising interest rates propelling that net debt even higher than before, for the issuance of any further loans to cover debts.
I just don't think the company will be allowed to dish out freebies like dividends, do you - once the year-end result is published?
But the Oct 13th dividend is winging its way to you.
I think it'll be the last until the company returns to a profit-making enterprise, but that's just mere opinion at this stage . . . my opinion only.
Blah-blah-boringboy, the pip-squeak cry baby, who can't stand any opinion other than his own, thus rendering him incapable of original thought to answer the specific content in my post, so empty headed, he goes for the player rather than the ball.
I have one - no two questions for him:
1) Did you even know XPP was already in a loss-making position so far this year?
Well, did you?
2) Are you aware that the full trading year ending this Dec 31st will more than likely result in the current intra-year loss swamping H2 to reveal a total loss for the full year?
Number two, is a forecast of course. Forecasts can be wrong. I defy you to say that forecast won't happen
- Go on I dare you :)
Blah blah is the right name for you
- boringboy poster of the year for sure
....Yawn
PS.
Is that the full level of your Sherlock Holmes intellect on display there? Did you really, seriously, believe that no one but you alone, has noticed this forum is sparsely posted? Geezalou!
Because no-one was interested Velo, yourself included: hardly a prolific contributor here, are you? Your alarmist views on the share are more misleading than illuminating, imo, and you seem to have gone out of your way to disparage and exaggerate the situation. It is amusing that you make condescending "you lot" remarks, because if you had bothered to look even slightly, you would quickly notice that hardly anyone ever comments here. So welcome to the board!
Why weren't the half-year (H1) results mentioned on this forum, here back in early August?
(Curiously, they weren't even published on this site, under the RNS tab up above).
The earlier Q1 results that are published up above revealed a bullish increase in revenue with a great increase in orders and a brief but punchy statement from the CEO about the court case.
Debt at March was over 3 times higher than that of the year-end results!
(£24m up to £84m) but explained as a result of acquisitions. Okay then.
The last half dozen years of revenue show excellent growth including forecasts for this year and next year also increasing nicely.
Net profits in those years were similar, apart from one year in that period out of synch by being a little less v the other increasing yearly Net Profits.
Still okay.
However, the H1 trading result (which I've now obtained) shows the opposite of the increasing net profits, not a profit but a great stonking loss of minus - £33m !
(with operating profit further up initially at minus - £45m!)
Does that mean by "absorbing" the court fine it's been paid out of this year's entire net profits?
If so why not amortise it over several years to ease the burden.
No promised dividend for you lot by this year's end results then - because using the TTM method of calculation the full year ending on the 31st December is likely (but not certain) to likely come in with its first gigantic loss ever of minus - £26.5 m loss!
(You better hope that TTM estimate doesn't materialise as there are two major guru shorting screens promoting this stock as a good bet to short further).
Additionally the infamous Altman Score by a professor of finance has XXP down as potentially a bankrupt basket case within the next 2 years. (The Altman score is not to be taken too much to heart - I've studied it for years and it often misses the target completely.
My assessment (I have no holding yet in XPP) but it's a watchlist stock of mine ever since I missed out on climbing aboard for the stellar rise back in 2019 - is that the SP of this stock has not finished retracing.
PS. Two hedge funds have shorting sharks circling you under the short button up above.
(Well ostensibly 2 above 0.5% that is).
No regulatory requirement to reveal your hand if your short is less than 0.5% so there could be more; checked after finding 2 Guru screens promoting this stock as a candidate for shorting.
So why was the damaging H1 trading update never discussed on this forum here?
Court has now confirmed it's decision. XP still denies stealing the tech, but it couldn't convince the court. As Beddard said "the court case raises questions about the company’s ethics and culture " and the continued denial seems to demonstrate a culture which has not changed. The $40m hit can and is being absorbed, but the underlying problem seems to remain?
Never been the same since they put an Accountant in charge. Technological companies should never be run by numbers men with no real feel for the product and processes involved
"Administrative expenses" have gone up quite significantly... what's driving that?
Total debt has gone up significantly too.. what is a realistic figure for the full year profits, or losses?
It will take a 50% increase to return to the price pre-HY results.
An encouraging director buy but, is the confidence of the board sufficient to give retain the current share holders?
BlahBlah very sorry for the slow reply mate. Thank you kindly for helping me, I guess it will be a while before the smoke clears from the present situation, time will tell!! Its hard to make judgement in present scenario when you separate emotional attachment as could go either way. Fingers crossed it goes up!!
