Member Info for Agricore

To put some colour on what a "small decline" means and given that there's not the customary summary box in the RNS showing NAV per share in £ and in $, I've done the maths.

So the NAV per share dropped from $14.58 Q3 to $14.52 in Q4. However the $/£ rate means the NAV per share in GBP dropped from Q3's £13.08 to £11.71 in Q4.

A 10% drop in GBP terms isn't a small decline but is explainable by Q3 being flattered by the Trussonomics crisis and Q4 reverts to where the pound is back to $1.24/£1.

The "bigger picture" also referred to in my mind is the Inflation Reduction Act in the USA. The effect this will have on Goodleap and all the others as it begins to kick in during 2023 and then for 10 years will be a huge tailwind for the decarbonisation portfolio. There's absolutely no reflection of this in the price. In fact the discount to December's NAV in GBP terms is 47.4%!! Another factor is the buy backs. In 2022 RSE bought back 8% of its shares. If this happens again in 2023 then a further 8% bought back (4m shares) would lift the NAV from $14.52 to $15.50.

On the basis that this should be at no more than 20% discount, the target price is £12.40, or double today's share price.

GLA

Whether it's the new web site, the sigh of relief from a quarter point hike or something else LUCY is powering today up 10.5% until market close and a further 7% in the after market. Showing as $1.64. Go LUCY!

GLA

Inadvertently, CHRY have provided the NAV as at 30/01/23. If you look at the announcement of NAV 128.26p for 31st December and notice the NAV valuation at the bottom of the RNS drops by £9m. So NAV drops from £763.3m to £754.3m.

This translates to a NAV per share of 126.74p for 30/1/23.

The portfolio updates look impressive for Starling, WeFox, BrandTech and even Klarna. The penetration of BNPL into the USA is extremely low so a rise of 92% is actually only the beginning of US market growth which has a long runway of I think 5 years to catch up on Australia and Europe levels of BNPL penetration. It's true that a more cautious approach to underwriting is required, and BNPL legislation will introduce red tape, however it also improves Klarna's moat against other new entrants and my own esoteric experience is that I see Klarna far more often on ecommerce sites than I see Afterpay (Block) or even Paypal.

So the discount to NAV is eroding from silly levels through a combo of share price reversion but also kitchen sinking any bad news. The mark to market approach and FX have reduced NAV but both of these factors will reverse (in my opinion) during 2023. GBP/USD will almost certainly weaken (on the Big Mac Index the economist reckons sterling is 30-35% overvalued) and Jupiter sackcloth approach to valuation leaves room for uplift once the IPO market opens.... we are now 5 quarters into what is usually a 6-7 quarter drought spell so late 2023 an IPO of Starling, Klarna or WeFox are all possible.

GLA

It's early days on this but "yet more upside" on top of the 2 existing DLE sites...... in 3-4 months we'll have a better grasp of the value here...... However the key phrase to take from today's RNS is this sentence:
"a private Chilean company with licences immediately west of CleanTech Lithium´s project has reported an NI43-101 compliant resource of 1.2 million tonnes of Lithium Carbonate Equivalent ("LCE") at an average grade of 956ppm Li (peak grade of 3,560ppm Li) based on an evaporite deposit."

In other words *if* the resistivity signals correlate to a brine find and if it's a similar grade/quantity to the above find immediately to the west of Llamara then the value is 1.5x that of Laguna Verde.... the current TP of 280p moves to over 500p-800p.

I think given GM's $650m equity announcement of Thacker Pass and "more to come" and Tesla's ongoing discussion over Sonora the Lithium sector seems strangely, eerily, overlooked by the markets.... Very happy to hold here and look forward to the Llamara updates in Q2.

GLA

https://www.investorschronicle.co.uk/news/2023/01/31/where-renewable-energy-trusts-are-investing
Comment from Investors Chronicle on TENT:
"Some names will offer bigger yields and wider discounts, albeit that’s sometimes because recent performance has suffered: Triple Point Energy Transition (TENT), which launched in 2020, has landed investors with a paper loss of nearly 19 per cent in the year to 27 January, offering some explanation for a 7.5 per cent yield and a discount of more than 28 per cent."

