Member Info for Agricore

It's 13.75% yield at today's price. Why is the price so low? Let's consider the thoughts of Tickhill Tim.

> "The Real Estate world is renowned for self-promotion.These boys no exception."

I tried in vain to find any evidence of self promotion for which this world is allegedly renown. I tried looking at the CEO's profile and his social media but no self-promotion found: e.g. https://www.linkedin.com/in/stephenjohninglis/recent-activity/comments/

> "Debt is at a stupidly dangerous level."

No. LTV is at 49.5% at a fixed/hedged rate for 5 years. Covenants kick in at 60% LTV. You'd have a hard job to breach that. 3.5% fixed/hedged in my book is genius. It's actually demonstrably stupid to call it stupid.

"The only way to get it to a sensible level is to sell enough properties to achieve big numbers ,not just tinker around the edges."

> Not true. When the new build/replacement rate for offices is £200+ a square foot and RGL's portfolio is valued at just over £75/sq.ft clearly the valuation is disconnected. Moreover, EPG ratings compliance are driving a percentage of all offices out of the market (as uneconomical to upgrade). What happens when the supply of something reduces?(!) Finally, valuations relative to rentals are out of sync. Either valuations need to rise or rentals need to plummet. Based on lettings in Q2 2023 they are rising not plummeting. What happens when valuations increase? The LTV ratio drops. I'm expecting valuations to revert and we will revert to the target 40% LTV exactly by just "tinkering around the edges".

>"2Which will reduce income and therefore dividends."

Hmm, realisations (of occupied offices) do reduce rental income, but realisations are cash and can also be used for dividends.

>"It is a gamble ,with your money,"

Yes, that's how the stock market works. That's why you should take counsel, manage risk and seek fundamental value.

>" that interest rates decline and office values increase within the next 18/24 months."

Regardless of either in 24 months I'll have earned a 27.5% return (compounded it will be >30%). Before capital gains. The macros strongly suggest that RGL will not be just 48p/share, and nor will the NAV be just 73.5p/share.

>"All debt is secured apart from the £50m retail bond.Lets see if they can refinance it at less than 4.5%."

Who cares if they can't refinance this sub 4.5% in 5 years time? The way leverage works is if you borrow at less than the rate of return then borrowing enhances the overall return. If finance exceed the rate of return you reduce leverage.

So is RGL low because of self-promotion, dangerous levels, gambles and refinance fears? Nonsense. I think it's a combination of this being a/ UK b/ Small cap c/ Misconceived risk d/ General retreat of people into cash.

But I know I can't get >30% compounded in cash over 2 years. I know I can't get inflation-linked rent reviews on tangible assets. I know that track record is worth something so I'm collecting my di

TopCatz, Omnibus Paribus - a Latin speaker would think you were a Marxist. Do you maybe mean ceteris paribus?

I listed the fully diluted value but the immediate funding (if fully subscribed) is just $13.6m which equates to around 2.5 years worth of overheads at the current run rate - or less if there's expansion (for example to support the Eddie Bauer/Nautilus expansion). So, no, I don't think they are developing cameras or "scaling up production" (Hint: They don't actually produce - it's subcontracted). The SEC filing says "for general working capital purposes" - and that's what it's for. I expect a good chunk will be for inventory as it's likely they have to do "sale or return" consignment stock as part of the Eddie/Nautilus deal. .

But it's 2.5 years run rate *IF* the current cost of sale remained the same as revenue. But of course it won't - one of the things I'm expecting to see in the Quarterly update is evidence that a/ revenue is growing and b/ gross margin is starting to come through. There is to be expected some overhang from the Lucy v1.0's which were disposed of at bargain prices after the V2.0 was introduced, so it's entirely possible the gross margin isn't as good as Q2 will be - but I want to see it heading in the right direction.

GLA

Why did TEK rise 15% today? Was it LUCY? Was it something else? The question on TEKkies minds.

In my view the fundamentals were simply too cheap. Anyone with a reasonable number of brain cells can look at the component parts (LUCY, BELL, Microsalt, Guident's AI need a human's help and Guident Springs) and see that 11p was simply too cheap. Oversold to a charter, but too cheap to a value investor.

