Member Info for Agricore

Last reported NAV is 65p so NAV is just over $100m. So Fook Lam Moon is worth $26.5m (ignoring the lost income which isn't part of that 65p NAV). So we are potentially (worst case scenario) looking at a 16p per share loss. So reduces to 49p NAV for a share buyable at 8p. So remains at a 83% discount to NAV! The OCF is a bit eyewatering but for someone looking for compelling value and a recovery play in a fast growing area (SE Asia and China) then this is very interesting. The spread is a painful 33% so I've put a limit buy and let's see if one of the MMs accept my above mid point offer.

17th December RNS said:
The Company holds a Convertible Bond of US$26.5 million in Fook Lam Moon Holdings. The Convertible Bond has a maturity of 5 years ending November 2023 and pays a coupon of 5.0% per annum (3.0% paid in cash with the remainder rolled up with the principal amount outstanding).

· As of 30 June 2021, the carrying value of the Convertible Bond was US$29.1 million taking into account the current face value of the instrument, accrued PIK interest and cash interest receivable, less an Expected Credit Loss ("ECL") provision of US$0.7 million against aged cash interest receivables accounting for approximately 27% of the Company's Net Asset Value as at 30 June 2021.

· The Company has recently become aware that the underlying group structure of FLM may have changed such that FLM is no longer the 71% owned controlling shareholder in the Hong Kong based restaurant group ('the Restaurant Group').

· The Company and its Investment Manager are actively working to secure more information to clearly understand what potential impact this ownership change may have on the value attributed to the Convertible Bond and the level of any new ownership in the Restaurant Group .

· In order to be prudent, at this point in time, the Company believes it likely that a provision may be taken against the Convertible Bond ranging from a partial to a full provision in its 2021 year end accounts.

· The Company will also explore all legal options available to it under the Convertible Bond documentation if its rights to knowledge of and possible consents to a disposal of a controlling stake in the Restaurant Group have been breached and will consider all courses of action to protect its interest as more information comes to light.

· The Company will provide relevant updates upon further information becoming available.

Hi TopCatz I had exactly the same thought and was going to post the same - and then read your post! Possibly Belluscura too? Other ideas I had for his 2022 list were TRR, FIPP, RSE, TND, TFG, FWD, EUA, ENER. I don't think they can recycle old ideas but if they could CIP and JLP would be up there too.
The NAV here is estimated to be 37.5p (analyst view) and we know there's "hidden value" here which isn't baked into that number either.
Happy Christmas and GLA

You may have noticed this share on a "top performers" list for Investment Trusts for 2021. So does this have more stored energy in its battery for progress in 2022?

I am a PI who invested into this mid year so haven't benefited from the bounce earlier in 2021, but I have faith in this going forwards and these are my thoughts and thinking.

1. The discount to NAV remains quite big (circa 43% to NAV) albeit less than 12 months ago as the discount has closed (from over 60% - it was a 2021 top performer after all). The reason for this continued discount seems to be a lack of volume/interest.
2. RSE are actively buying back shares at a rate of about £0.5m/day during open periods to close that discount to NAV.
3. Around 80% of the portfolio is oil/gas investments, in the US. Some of these have been heavily written off and others are subject to partial hedged pricing so there's some cleaning up that needs to happen... and is happening from what I can see.
4. RSE use an ROI measure for each of their investments. Many of their oil are less than 1. But are increasing under the current high price environment. Given the current $70-$75 prices that some further upgrades are achievable short term.
5. Around 20% of the portfolio is in "exciting" ESG investments into energy efficiency, EV technology and renewables. These have achieved significant uplifts maybe 400% return on average and the proportion of ESG-friendlies is increasing month-by-month. Typically these sort of investments and ROI would be on a premium to NAV yet are on a 40%+ discount - tarred with the same brush. Also I'd say the investment managers appear to have a talent to get involved in value adding renewables projects and achieve upgrade multiples in their picks.
6. Of particular note is RSE's involvement in Solid Power's float. This has been brought to market via a SPAC. It's very (very) hard to ascertain RSE's holding, and potential but I believe it is (as a minimum) 1.66m shares @ $10/share (current price 22/12/2021) = £12m - in an exciting Solid State battery business also backed by BMW and Ford.
Look at this presentation:
https://ir.solidpowerbattery.com/static-files/11d0e8d6-2fd0-43a2-9169-f02d0bebe801

Overall this IT has "treaded water" for 6 months, but I believe it has potential. A growing ESG portfolio is undervalued and underappreciated. There certainly seems to be a talent behind RSE to pick good opportunities in new energy..... and have inherited some "stinkers" in old energy but they are working to make use of that legacy to move the 20% of the portfolio progressively higher towards making this more of an 100% ESG stock. Once it gets recognised as such then that should help it rate upwards.... most of its ESG peers are valued on a premium to NAV - and not a discount.

https://*********************/newsfeed/article/arix-bioscience-plc-arix-bioscience-co-leads-31-million-series-a-financing-for-new-portfolio-company-sorriso-pharmaceuticals-1330950

£9.8m invested for 26% stake.
Phase 1 Trial ongoing - targeting Inflammatory Bowel Disease

The 10% of EVs sold in 2021 is only pure EVs.... once you factor in hybrids (which include plug in PHEVs) the number is much higher (35%ish?). There is a substantial roll out of charging infrastructure planned and the charging chicken will drive the EV egg in my opinion 2022-2025 - driving EV sales higher than the current rate of 10%. I expect the chancellor will introduce heavier taxes of ICE in 2022 or 2023 too (although city taxes and ICE restrictions e.g. EURO6 are happening too).