The annoying thing is the article suggests that TENT is loss making when it is not. What the article says (badly in my view) is that the share price is down 19% YOY so represents a juicy 7.5% versus a 5.3% yield from Greencoat which the author seems to tout as a better alternative on the basis of wholesale price exposure (TENT has 50% exposure). In other words quite lazily written, in my view.

TRIG's and Greencoat's wind exposure is seen as a great thing. But BESS, Hydroelectric, Energy Efficiency, CHP are all more consistent earners and are much less weather dependent. (Well, subject to drought conditions for Hydro I suppose)
As Wind Generation continues to build out I question the wisdom of wholesale price exposure. Surely you are supplying into a market during a time of feast (i.e. low prices) and unable to do so during famine (i.e. high prices) while consistent earners continue to generate earnings during famine.

The IC article only serves to validate the investment thesis here not diminish it. Yet, unless someone questions the facts as presented the danger is they overlook the opportunity here, which is a pity.

https://www.investorschronicle.co.uk/tips-ideas/2002/01/02/latest-update-companies-smashing-broker-forecasts/
IC: 31st Jan update: Saietta: EPS NTM (next 12 months) 3 months ago 0.9p; EPS NTM 1 month ago 1p; EPS NTM now 2.1p

What that means in plain English is compared to a month ago analysts/brokers have upgraded Saietta's earnings for FY2024 (i.e. April 2023 onwards) as up 105% compared to a month ago. i.e. they believe its earnings will be (substantially) higher.

2.1p on 50p is a PE of 25 which sounds high but isn't really when you look at how rapidly that PE ratio falls in FY2025 and FY2026. (Forecast EBITDA grows about 7X next year compared to the coming year)

My own reading of the numbers today together with both Singers/Cenkos' analysis and Jerry's interview on Vocks (sic) Markets today is that there's a continued pessimism to their 2023 estimates. (Albeit they both admit as such, sitting behind that lovely phrase "risk to the update").

1. Jerry reveals an optimism to China, and that Samarkand are making progress whereas in 2022 everything was in lockdown. There is still disruption in his words but immunity is growing. Remember, the Dentyl Cardiff Uni Kills Covid research is still highly relevant to the Chinese consumer. And this is a consumer who'll gladly consume Sharks for their fins, Rhinos for their horns, and Tigers for their bones...... they love a good hokey remedy story.

2. Using the 45%/55% split (of revenue and EBITDA - which has held true for a couple of years with VLG) I get their H2 as being £44m-£18.9m = £25.1m revenue for H2 2022. And adj. EBITDA £5.4m. They achieved 17% proforma growth in 2022 so while growth was higher due to restocking, and lower because of the focus of integrating the new businesses, I see 8% proforma growth in FY2023 ***WHEN THEY ARE 100% FOCUSED ON ORGANIC GROWTH*** as too pessimistic. Let's assume they only achieve what they achieved in FY2022 when they weren't focused on organic growth. 17%. So I arrive at £25.1m/55% = £45.6m x 117% = £53.4m or £2.9m ahead of the brokers. I arrive at £9.2m adj PAT, or 7p EPS.
That's 15% ahead of the brokers but in my defence I predicted the 2022 outturn better than they did if we compare my prediction to theirs. :)

3. Exceptionals. It's not to say there can't be exceptionals in 2023 but apart from some obsolete stock 3 years back I think exceptions have been integration costs. There are no plans for further acquisitions ergo no exceptions. This translates to a 25%-50% profit lift if you look at the FY2021 or FY2022 years.

4. Product Development Centre. The impact of the product development centre is not really considered in the broker forecasts. We've seen past examples of their capability with a hybrid Dentyl/Ultradex combo, but also rebranding, product innovation such as sparkly bits in your Dentyl... not my cup of tea to have Unicorn sparkly blue mouthwash.... but the kids love it. It's worth reading their "Full Service Offering" page to better understand this aspect to VLG: https://www.venture-life.com/development-manufacturing/

5. Order book 115% ahead. It's difficult to discern how much of this is restocking versus growth. But a more than doubling of order book year on year (£18.9 H1 2022 invoiced x 215%/45%x100) would equate to a £90.3m FY2023 revenue... much much more than my £53.4m estimate above!) does suggest that even a 17% proforma growth may be too conservative. Or should I be saying "there's risk to the upside"! Ha ha. There's an analyst inside every one of us.