In my view the chess pieces are moving into place: Bell is funded (see my commentary on the BELL board), Lucy is getting funded, Microsalt will IPO and be funded, Guident will probably be some form of licensing and/or private sale (since AI/drones/EV are hotly contested area - see my commentary in this thread of the TAM). Beyond the "simply too cheap" these still have strong technological and commercial reasons to feel optimistic.

GLA

TEK owns 71% of Innovative Eyewear. So 5,478,187 shares out of a total 7,715,757

It is proposed to raise 7,142,857 additional shares. With 7,142,857 warrants (@$2.10)

Outstanding warrants/dilution:

● 2,464,500 shares of common stock issuable upon exercise of stock options currently outstanding, at a weighted average exercise price of $2.39 per share;

● 1,080,280 shares of common stock issuable upon exercise of our Listed Warrants, at an exercise price of $3.75 per share;

● 58,800 shares of common stock issuable upon exercise of the representative’s warrants issued to Maxim Group LLC in connection with our initial public offering, at an exercise price of $8.228 per share;

● 165,931 shares of our common stock reserved for future issuance under our 2021 Equity Incentive Plan; and

● 300,000 shares of common stock issuable upon exercise of warrants issued in April 2023 pursuant to that certain warrant exercise inducement letter agreement at an exerci300se price of $3.75 per share.

Assuming $15m raised and no warrants = 14,858,614 shares and TEK owns 36.8% of LUCY.

Assuming $30m raised (i.e. 100% of the $2.10 warrants actioned) then TEK owns 24.2%

Assuming fully diluted then $41.5m raised (i.e. 100% of the above) then TEK owns 20.7%

Going from 71.3% ownership to just 20.7% sounds terrible but then the balance sheet swells from $5.1m to $46.6m and the tangible assets per share go from $0.66/share to $1.76/share.

In the offering they describe the purpose as "We intend to use the net proceeds of this offering primarily for working capital and general purposes."

The 1 x warrant @ $2.10 provides a nice incentive for participants in this raise so I expect it will be well supported. For TEKkies while it creates a level of dilution it also speeds up the commercialisation so broadly is a welcome move.

We are just a few days away from their 10-K for the quarter ending 31/3/23 so presumably this will reveal the detail of where LUCY's Q1 progress, bearing in mind in they had the launch of LUCYD v2.0 and the new styles in play.

GLA

https://*********************/companies/uk/other/aquila-european-renewables-plc-registered/research/quoteddata/aquila-european-renewables-sunny-days-are-here-again/21_13a6c90e-ca52-488f-a9fc-53af114ed20b

some interesting elements with a positive read across for tent:

-> 30% rise in nav as assets have become operational (tent has substantial 90mwh of bess assets which go operational next year h2 2024) at cost are worth £45m, so once operational 10%-30% more so to put that in context the increase is equivalent to 2-6 years of current annual dividend payments.

-> asset lives have been extended (assumed 30 years extended to 40 years) - an extended life would lead to fair value increases in the same happens for tent's assets.

-> interestingly hydro has no finite life and many facilities have been running for 50+ years

-> future power prices are expected to remain elevated and to gently decline until around 2031 and then should rise gently to 2050

-> consideration being given by aeri to further closing discount through buy backs after spending £20m -> pro rata that's equivalent to tent buying back £7m which if it did would lift nav/share by around 4%-5% (i.e. increase returns by 50% compared to history)

last year's results for tent came out the 24th june 2022 so we should see an update very soon!

gla

Of course if I am right about the anomalous cash flow, and margins have shifted favourably to reduce FY2023 COGS from £109.7m to £100.7m, then this feeds straight through to adj. EBITDA. Given that ED on the 18th April predicted an out turn of £15.6m adj.EBITDA for FY2023, while the RNS 17th April suggests AT LEAST £19.3m, that suggest's ED's model of applying a 35% increase of costs appears simply wrong. It would be reasonable to think this margin improvement could feed into FY2024. If it did a pro rata £9m saving in FY2023 grows to around £10m in FY2024:

With the Cherry on top of £3.8m other income for T-juice IP sale to LVP we could be looking at adj. EBITDA FY2024 of £18.5m adj EBITDA+£10m even more adjusted+£3.8m cherry = £32.3m

Putting SUP of a forward PE of 3.7 and earnings per share of 27p. Even with the reduced dividend policy of 25% that's 6.7p or 6.5% yield at today's market price.