Hi Grippa, no, not yet paid in all probability. The latest news I'm aware of is that XPP are considering their next move. The amount of damages awarded was $40m, ongoing legal costs are £10.1m.
Extract from Sharecast news (24 March):
"Numis, which rates the stock at 'buy', said: "We believe that XP Power has the option to appeal the jury's verdict, so this case may not have reached a conclusion at this point. This morning the board of XP Power has confirmed that it will now consider its next steps, opening up the prospects that this case may carry on for sometime.
"To quantify the impact of the ruling, during FY21 XP Power incurred legal costs of £10.1m in relation to the case, and no provision in relation to the dispute had been made, reflecting management's view that their was no merit to the lawsuit. The cash outflow of the amount awarded in the ruling would take current year ND/EBITDA up to a manageable 1.5x level, so can be absorbed by the group though the reputational impact is harder to quantify at this point, though we believe this ruling does not impact the current product portfolio or orders already secured."
Could anyone please tell me has the court fine already been paid or do they still have to find the money for it? If so is there a chance of extra shares being issued to pay the fine and court case costs? Is it 60 million fine and 10.5 million for court costs?
https://www.ii.co.uk/analysis-commentary/richard-beddard-court-case-clouds-confidence-star-stock-ii523488
"Despite the court case, XP Power has a coherent strategy that addresses the risks it faces. I do not believe the verdict undermines the company’s past achievements. The strategy has been successful.
However, the court case raises questions about the company’s ethics and culture that I cannot answer with confidence."
Beddard suggests the market is wary of the implications of the case, which are uncertain with regard to future development of the disputed technology. Major personnel changes at the top add to the edginess. Could do with some good news here!
The chip shortage looks like getting worse, too, as a result of the war in Ukraine (neon supply). Reluctantly just sold my holding at a small loss. I've been in and out of XPP for years and it's a good company, so I might be back, but avoiding for now. Hope to be proved wrong!
https://www.investorschronicle.co.uk/news/2022/03/01/xp-power-dogged-by-increasing-lead-times-and-shortages/
https://www.edisongroup.com/publication/focused-on-efficiency-and-growth/30568/
https://www.edisongroup.com/edison-tv/executive-interview-xp-power-fy21-results/
Final results significantly more disappointing than the trading update suggested, with diluted EPS now revealed to be down 29% due to a huge decrease in margins. Quite a shock, as there was no previous guidance on this, AFAIK. Market certainly surprised, and the stock is now looking cheaper than it has for a long time.
The outlook arguably still looks good, with a promising successor to the retiring (in a year) Chair appointed, useful recent acquisitions, and revenue climbing. The sudden, dramatic margin issue must be a concern though: can it be shored up or does competition make it a long term problem.
Edison have upped their EPS forecast for this year as a result of the acquisition, and forecast EPS growth of 12.3% next year.
That would bring the prospective P/E ratio down to the low 20s. The market currently seems to disagree with that analysis!
https://www.edisongroup.com/de/company/xp-power/
Really want to change that second company name from "th" to "ff" ( :
Director sales are part of the picture, but perhaps more interesting, because they've proved a more accurate guide, might be the broker targets and their unanimous recommendations, stretching back almost decade:
https://www.lse.co.uk/ShareBrokerTips.asp?shareprice=XPP&share=Xp-Power
- acquired using existing debt facility
- c.150 employees based in two sites near Stuttgart and Munich.
- provides an additional European design and manufacturing centre
- expected to be earnings enhancing in 2022, will be additive to the Group’s margins
“FuG and Guth are businesses we know and admire and are an excellent fit with our existing operations, adding wholly new and highly complementary technical capabilities to our high voltage product portfolio. The Acquisition accelerates our high voltage growth strategy and expands our presence in Germany, the largest market for power solutions in Europe."
https://www.lse.co.uk/rns/XPP/acquisition-l9v3q6r2u1gpf49.html
https://www.xppowerplc.com/html/media/archive/2022/110122
Slightly disappointing last quarter, but overall a great year and company is bullish for next year, planning to increase capacity to satisfy record order book. Debt is up a bit, but so is revenue.
Q4 Dividend to be announced 1st March, expected to be at least 36p (last yr 36p)
Not really. Their record doesn't indicate any special knowledge. The only discernible pattern is that usually after they sold, the SP rose, but there's no real correlation. Nearly all of their sales are at lower prices than current.
They did cash out a lot, a while ago, at much lower prices, but that is to be expected of a successful small company, at some point the directors want to crystalise the rewards of their success and turn it into a house or something, otherwise what's the point of it all.