GLA

Last year's Q4 update was on 31st Jan so hopefully we will get an update tmrw. On one hand the Truss-aster currency boost in Q3 will reverse plus we know Oil Prices are about 10% lower in Q4. On a positive, though, the backlog of maintenance should be nearing completion so 2023 should see workovers and boosts to production - all positive. Also continued interest payments will flow in, and as for real estate we are arguably now seeing market lows so we may get some interesting updates in how the LMS cash pile is going to be utilised? Having powder dry is a great opportunity to pick up some bargains.

PART 3 of 3
....we still have the classics from Aqua Mod and E-Tec in our range, but the models are only suitable for displacement engines from Repower Edin and rimdrive are all priced above from torkido from Dawa torquedo until now always our first choice since recently there is a cheap 11 kw motor from Italy from metec that could not test it yourself, you can really go up front, yes, let's go here for the weight distribution now we are here on full Speed at 10 kW and I think the colleague is now the coffee isn't even in the front so let's do a speed test now.
….and off we go full power and the torkido too young we don't leave it completely, yes and there are even two of us in the boat here, hey he goes forward at the beginning you can still hear a little bit as I said but everything is okay and the acceleration is really in ten so we are now testing how good we are here can turn in place at full lock, yes, so the engine is turned up to the stop, we can also do it on the spot turn so you don't need a rotating pot to do such a maneuver we can really look into people's kitchens so super exciting cool ones
Location
so we are now done with the test drive at Propel it was really super exciting to see the engine really blew us away completely so compared to the torqueedo it is much better we can go into the performance factors later but it was great fun thank you very much on rehearsal for the invitation if there are new engines we will be happy to come back to test again otherwise we are very curious how the pre-series model will really look like when it comes onto the market how the performance is how the volume is like I said it was a bit the engine can still be heard so in comparison with the torqueedo but the power has of course completely blown us away so thank you for watching let us know your opinion in the comments below and then yes if you have any further information just let us know call us if you have any other questions feel free to watch the next videos on the channel and leave a like and a subscription

Batteries are used and the propel is currently in testing which batteries it can be how the values have to be, we're just there let's see what comes out of it and we Of course, we will also test the propel 10 with other batteries just to see how it feels, so we'll take a look right away, let's go, we were just in the test lab at Propel, unfortunately you're not allowed to come in with us, but we've seen a small water basin where the engines are tested over time and also different batteries are permanently running and the discharge currents that can be deeply discharged the batteries are being tested, so it was super exciting to see a lot of development work being done here, also in house, really in Amsterdam, quite a lot of engineers are sitting here and building the hardware completely themselves and also programming the software with over 1300 setting options on the controller, so fine tuning is really being looked at here, how can you get the best out of the engine, the guys actually come from the automotive sector, so they are really very fond of detail, too perfectionist and build really, really high-quality Product and still at a very good price from that we are really total Impressed by the test engines and are immediately looking forward to the test drive, so we are now driving the first probable board boat to the three more floors that are here you can see the weather is really really great so for mid-November we caught the best day we could have imagined the boat is very interesting completely from the 3D printer that means everything is printed here and then the display that we show very valuable to you
Everything looks really perfectly clean. Personally, it always reminds me a bit of Apple when I see samples and also the design comparisons, so everything is super clean super modern and just makes a great Impression yes we have now arrived here in the marina with the four trial boats and although we have the propel D1 in first border tested were already super convinced but the outboard motor is of course particularly interesting for us it's just a prototype for the time being this means before series production in the next step ten more outboard motors will be produced by Propel and then a few things will be tested again more intensively already changed and as a second comparison boat we still have a 10 kW torqueedo outboard motor just to test the two against each other so super super exciting we are looking forward to the result but above all it's still the old version so only the 10 kW motor is now available with 12 kW input power so it's not what you expect from the current model but an approximate comparison value will definitely be available, so if we look at the market for 10 kW outboards, there are not that many suppliers,
PART 3 to follow