We'll know for sure in around 2 weeks when full year results are out.

GLA

Bull, I think I found your arguments further down. Considering your points 1-5:

1. Completely agree on doubling to look at run rate for FY2024. My calcs are £150m+ less £64.6m H1 = £85.4m+ H2 revenue. So run rate of £170.8m+

I've further analysed the H1 & H2 vaping which is disclosed in the update. £75m-£31.8m H1 = £43m H2 vaping revenue.

So this is a 35% increase H1->H2 following a 47% increase H2 FY2022 -> H1 FY2023.

Extrapolating forward given the news from continued UK gov't support, success in the marketplace with new flavours and combinations, as well as the agreement with La Vape (LVP) worth £2.5m+ I find it very hard to agree with ED's paltry 7.5% growth in FY2024. Very hard. But in the interests of prudence let's say the growth is "only" half of what we saw in H2 (i.e. half of 35%). £43mx2+17.5% £101m and GM of £38m to arrive at (Lighting £5.9m, Wellness £2.6m, Battery £4.3m, HH £0.9m) = £51.7m GM or a post Op-Ex adjusted EBITDA of £18.5m. So bull, our models are are broadly in agreement.(but see the Cherry below)

2. COGS & Op Ex - in my view FY2024 will be a tale of two halves. The move happens in a week. There'll be a few months of settling in. So FY2024 H1 will be impacted both in double costs and in settling in. FY2024 H2 we will see a marked improvement via synergies and capacity. ED predict +£6.5m for FY2024 and an improvement in adjusted EBITDA margin of 0.5% (10.1% to 10.6%). Given that SUP are laser-focused on cost control it would've been nice to see a forecast for FY2024 H1 and another for H2 because this extra cost feels "extraordinary" and as you say due to short-term factors. But see point 4 below.

3. D&A - disagree, you can't 'exceptionalise', you do have to following accountancy rules to amortise over the expected lifetime.

4. My interpretation is cash is neutral to debt as at 31/3/23. As at 30/09/22 it was cash £5.4m and "borrows" (as Suzanne puts it) at £18.3m so net = -£12.9m. So yes £12.9m of cash flow. But by debt they aren't including deferred & contingent consideration which is £5m. So a broker showing £3.4m suggests 1/3 of the deferred has also been paid (i.e. cash flow must actually be £14.3m for the 6 month period). Considering that operational cash flow was £4.8m in H1 FY2023 a more than doubling of cash flow suggests "AT LEAST" £150m of revenue for FY2023 might be a little conservative (and therefore a run rate of £170m would be too). Or more likely COGS is lower by around £9m and gross margins are higher than forecast. (Admin costs tend to be fixed). Interesting that COGS was £46.5m in H1 and ED think it will be £63.2 in H2 FY2023? They've multiplied H1's COGS by 35% (by av.revenue) but cash flow suggests that COGS is too high.

5. Interest costs 2024 and 2025 - covered this with your A,B,C,

Cherry on top? There's £3.8m other income for T-juice IP sale to LVP which will be recognised in FY2024. So adj. EBITDA FY2024 I estimate at £18.5m+£3.8m = £22.3m

Bull,

I've been worked through your points A, B and C on why you think SUP has "poor guiding":

A: When you say "see my arguments here and on another bulletin board" could you elaborate on what your arguments are?! If you've posted something to another bulletin board and don't want to retype it, I encourage you to investigate a useful function called copy and another called paste.

B: Interest Cost Forecasts: Looking at ED's brokers note they forecast zero for interest paid for FY23 H2 and for FY24. When you say "brokers haven't cut interest cost forecasts" - what cut to zero were you expecting? That doesn't make any sense?

C: Amortisation - I'm looking at Equity Development's forecast published 17th April and the £0.5m adjustment is there in their numbers. You mention 2 brokers who don't do this, but don't include who these are. The only 2 brokers who appear to be following (according to Research Tree) are ED as above and Hybridian who provide copy and paste the RNS analysis - i.e. no analysis. Again I can't see any factual basis that amortisation isn't being considered.

