RE: MOD Defence Procurement : Type 31 Frigate2 Dec 2023 13:07
I was wondering, re: revenue an it's accounting treatment. They've stated revenue to be in the range of 80m to 100m due to how revenue is accounted for by auditors. Taking the lower range of 80m, this is still an increase of around 170% compared to last year. Equally if treatment of revenue is revised, I'm guessing the cost of servicing that revenue would be revised too??
In terms of share price. The share price was around these levels with revenue of around 30m, and IM JR yet to be heard. Since then as stated above, revenue expected to increase by atleast 170%, IM had been won (appealled we know, delay tactics by nogascavern campaigners which likely to be thrown out very quickly imho) but in addition to this, secured around 145m of revenue for next year. The company has managed to get through tough times when borrowing cost hit its peak. Just look at mortgage rates which were at 6% and now around 4% and 10 year bond yields are almost nearing 4%. Is it fair to say, had JW signed the finance deal earlier, the company would be tied into paying higher interest rates for longer affecting profitability. So to have delayed the finance deal plus still have funds to make an attempt to make acquisition via cash payment, liquidity isn't an issue it sounds. Jw stated, once finance deal is signed it wouldav been worth waiting for.
If your a lender, and u see upward trends in borrowing cost, ud push or wait to get higher rate of return on capital. Now that borrowing cost are dropping. Lender would rush to get the finance signed whilst rates are high similar to people buying bonds etc. Europe inflation is 2.4%, so clearly the world is at a pivotal point maybe. Lower cost of capital should help aim market the most imho Americas small caps have started rising I see too. I feel tables have turned, jw reluctant to sign a finance deal when rates were rising, and lenders mustav been eager to get it signed. Now I'm guessing lenders wants to get it done nd jw waiting around to get the best deal imho.
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