Member Info for Al180

SCE is another company I hold that has striking similarities to HDD in that they are a British engineering company entering a safety critical market with a superior product, a recent surge in demand saw the SP at 70p+ but scale up has been problematical with them requiring additional fundraising on top of money already raised that was supposed to see them through to self funding, this has resulted in the SP falling to a 5 year low of 9.5p. If Hardide were to see a dramatic increase in demand then I would tend to agree with Dibs that a buyout may be the best option. In this situation the barriers to entry would be very relevant.

I'm hoping for more positive progress in the aerospace sector, the adoption process has taken many years but we are now a proven product in a safety critical market. I wouldn't expect the value of this to be reflected in the market cap with the current situation but the more successful Hardide are in this sector the move valuable the barriers to entry become.

I remember previous Polarean presentations saying how using their technology could reduce the research costs for drug companies, I can't remember the figures but it was a fraction of the cost of MRI. I'm only guessing but the drug companies should be able move quicker than Hospitals especially if the cost savings are as good as Polarean claim.

Would an OEM really lend? .......... I think OEM10 is a possibility as they seem closer to the company than most standard business relationships. They were involved in solving the furnace issues and wanted ST to build their second production facility close to them in the USA. They now have £200 M in contracted orders with ST so the sooner the company is financially stable and able to focus on capacity expansion the better for everyone.

The thing is James a contracted and prospective order book totalling £710 million with a 60% gross margin points to a company that will be multiples of its current valuation in the near future. A takeover now would be like selling fifty pound notes for a fiver.

Increase holding by 532000.

That has to be a positive sign, when I saw a holding RNS i was expecting someone had sold, nice to be surprised on the upside for a change.

The company have said there are always production problems but they are normally resolved quickly, the reason it has been such an issue is the new energy efficient furnaces fitted to bring capacity up to £20M were breaking down due to the linings failing after a couple of weeks when they were designed to last at least six months. This problem came to light at the end of last year when supply chain issues were much more prevalent so finding a solution and companies to provide the materials was problematical. This was solved in house with help from the OEMs who were informed of the production problems when they occurred.

It took about 4 months to find a solution but the linings at the time of the AGM were still functioning and may well outlast the expectations of the originals. The furnace problems happened at a time when ST had no spare capacity so with new equipment bringing capacity up to £50M progressively this year i'm hopeful and reasonably confident of things going well at the moment.

Many of the buys have been going through below mid price but there are some obvious sells at or fractionally above bid price. The unusual thing is since Tuesday there has only been one market maker on the bid (ZEUZ). They went on the bid at 30p when there had only been one trade of 10,000 share above 30p all day. Since then they have taken on a lot of stock without moving to the offer in fact they moved their price up to 31p about an hour before the close so they still have the best bid price after (SING) moved their bid price to 30p this afternoon.

SCE have 8 market makers and you would normal see them changing from one side of the order book to the other on relatively small volume, it looks likely that (ZEUZ) are taking on stock for someone

With cash forecast to run out next year there is a fundraising on the horizon, this always seems to suppress share prices especially in times of bad market sentiment.

POLX have said that an equity raise or strategic partnerships are the options for funding commercialisation , If they manage to pull off a deal that prevents a rights issue that would surely do wonders for the SP

I don't think your missing anything ironknut there has been about a 50% rise in the SP from recent lows so your always going to get a bit of selling along the way. I read the results again last night and it makes interesting reading with the hindsight of the Philips collaboration news, this is what they said about corporate partnering in the results.....

"We continue to believe that corporate partnering could be an important part of the Company's business plan. We see the opportunity to help the pharmaceutical industry reduce by significant amounts the size, time required to conduct and costs of their pulmonary drug clinical trials by providing quantitative, reproducible image-based data. We also see the opportunity to partner with MRI manufacturers to open up the MRI applications space to include pulmonary diagnostics, driving the demand for more MRI systems. In addition, we will explore the opportunity to partner with pulmonary disease organizations and foundations to incorporate the use of Xenoview in the diagnosis and treatment of disease."

They could already be working with other manufactures, Philips had to go public as they were presenting the machine at ISMRM .

Going on previous events it should be available towards the end of next week.
I'm more confident they've solved the furnace issues after the presentation, good honest delivery from the BOD

It looks like the OEMs have been less concerned with the expansion hiccups than investors with the prospective pipeline increasing.

They have said that several weeks of uninterrupted production was needed to confirm the furnaces problems have been resolved so I think they would be reluctant to say anything before April. I have been invested in SCE for a long time, I've never found them to be a leaky company, the news flow previously was all about progress with OEMs, recently as shown by the £100m OEM 10 contact announcement with all the potential future carry over models the SP took a two week break then continued to slide due to production issues. In this transitional phase progress in the expansion program has become the main consideration.
Has the SP performance been due to leaks of a continued breakdown?, This is obviously possible as the entire workforce, the furnace manufactures, and various suppliers would be aware of this.
Is it because AIM growth stocks have become increasingly out of favour especially if the news flow has not been totally positive?
Is it because any downward SP movement is seen as proof that there must be a problem causing more selling ?

My gut feeling is the April update will not be everything we could hope for but good enough to change the SP direction.

I know how that feels Guitarsolo, hopefully it will prove to be a profitable trade after we get an update in April, last year it was on April 4th so shouldn't be to long now.

Looking at the one year chart and correlating it with recent RNS announcements, there is share price movement prior to the fundraising RNS on 28/9/22., but share price movements before fundraising announcements are the norm. There was a small drop before the OEM 10 contact award and the initial news about furnace problems ( 24/11/22 )which could of been due to this being know to investors but the SP spiked on the OEM part of the news for a couple of weeks. There was a small movement before the Jan 11th update when the furnace problems took longer to resolve than hoped, the entire workforce would of been aware of this so another almost impossible situation for the company if this was the reason.

The Furnace RNS was due to it happening when there was no spare capacity so it impacted FY2022 figures, hopefully with the continuing ramp up to £50M capacity and Surface Transforms prioritising furnace instalment this part of the process will have more resilience now if the teething problems have not been totally resolved.

I can't imagine a more capable team to bring this to market than the BOD of Polarean .
hTtps://www.polarean-ir.com/content/investors/board

I posted this on another forum, after reading Monkshood post it fits in with the topic here so have copied and pasted.........

If we can get to £50m capacity by Q2 this year then a bit of downtime on a furnace will not be an issue, this was stated in the last trading and operations update........

"The Company repeats the statement made on 24 November that it expects the planned Phase 2 doubling in capacity to £50m sales p.a. to be operational in Q2 2023. The increase in capacity is progressive and we expect some critical bottlenecks to be relieved earlier than this."

They also talked about accelerating the supply of furnaces and appointing a Chief Operations manager earlier in the RNS. If the April update can report good progress on the £50m capacity with a certain amount of new capacity already in place then the market might start to notice the size of our order book and the likelihood of repeat business.

pjmcgra recently posted a link to a Polarean presentation, it's over a year old but still very interesting and mostly relevant.
hTtps://www.youtube.com/watch?app=desktop&v=Db0IdVAbLYM&t=41s
There were a couple of bits that particularly interested me at 43 mins where they cover a trail done for pre surgery on Lung Transplants and lobe resection patients, and then talk about being into full commercialisation research with coding coverage and payments side of the industry at 45 mins
It's encouraging that the health insurance side of the market was being addressed more than a year ago, but how relevant is it to the top 1% of hospitals Polarean are initially targeting? the presentation shows how our technology can effect decisions on how to perform lung transplants, are hospitals that perform these procedures really going to wait for the insurance companies to put us on the approved list.