I do believe SUP has a bright future ahead but I am struggling to follow your logic, Bull.

Reading back on Shore Capital and Hannam & Partner broker notes I see they have IX on a target price of 120p (putting this on a discount to TP of 90%).... or a 10 bagger.

According to the 2017 accounts the discount to NAV back then was 32%.

https://www.oceanwilsons.bm/sites/ocean-wilson/files/ocean-wilson/result-presentation/ocean-wilsons-interim-2017.pdf

@Extrader - thanks for your posts, and the story from 2018 looks quite different - that it was Wilson Sons considering a disposal of some assets rather than Ocean Wilsons considering a disposal/sale of Wilson Sons. 2023's possibilities to unlock value seem more substantial and the assets have grown in value in those 5 years too.

I notice that today's price for PORT3 (Wilson Sons) has jumped to R$12.92. Even so, the Brazilian market isn't pricing in any likelihood to the R$19.90-R$25.60 .... yet. And OCN's price has moved proportionately even less for the week. Clearly the local market understands the value of the asset more than the UK or Bermuda does (which is a good sign for hidden value).

Also great news for anyone wanting to get on board the Ocean Wilson's Liner.

Trotsky, even before IFRS9 (i.e. before 2014) one would have accounted for the current liabilities (i.e.

Https://zeenews.india.com/video/news/london-tech-week-uk-s-saietta-to-make-entry-into-india-s-ev-segment-soon-electric-vehicle-auto-zee-news-english-2622042.html

Boyg,

Whatever you do don't read Dowgate's analyst update today which concludes: "We continue to see very considerable potential for Belluscura, particularly as the DISCOV-R gains traction".

It includes further positivity revealing new nuggets like "The DISCOV-R is expected to be eligible for both stationary and portable Medicare reimbursement which makes it very attractive to Durable Medical Equipment rental suppliers, while the anticipated higher retail price makes each unit potentially 250% more profitable for Belluscura than an XPLOR."

I wish your narrative good fortune in the wars to come.

GLA

Mulder,

>>and US markets fall

DEC is not listed in the US!

>>recession arrives

MIT Professor Paul Samuelson’s famous quipped “the stock market has predicted nine out of the last five recessions”.

But let's imagine what you appear to fear comes to pass. DEC is based in the US. It sells product in the US. Even at rock bottom gas prices (like now) DEC is insulated 8 years ahead. Its business model is risk adverse to sacrifice profits in years of high gas prices by hedging for bad times (like a recession?!). So when the price crashes it is insulated.

Apart from price there's volume. Even then I find it inconceivable that demand for gas will precipitously drop even if there's eventually a recession. DEC's primary product is natural gas. There is a strong macro due to the ongoing US coal to gas substitution. Moreover US LNG exports are growing dramatically too.

Cost control and operational efficiency? DEC have a proven capability to achieve synergy and control costs. Achieved cost savings in 2022 even during inflationary times.

So where will be SP be? If you'd understood my prior posting I don't think you would ask your question!

GLA

I think if someone who simply looks at the 31/12/22 accounts and uses simplistic financial ratios to determine DEC's financial health needs to consider the following:

1. The volatility of the hedge - especially that relating to the "current liability". Natural has more than halved since 31/12/22. The hedge liability therefore is either wholly or substantially removed. In fact at $2.50mmbtu the $293m liability will have swung to a CURRENT ASSET in the range of $100m-$150m

2. Cash generation. There is substantial cash generation so there will be careful cash management planning.

3. Line of credit. There is (substantial) headroom in current facilities - which were renewed (reconfirmed) by the consortia recently.

4. So taking account for the above as at 31/5/23 the current assets to liabilities gap is somewhere around $100m. Cash generation of around $35m/month FCF has covered that by 31/3/23. The CA:CL ratio is above 1 at present, in my estimation.

If Mulder doesn't know the importance of *INTERPRETING* those metrics then he should not be investing either.

GLA

Regarding cash - plus they have headroom based on £60m undrawn borrowings.

Regarding downward valuations - the 3rd, 4th, 5th largest are revealed:

"Ledger" - crypto, so tarred by the crypto winter and FTX going bust, there's an element of timing there and post March has seen recovery into this space.