https://www.youtube.com/watch?v=ti7VoaD-IdY&t=614s
ENGLISH TRANSLATION - DON'T SHOOT GOOGLE FOR ITS TRANSLATION
Hello Johan here from Eberhutsmotoren TV
Today we are at Probel at the headquarters in Amsterdam to show you a little bit the office, the products and above all, of course, the new outboard engine with 10 kW tell you a few technical details about the engines and take you afterwards on a test drive so stay tuned let's go
So first of all let's take a look at the propel D1 inboard that we drive namely as the first super exciting housing looks very compact From the outside, of course, again very modern classic propel if you go here now look a bit here in front you have the wave of course and here in front if you look inside the engine is actually only this small part yes and in the next step everything that is further in here is then the Water cooling from the motor the controller will later be in the final version this is a pre-series model also in the motor in the same housing here the water cooling also has a 12 volt output, which means a lot has already been thought of I'm curious how the whole thing goes afterwards and next to me on the left side we also see the S1 outboard motor kW same engine like over here but as an outboard also a pre-series model that is.
The model was already presented at Metz in 2021 trade was presented now another the dimensions are slightly changed bit bigger needs above a bit more interior space the bracket has been completely changed so you're right again added that is currently not the case functional as it should have been the cooling was not changed the is in here in the shaft we always have I brought such a shaft and the water cooling if you imagine it cut open like this, the cold water flows up to the controller and to the motor and the warm water then goes back down into the motor, so super exciting that means permanent even for long periods of use great to use at high temperatures yes, everything was thought of and we are also with the model of course excited to see how the same does in the test drive alone Hear say we expect a lot but whether that really that good is that we will of course see right away and otherwise for Both models propel now also have their own batteries or they are of course still in the development stage, which means you need at least four of these packs here, which you can then connect and you can only start with four and then add more depending on the range, of course you want to have one for a 10 kW outboard motor you should actually have 10 kilowatt hours with you yes depending on the desired range no problem there is a solution for everyone and of course you don't have to use the sample batteries, but others can.

PART 2 to follow....

2 comments on other recent comments:
1/ FUNDING RED HERRING courtesy of PManuel "There's going to be a raise of £22.1m according to Canaccord Genuity" was said. ***WRONG!*** There *WAS* a raise in August 2022 of £22.1m and I presume PManuel has muddled things because August 22 falls under the FY2023 financial year. So thought because the £22m appears in FY23 that means "in the future". It doesn't. I wasted time going through the last 10 Canaccord Broker notes to be sure. Reviewing the cash flow forecasts from Canaccord I do not believe there are any plans for further fundraising - nor any need.

2/ Steebo's German Torqeedo vs Propel auf Deutsche.... my German is quite poor so I extracted a transcript and then used a translation tool to confirm what I believed they were saying. The 3 key things I took: a/ It's "like Apple Technology" b/ The acceleration is far, far superior in Propel for the same 10KW engine and top speed c/ Propel is just over half the price.

We know that Saietta have the know how to convert energy more efficiently and to produce its motors at a competitive cost which I think explains its simultaneous superior performance and lower price.

To summarise, it's a very solid review and endorsement of the technology. I'll post the transcript separately.

GLA

Guitar, here are some links you may find useful.

1. Hardman analyst speaks about their latest research note:
https://vimeo.com/793299202

2. (Typical) Moneyweek simplistic article about CLOs:
https://moneyweek.com/investments/funds/604506/collateralised-loan-obligations-a-risky-bet-on-inflation

3. More In Depth View of CLOs:
https://www.guggenheiminvestments.com/perspectives/portfolio-strategy/understanding-collateralized-loan-obligations-clo

4. My own understanding of the difference between VPC and VTA (I hold both) is that the former holds specific debts which are asset-backed, and offers unleveraged fixed rates and as a lender to lenders, whereas a CLO also holds bundles of debts which have been "collateralised" and are leveraged. The debt repayments are called dividends and are often floating rate.

5. The horse's mouth. I found listening to Serge Demay the CIO of Volta to be very useful:
https://www.youtube.com/watch?v=v66RI6J0n3A

6. If you conclude that VTA is a bit too fruity for you (compared to VPC), then one of my other holdings TENT may be worth checking out. The yield is 7.5% I think, based on 2022 dividends. It is hydropower, energy efficiency and CHP (combined heat & power) so has quite defensive characteristics underwritten by PPAs (index linked prices). It trades on a 29% discount to NAV and is strangely out of fashion given current affairs.

