Mello presentation notes18 Nov 2019 10:42
I thought the presentation went well and reflected the team's confidence going forward.
It was great to hear that no more funding is needed to get to £17m per annum revenues.
The potential contract pipeline is greater than £50m per annum. £50m would represent 100,000 discs (Brembo produce 200,000). The £10m to build each new production cell would have a mere 18 months' payback.
The build-out plan could deliver another 30%-40% cost reduction per disc.
GrahamITY has also summarised elsewhere as follows:
"there were about 15-18 in the room ( they were competing with Gervais in the main room). From the questions would say less than half were shareholders ( so a few people seeing them for the first time ?). They also had a stand in a very prominent position, so people could see their disc ( and try to lift a steel disc by way of comparison).
Good presentation. They have been asked whether the CMD and MELLO appearance etc are just the warm up for another fundraise. They made it very clear that, for the existing contracts announced, and for existing plans, they have all the funds they need to get through to profitability and cash neutral, and no current intention to raise any more. Kevin does of course point out that a new mega contract ( heaven forbid) might change that, but that any future fundraiser would be AFTER any new contract, when volumes were known.......and hopefully done at a much higher price.
I think they are surprised ( and disappointed) that the three game changing RNS in the summer have not had a bit more of an impact on the valuation. They have converted OEM5, a household name, into a contract, and the further business from Aston mArtin, OEM1 and OEM6 all show that the product is getting adopted across a range of top rank OEMs. The forecasts only reflect existing, signed contracts, so there is nothing in the price, or the forecasts, for any upside. They can see their way to profits and the market does not seem to have reacted. IMHO they just have to stick to their knitting, keep the profile reasonably high ( with regular, say quarterly presentations) and the share price will look after itself."