I see things being quite positive for SLP (bringing the conversation back to this being SLP's board) in that we will see demand worldwide for ICE to rebound in 2022 and disruptions ease. Longer term there'll be declines in palladium and rhodium pricing but other PGMs will increase in price - so the basket size will remain profitable for years to come.

This report (commissioned by SLP) is quite enlightening:
https://www.edisongroup.com/investment-themes/the-pgm-markets-outlook-and-price-forecasts-2/

Looking at how ST valued TSL he based it what Canaccord Genuity said: and that was on Afterpay being $133 a share (as at August). 4 months on Afterpay is at $87 a share. So it's dropped a third - like Block - and like TSL.

I've run the same calculation that he relied on back in August and it comes back with a valuation of £88.5m. That's quite close to our MCap prior to the announcement ...... So those who think they've been "ripped off" and hard done by, sorry actually the proposed deal is fair based on the current prices of Afterpay and Block. The offer is pretty close (within 3%) of TSL's Mcap prior to the announcement. That's the facts.

If you don't want to own Block then sell ThinkSmart - it's as simple as that!!

But if you want to buy Block at a 25% discount to it's current market price, and believe the synergy of Afterpay/clearpay/Crypto/POS systems/Payment Gateways is exciting then buy TSL today!!! (I've topped up :) )

Sakes all round!
Hai hai hai!

This has gone from "it's 40-60% mud"

To SP Angel who called it "Our take: Another disappointing outcome for TXP" and 40-60% water.

Now an interview it's 40-60% water and that's normal!

It's like an episode of Eastenders! No end to the twists and turns and drama. Bom, bom, do, do, do do......

Alfacomp, vee have vays of making you speak

Have you actually got any sensible metrics around their electrolyte business? Last communication was they made a loss of £1.1m in the last annual accounts and are in the process of building a facility that has an unknown cost to make a electrolyte in an unknown quantity for an unknown price because there's colossal future demand. I tried to make sense of all the numbers (input cost/capital cost/revenue plan/sell price of vanadium eletrolyte vs LiOn) and contacted BMN's investor relations twice but they didn't even have the courtesy to reply.

I worry as an investor here that they've got on the bandwagon without any proper plan.

In fact the last I heard, it was posted in this forum, they were looking to recruit a consultant to write a plan and that was 6 months ago. And that was at least a year after they'd spent at least a million on..... something to do with VRFB.

So can you enlighten us at all as to the plan, and how BMN can deliver something positive for us long suffering shareholders?

Hi Surprised,
I'm repeating my post from yesterday. TSL has 106.59m shares in issue. The RNS was to convert to 618750 Block shares. That's 0.0058 Block shares per TSL share.
At current prices that's worth 0.0058 * $158.30 = 91.8c which equates at a $/£ conversion of 1.33 to £0.69pence.
Plus £6.5m cash (6500000/106590000) which is 6.1p a share. So that makes £0.75.... so not sure how you're calculating 80+p a share?

But I agree there's a value gap plus I posted yesterday some analyst commentary which was positive about Block/Square - which makes one think that $158 could be a low point for those shares.

If you believe that Block has a bright future and will return to its recent $260 levels (or beyond) then by my calculations a TSL share will in the future be worth 99p so is a buy based on intrinsic value - and ignoring the negative sentiment towards ST

Thanks oil (all) for clarifying. I found this which was helpful:

https://www.mckinseyenergyinsights.com/resources/refinery-reference-desk/distillation-cuts/#:~:text=Distillation%20cuts%20are%20the%20output,(e.g.%2C%20cut%20points).

And thank you Paul Bay! He methodically worked to the strategy which has now delivered for us! A very happy Christmas to investors.

Does anyone know the significance of the 40-60% oil cuts? Is that a negative - like the previous 90% water announcement was?

Hold your breath everyone!
SYM's new gloves kills covid in 10 minutes..... oh wait Covid is airborne and rarely spread by touch.

Just keep holding your breath everyone - so we make these new gloves useful!

Hi Kaiser, how can topping up such a small amount be economical with trading costs?! But I've topped up too at sub 15p and, like you, I couldn't believe the price.

I don't see they'll go anywhere near Chile or DRC due to the political risks.... the recent troubles in SA will make JLP cautious imo. Besides there's plenty of opportunity in "safe" jurisdictions such as Europe, Oz, and North America. I think the Chile have elected a loony lefty today and Peru's troubles rumble on too. NB I can see this being bullish for copper (and other metals) as the threat of taxes and disruptions/riots in South America impacts the supply into a market with an existing supply deficit.