"Aiven" - don't really have a comment there.

"Primary Bid" - not surprised!! But the concept of PB is sound and once the IPO and secondary funding recommence then Primary Bid is surely a disruptive force both in the sense that it broadens participation with PIs, is less costly than broker fundraises, and so a great holding, marked down for the short term.

Annual Report:

https://investors.moltenventures.com/storage/uploads/PLC/Results-and-Reports/Molten%20Ventures%20plc%20Annual%20Report%20FY23_nclrh.pdf

This new presentation is worth a read too:

https://investors.moltenventures.com/storage/uploads/PLC/Results-and-Reports/Molten%20Ventures%20plc%20Annual%20Report%20Presentation%20FY23_nirwf.pdf

GLA

>>unfathomable is more like it and god knows what the recent placees are thinking!

Well, yes, let's consider some of the placees.

Robert Fary possibly thought hurrah I'm now a Director and subscribed £8k.

Bob Rauker CEO possibly thought I've already got 955,684 shares worth £240k tied up in BELL. I've worked my socks off to make this a success and know this is going to be a great success and subscribed a further £20k.

Adam Reynolds Chairman of BELL possibly thought I've got 1,728,176 shares worth £420k and if Bob's investing then I'll match him. I also think BELL going to be a great success and invested a further £20k.

Finally non-exec Director David Poutney possibly thought nice one lads. I'm wealthier and got a good chunk of change already invested in BELL (more than the lot of you) and I already own 10.1% of BELL (12,455,731 shares worth £3.1m). I've lost millions with the share price drop the past 12 months. But as a non-exec I've got an inside view of the sales and manufacturing so I'm going to commit a further ***£450k*** of my own money.

Bearing in mind that David is "Chief Executive of Dowgate Capital Limited. Previously he was Head of Corporate Broking at Numis Securities Limited and Numis Corporation Plc, where he was an Executive Director until he stood down in February 2016. He started his career in commercial banking before becoming a number one ranked financials analyst at a number of leading firms including BZW, James Capel and UBS." (https://www.belluscura.com/corporate-governance/board-of-directors/)

Is this the kind of person who'll toss nearly half a million without careful analysis?

Sometimes people are so caught up moaning about today's share price and the "astonishing" lack of updates that they fail to see the very update that insiders are signalling a very positive future for BELL.

GLA

Couple of things I've noticed from a 1st read through:

1. The "loss" is based on a reduction in the multiples used in valuations. i.e. it's not based on a company X and Y going bust..... the loss is based on cautious perspective not adverse events.

2. Graphcore - is about 1/3 of the reduction. This is an AI play. Post period (post 31/3) interest in AI has exploded, so that reduction I take with a pinch of salt. This appears to be the only deeptech holding with a reduction.

3. Similarly Revolut about 1/6 of the reduction. Revolut is profitable and cash generative. It's an exciting holding. Molten has achieved a MOIC of 7.5X even after this reduction. Again pinch of salt.

4. Cash requirements estimated £20m. Plus interesting opportunities in the market. Against that there £23m cash plus £13m realised post period (i.e. liquidity appears ok but tight)

5. Even accepting the reduction as fact it's also a fact that this is still on an enormous discount to a revised and updated NAV.

GLA

NAV has grown to 75p share. So at today's share price is at 85% discount. Absolutely nuts!

They've taken a "Deferred Tax" hit which appears in the P&L for 2022 but in reality will only apply in the future once investments are sold.

What impressed me was the MOIC 2017-2022 (the multiple of invested capital) - how much they've managed to grow the NAV before this was listed. The answer is an average of 7.3x. (or 730%) See:

https://ixnetzero.com/wp-content/uploads/ix-Net-Zero-Admission-Document-1.pdf

Interesting too there's put options over Suniva Inc worth $6.8m. Given the inflation reduction this option could be very valuable. See: https://en.wikipedia.org/wiki/Suniva

There's zero valuation to that asset in the books. Just an interesting footnote in the accounts.

Managed to top up at 37.2p a share which I’m very pleased with. 6.4p per annum translates to a 15.5% yield. My earlier holding is at 42.2p so has a 15% yield