GLA

https://www.youtube.com/watch?v=cUDeR40bk9Q

I think a large reason for the ongoing depression and substantial discount here is that Woodford's Equity Income Fund and Patient Capital Fund (I remember there were 3 in total including what is now SUPP) have holdings in common so Link are under pressure to liquidate and return money to the other 2 funds. If you look at Benevolent AI for example this is noted under the "news" articles there.

SUPP, meanwhile, is faced with ongoing selling pressure almost despite how the companies are doing. We know ONT is not doing great but other holdings like Atom Bank, Reaction Engines are actually real gems. I'm happy to hold here because the selling will end during 2023 (the new article talks to mid 2023). To sell out in depressed markets wouldn't be a smart move.

.....When Woodford called it Patient Capital, he wasn't kidding.

Exactly the same problem using Interactive Investor, that you can't buy RGO.

Saietta's UK Patents filed and pending:

https://www.ipo.gov.uk/p-pj/p-pj-ukappfiled?lastResult=10&perPage=10&startYear=2010&startMonth=January&startDay=27th+-+6297&endYear=2023&endMonth=January&endDay=18th+-+6974&filter=Saietta&sort=Publication+Date&status=undefined#starttabs

Haz/unhooked, Both of you are hilarious. Neither of you even knew about Saietta's patents until lunch time today. So in the space of an afternoon you've had a panic, Hazbeen has taken on a Peter Jones persona and is out, and unhooked has become unhinged! Why the panic lads?

Re-read the annual report for it sayeth:
"The Group faces the risk that its outstanding patent applications are not granted. Therefore there is a risk that
the Group will not be able to secure the protection of its intellectual property in the countries where the patent
applications are outstanding, leaving the Group vulnerable to misappropriation of intellectual property by third parties."

"MITIGATION: The Group seeks to reduce this risk by manufacturing its product in such a way that it is an insurmountable task for third parties to reverse engineer its motors. Furthermore, the Group has substantial information and data security protocols to prevent its intellectual property being misappropriated by third parties, physically or
virtually."

It is my assertion that Vic is a self-confessed control freak so will have had this threat uppermost in his mind and has dealt with it.

So take comfort in the words "insurmountable" and "substantial"....... I really don't think threat of patents pending is the reason for the share price drop.... but I can't categorically say it isn't - so it could be.

Much more likely to be people panicing over no good reason than the share is a growth stock and in true animal farm sheep are chorusing "growth stock baaaaaaaaaad" and hitting the sell button while feeling they're the new Peter Jones. Trouble is, just because Jones says he sees "no value" is that factually the case? https://www.express.co.uk/finance/personalfinance/1717955/dragons-den-success-story-bbc-hungryhouse

GLA

Haz, yes, could be.

New case study video on Saietta:
https://www.youtube.com/watch?v=DW2qH8H1nkU
"23m vehicles registered in India, 20m of those are 2 wheeler, vast majority are electric"
"The Axial-Flux Motor has always been too expensive to go mass volume - until now; Axial Flux has been around for years in formula-E. The Axial-Flux provides a level of efficiency which means more range or a smaller battery or both"

Got me thinking and I've reanalysed their company report:

1. Thinking about SED in terms of a moat, the combination of axle, invertor, AFM and software makes it harder to copy. The Sutherland pilot plant and "know how" to scale that to millions is part of that moat too.

2. As at July 2022 118 Patents Granted and 90 Patents Pending.

3. Quoting the annual report "Saietta’s patent-pending AFT motor has a potentially disruptive design, intended to unlock the technical and economic impediments to the mass market electrification of the global motorbike and lightweight vehicle market. After several years of research and development, Saietta’s axial flux AFT motors are targeted at solving the efficiency paradox of EV motors – in that high efficiency motors are expensive but less expensive lower efficiency motors require more batteries (which increases a vehicle’s expense) to deliver an equivalent range."

I hadn't picked up on those (crucial comments) before.
Watch that video, think about moats, and tell me 46p a share is the right price! Bonkers? Or "Pension Fund!" as Vic himself puts it at the end of the above video.

GLA