I don't think Leon will sell out to a major - I think he'll want to grow the business as a matter of personal pride. That's my read of the man anyhow.

GLA

>> Until that becomes clear this will trade at a discount like most other investment holding companies. As this is fairly illiquid the discount could be large.

I don't agree Battersea. If the vote goes in favour, it will hold cash and a publicly traded NASDAQ share. It has a clear path to winding up. What's at all illiquid about any of that!!

My next thought is why did Block drop from $260 per share to $167?

Quarterly update November 2021: Square reported sales of $3.84 billion for the period ended 9/30/21 which is a 26.73% increase YOY. Underperformed analyst consensus was $4.39 billion

Baptista think their forecast revenue 2021 > 2022 > 2023 expected to grow 10% YOY and PBT $213m (2021) to $350m (2022) and $382 (2023). NICE!

Block are heavily involved with Bitcoin and BNPL is actually only part of their strategy; there are various other FinTech apps they are launching in 2022 and 2023 too.

Sounds a pretty positive story to be fair.

One other thought: I'm assuming TSL gets wound up and the cash returned to shareholders (It's not clear from the RNS whether that's their intention). Assuming we are talking about £6m of cash then that equates to 6m/106.59 = 5.6p per share. If nothing else then that means today's price of 72p is an interesting arbitrage to earn about 8% for holding TSL for a couple of months. If it's £7m then that rises to 6.5p

So TSL has 106.59m shares in issue. We stand to convert to 618750 Block shares. That's 0.0058 Block shares per TSL share.

At current prices that's worth 0.0058 * $167.06 = 96.9c which equates at 1.33 to £0.729 pence.

If you believe that Block has a bright future and will return to its recent $260 levels then by my calculations a TSL share will in the future be worth 99p.

Given that many will have a buy price well above that (and nearly all above 73p) then it's a poor outcome for us shareholders imo.

I also think this is one of the times that "skin in the game" is a negative since it will need 85% of remaining shareholders to vote against the deal for it to not go ahead. (BOD hold 41% of shares)

GLA and (not many) happy returns from the BOD

Hi TheAcc, you're absolutely right I've used accumulated amortisation from 30/06/21 not "for the period" - apologies!

So the picture is rosier - and I agree the revenue growth is what will drive this to PBT profitability (not just EBITDA profitable). My concern was/is that based on my (incorrect) numbers they were far away from achieving that!! Now I'm looking at a more realistic level I am rather relieved as I bought this based on ST recommendation and without doing my own due diligence!

I got the growth in administration costs from Cenkos whose numbers are FY2021 £2.6m cost and FY2022 £3.8m cost. This growth, in turn, I realised relates to the new "Mobile Advertising" service line announced June 2021. This £1.2m are the additional human being costs of operating this new service line and which are a fixed cost - so appear to fall under "Administrative" rather than S&M costs..... Odd, but at least I feel I understand the numbers now. The other point that I had failed to appreciate was that the mViva mobile advertising is a new service line.... going further back I realised that they are adding this in 2021 with a single Indian subsidiary of a European Telco (e.g. Vodafone?) to prove concept and that the revenues will follow and ramp in 2022 and beyond.

Looking at the update 27/09 they believe that the FY2021 revenues are already on target ($7.2m) and anticipating $9m revenue in FY2022. Of that about $2.5m is recurring revenue; so the remainder is$6.5m for 2022 and they have a pipeline of $18m of opportunities as at end September 21.... including expansion to non-telecom customers - ad agencies, banks and so on.

I can now see how that the "worsening" PBT for 2022 of -$1.1m is an investment.... and it could be zero in FY2022 if their revenue surprises by around 11% to the upside.... And worst case with further growth FY2023 should be PBT profitable. Once it's on a track to PBT profitable, low ARR multiples make this an exciting buy, in my opinion.

NB My numbers came from Cenkos and I got those from research-tree dot com. (sorry I can't share a direct link as they don't allow)

I've been trying to get my head around the fact that EBIT is estimated negative for 2021 and the (Cenkos) 2022 outlook is for another year of (worse) negative EBIT. ST doesn't explore this in his articles, and I can't see anything discussed here either.

From what I can see there's a £18m mix of past development costs and a nebulous "customer relationship" intangible and £400k of "normal" goodwill under the intangibles. There's additions in H1 2021 of £1.4m and amortisation of around £6m per year. This is where the negative is coming from..... and if these numbers are typical (and flat rate) then there's around 4 years of amortisation to bring that to zero. (If that's the amortisation policy?)

What's worse is that even though there's an estimated 20% revenue increase for 2022 but higher estimated administration costs (up 50%?) and higher amortisation means the EBIT is worse next year!!

I get that they are capitalising development (and presumably S&M costs?) rather than treating it as COS and we are now effectively "paying" for flattered P&Ls from earlier years. And I get that that is typical for this sort of business. I just find it surprising that no one is discussing this point and instead (re-)quoting ST valuations based on "typical EV or ARR multiples" and cash profit rather than actual bottom line net profit.

Does anyone know how they determine amortisation? It seems to me how this is forecast to change over time is a crucial point.